Do you love to crack open the spine of a new journal? There are various ways to get into this hobby—dream journaling, gratitude journaling, book journaling ... But have you heard of money journaling?
Well, it can help you give your finances and your mindset a mega boost. And in this article, we will go over how exactly money journaling can work for you!
What is money journaling?
Money journaling is about more than just keeping a ledger. It's about keeping a journal that's purely dedicated to your finances and spending habits. When you start journaling, you commit to writing down everything you spend every day.
It's more than just math
To make it a money journal, you also need to write down how you feel about all your spending in addition to the numbers. This is the secret ingredient.
This way, a financial journal isn't about just tracking spending. Rather, it's also about putting you in touch with what you think and feel—not just about your spending—but about money in general.
Why should you start the practice of money journaling?
Starting a money journal will help you better understand your relationship with money. This is helpful no matter where you are in your financial journey.
For example, you might have a monthly budget but are you sticking to it? You may be surprised by what your journal reveals about your real-life spending habits.
Find out how you feel about your spending
Moreover, a journal helps you identify how you feel about spending your money.
For example, maybe you cut your daily latte out of your budget because you think you shouldn't be spending so much money on coffee.
But once you start money journaling, you realize that you actually get a major mood boost from ordering your soy milk matcha latte. And isn't a good mood something worth budgeting for?
Ultimately, the notes in your journal can help you decide what you truly want to prioritize in your budget.
Get the best of both worlds: numbers and emotions
It gives you a look at the cold, hard numbers of what you're spending every day—the kind of facts and sequencing that your left brain loves.
However, a journal also pushes you to reflect on what those numbers really mean to you and your feelings—a much-appreciated activity for the right brain.
This is what makes it a truly holistic tool to help you get in touch with and recalibrate (if needed) your finances.
Become more self-aware through reflection
It's all about being self-aware. According to a study from the European Journal of Personality, if you have a greater sense of self-awareness, you are more likely to identify goal-related obstacles.
This is what makes a financial journal so much more than just an expense tracker.
By taking the time to write reflections next to every purchase you make, you're becoming more aware of how you feel about your money and spending habits.
Ultimately, this helps you identify obstacles that are stopping you from reaching your financial goals. And once you identify those obstacles, you can take steps to make changes.
For example, maybe you realize that you spend more money on take-out than you'd like to—and you immediately feel guilty after ordering. Or, maybe you realize that you hit ADD TO CART as soon as you feel stressed out. Both of these actions may be hurting your goal to save more.
But with money journaling, you can better identify these and other goal-crushing obstacles so you can implement new actions to take moving forward.
Improve your mindset
It might sound like a fad and serious Instagram nonsense, but adjusting your mindset can really have a profound impact on your life.
In fact, a new piece from the Stanford Report shares research: "By understanding, adapting, and shifting your mindset, you can improve your health, decrease your stress and become more resilient to life's challenges."
And this all goes for your finances, too. A healthy mindset is key!
Figure out what you truly believe about your finances
You may have discovered that you have some limiting beliefs about money. It's okay—we all do. But unfortunately, these limiting beliefs can really hold you back from achieving your goals.
For example, you may never start investing or learning how to save because deep down you think you don't deserve financial wellness.
This is where money journaling can be the magic trick to help you overcome your limiting beliefs because it forces you to take a look at your relationship with money.
We all have things that scare us or make us nervous when it comes to finances. But by staring them hard in the face, you can learn how to shift your mindset and overcome these fears.
How to get started money journaling
If you're not already an active journaler (or even if you are), starting a financial journal can seem overwhelming and time-consuming.
If you consider all the tiny purchases you make throughout the day, (e.g., coffee, in-app purchases, last-minute Target purchases, etc.), it might seem like too much.
And that's the point! You want to be tuned in to all of this. But keeping track of all these purchases doesn't have to be arduous.
These are the simple five steps to get started with money journaling:
1. Get a journal
Your journal can be a regular notebook, a special money planning book, or something digital. What's most important is that it is something you can easily access, hassle-free every day.
2. Round up all your receipts from the last week
You can skip over this step if you want. But if you've got the motivation pumping and you want to start reflecting on your money habits right away, having a little background is helpful. You can use your stockpile of receipts from last week to get started journaling.
If you don't hold on to paper receipts, then open up the statements for all your credit and debit cards so you can see what you spent in the last week.
3. Record all your purchases
In your chosen journal, start writing down all your daily purchases. If you completed step two, you can create a backlog with all your purchases from last week. If not, just get started tracking your spending today.
Next, this is the really crucial part. Beside each purchase that you record, write down how you feel/felt when making that purchase.
Remember that there isn't a right or wrong here. You can write down as little or as much as you'd like. Above all, don't skip out on this part!
While it might feel a little lame to write down how you felt buying groceries, know that this is what will help you get better in touch with your spending and what will ultimately help you improve your overall financial situation. Trust the process.
4. Total it all up and review
At the end of the day, total up all your purchases. Then, next to that total, write down how you feel about all the spending that you did.
Do you feel guilty? Proud? Uplifted?
Some days you may spend a whole lot more than you planned—but that's not necessarily a bad thing! Maybe you had a spontaneous night out with your girlfriends singing karaoke. Sure, you might have spent a bit more on drinks than you would have wanted, but was it worth it to you?
The longer you keep your journal, you can also add in more reflection checkpoints.
For example, total up your spending at the end of the week and write down how you feel about it. Do it again at the end of the month, and take note of how your thoughts change.
5. Make a plan for moving forward
When the week is over, take the time to look at your notes. And be thorough: review both your spending and your journal entries.
Try to give yourself a little space between reflections, too. Maybe cozy up on a Sunday evening and review your entries from the last week.
Leaving a little time for your thoughts and feelings to marinate gives you the chance to reflect more clearly and see things in a new light. Then you can plan for your financial future.
Examples of money journal prompts to try out!
Your notebook can be more than a place to monitor your feelings on daily purchases. Additionally, you can use it to reflect on your overall financial situation and on your relationship with money in general.
Here are some money journal prompt ideas to get you started.
12 Money journal prompts to inspire you
Get started with one of these money journal prompts to inspire you:
- What makes me feel guilty when it comes to money?
- What is my Achilles' heel when it comes to spending?
- When I think about money, I think about ...
- Have my thoughts about money improved or not this year?
- I am not good at ____ when it comes to money management. I can change this by ...
- What did money mean to me growing up?
- I believe the purpose of money is to ...
- How do I feel about money today? How do I want to feel about money in the future?
- Do I feel comfortable talking about money with friends and family? If so, what do we talk about?
- Do I want to have a lot of money? What is "a lot of money" to me? And if so, why?
- My biggest financial fear is ...
- I don't like ____ about my finances. I can take one step to start changing this today by ...
4 Weekly check-in money journal prompts
Below are 4 weekly money journal prompts you can leverage as well:
- Did I spend more than I wanted to? On what?
- What are my triggers for spending?
- Did I make progress on my spending goals?
- What can I do differently next week?
To be successful with your journaling, you need to make it a priority. So block time for yourself to write in your journal weekly, monthly, and whenever you feel like it!
Leverage these money journaling tips for success with your finances and for a more positive mindset!
Like other activities that make you track your progress every day, once you start money journaling, it can become addictive.
So treat yourself to a pretty journal you love. Buy a fabulous pen. And get started with your journal ASAP. The way you think about money is crucial to your financial success.
For more thoughts on how to improve your relationship with your finances, check out these key ways to improve your money mindset.