How Much Did I Spend, Again?
It happens the same time every year. January turns into February and particular mailings flood my mailbox. They’re an important receipt of a year’s work. That’s right, I’m talking about those wonderful W2 forms sent by employers. Their arrival triggers several emotions. First, the shock of seeing in print the “value” of my vocational efforts. Then, the anxiety of translating those forms into an income tax return. This is often accompanied by a feeling of joy, “thank you for the refund,” or of sorrow, “here’s a few more dollars.” I’ve found that the “required educational expenses” section always seems to trip me up. Come tax time, scholarship money becomes personal income when the total received exceeds required educational expenses. With this knowledge, tracking expenses seems like more than just a good idea.
Tracking expenses is a very important financial discipline for many reasons. For example, tracking expenses enables good budgeting. In it’s truest form a budget is an intentional spending plan for the time ahead. A budget creates boundaries for spending that leave an individual with more money saved than is flowing out. Tracking expenses is essential for realistic budgeting. It’s pretty logical: I know best how much I will spend by looking at how much I’ve spent. It provides a shot of realism into the lofty goals of a budget. Beyond remaining in the confines of a budget, tracking expenditures allows an individual to better categorize cash outflows. Budgets are of little use if expenses aren’t monitored after the initial plan is developed. One cannot simply create a plan and assume that the money magically knows where it’s going. Rather, tracking expenses is an important, continual discipline. It is about more than piece of mind.
Also, tracking expenditures helps when it comes time to file taxes. Doing so creates a realistic snapshot of personal income. Instead of forgetting old receipts in a folder or lining costs aimlessly in a spreadsheet, categorizing and analyzing expenses regularly helps an individual keep track of outflows. That way you aren’t scrambling to find the receipt that was “just right there” or psychoanalyzing a tiny transaction description on a bank statement in April. Additionally, there are a variety of expenditures that can be beneficial at tax time. Knowing why money was spent or how it was spent allows an individual to reap those benefits.
In the rush of a semester, it’s difficult to devote time to monitoring spending. It can be tedious at times, much like reading ancient tomes. And, just like honoring time in class, dedicating time to tracking expenses makes the final – the tax return – friendlier. Come April, when assignments are due and the final academic push begins, the last thing you want to be doing is frantically searching past orders on Amazon hoping to keep just a few more pennies where they belong. Moreover, tracking expenses can save you from the painful question: how much did I spend, again?
Daniel Potter is originally from Chapel Hill, NC and is a third year M. Div student at the Wake Forest School of Divinity. He is a current CBF Leadership Scholar and a past recipient of the Daniel and Earlene Vestal Scholarship. Daniel was ordained in March of 2015 at Mount Carmel Baptist Church of Chapel Hill, NC and currently works as the Interim Youth Minister at Knollwood Baptist Church of Winston-Salem, NC. He is passionate about youth ministry and hopes to find new ways to empower youth to be the current and future leaders of the Church. He enjoys connecting with others, good music, and spending time with his wife, Rachel.