If you look closely at your wallet, you might learn some valuable truths.
We’re taught from an early age that one key to success is goal setting, and rarely do people make a snap decision to abandon a goal. Instead, slowly but surely, people choose a one-off exception, and vow not to let it happen again. These little white lies help ease our guilt, but they also undermine our goals until they are left unfulfilled.
However, your wallet can’t lie. We can justify questionable decisions, cloud our own judgement, and excuse behaviour that runs counter to our beliefs & goals, our wallets may hold the key to keeping us on track. Wallets may be the magical truth serum of the personal finance world.
Listening to your wallet begins with keeping an honest, written record of every dime you spend. Many studies have shown that writing down goals and tracking progress increases the likelihood of achieving those goals. And while writing down every purchase isn’t anyone’s idea of a great time – here’s the thing – it works.
If tracking your daily activities in order to hold yourself accountable sounds familiar, it’s likely because the concept has been advocated by nutritional professionals for years. It turns out that when people are brought face-to-face with their caloric reality – every bite – they are more likely to maintain the focus on their fitness goals. Additionally, this accountability helps form positive dietary habits. Eventually, the need to write down every item of food eaten gradually recedes.
Listening to your wallet by tracking every purchase gives real visibility into your budget and generally can bring you closer to meeting your financial goals. Even if they seemed unattainable at first. Comparing real spending to a goal-oriented budget can be just the motivational boost needed, in order to evolve from a goal-setter to a goal-achiever.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.