I didn’t think this needed to be discussed, but it appears that the saying about “he who assumes” is true. For the second time this week, I met with a client to review their budget and found that they didn’t comprehend the term expense. Let me try to put this in very simple terms: if money leaves your hand at any point, no matter how SMALL, it is an expense.

For example, $30 at walmart is an expense and $0.89 at McDonald’s for a coffee is an expense! If you are sitting down at the end of each month wondering why your budget just never comes out right – the fault lies with you. It’s not the budget. It’s not the computer. It is YOU. You have not accounted for an expense.

You see, the fact is that everyone I speak with knows to include the electricity bill, the cell phone, and even the TV. Yet, with coffee at Dunkin’ Donuts every morning, people seem to think is negotiable. So, just so you know, it’s not. $1 dollar a day for five days is $5 dollars per week and $20 per month. If your budget is tight, that $20 may be the difference between bouncing a check and breathing. Then again, if your $1 “negotiable” expense is really the $5 lunch you get twice a week to make it through work — you’re now out $40 a week. I don’t know about you, but in my world my pennies and dollars count — and I count every penny!

So, for those of you that may suffer from this, I suggest a one-month spending journal. For one month of your life, I encourage you to write down every penny, every dollar, and every quarter you spend. That even includes those in the gumball machine! You may be amazed at what those little expenses add up to!

Once you have complete the journal, sit down and categorize each and every penny you spent and create a budget line for them. If if you have a $20 line for coffee stops, that is OK. Just make sure you account for it.

Once you have created a budget line for every item, then you are finally ready to see where you really are. A lot of us like to sit around saying I can save $700 a month no problem. That is great if you actually do that month after month. It is meaningless if it never happens. You might as well say you can save $5,000 a month while you’re at it.

So, maybe you think this is stupid. Why should you waste your time counting your pennies? Simple, you’re not rich. I hate to be the one to tell you this, but you’re not. I don’t care where you live or what your salary is. You are not part of the 1%  — start counting the pennies. It is through counting the pennies that you can begin to have real conversations about retirement, savings, and your future. The pennies will tell you your future and they will change your life.

When I was younger, I use to tease my father about worry about every $5 dollar purchase we made. It was like the world stopped when lunch came in 2 dollars higher than expected. He would worry and stress about every grocery store bill. But, the family vacation? That decision was made at the drop of the hat. And adding on to the house? That was quick and easy.

It wasn’t until I got older that I realized that keeping track of $10,000 was easy. Spending $10,000 was easy to decide. Yet, keeping on track with your future and keeping up with the pennies — that was the pain in the behind. You see, you save your pennies for those vacations and those additions. It’s those daily decisions that make the big ones easier — and possible in the first place!

So, if you want to have a budget that works every month, then you have to write it down honestly every month.

Shorting yourself will never get you to financial freedom.

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