Known unknowns

In 2009, Donald Rumsfeld famously thrust a long-standing NSI phrase into the public light when he talked about known knowns, unknown knowns, and unknown unknowns.

In simple terms, this refers what we know, what we do not know, and what we cannot know.

When it comes to our financial energy, one of the first steps is gathering information. For some of you, these questions will seem basic and you might already know the answers. If so, great. For others, they may create anxiety. Whatever the case, getting a clear picture on the flow of money in and out is critical.

How much money do you earn a week/month/year?

How much of this do you spend?

What do you spend it on?

In terms of the categories of knowledge, clearly these answers are knowable. Given how accessible this information is, and how few people get to a good understanding of this, we might need to make a new category – the unknown knowns – what we do not like to know.

Given how simple tracking our spending is, it’s amazing how many roadblocks get in the way. Its like we know that if we take a look at this, we are looking at more than just our spending patterns.

How to track your spending

The simplest most effective way of tracking your spending is this:

  1. Find a notebook – something small that you can fit in your pocket. You don’t have to go buy a fancy moleskin – a simple one from the dollar store will do
  2. Write today’s date at the top
  3. For the next two months, every time you spend any money – online, cash or card, you write it down.

That’s it. (For those of you who are really paying attention, you might point out that this is more useful down the track if we categorize the spending – I agree, but for now starting the habit and overcoming any resistance is key.)

So why’s it so hard?

Part of what happens when we have to write down ALL our spending is that our awareness starts to shift. We’ve been conditioned from day one to see ourselves as consumers. There’s little consciousness that every time I spend some money, I’m giving some energy away.

Somehow, in manually keeping track and writing out the numbers, a part of our brain is awakened in a way that simply looking at the numbers doesn’t. This is why automated processes don’t work as well. If I skip the step of tracking, and only look at the numbers, I’m consuming them. Its the difference between stalking wild animals in the bush to take the photo, and sitting and watching a Attenburough doco.

Many years ago when I first started tracking my spending, I was single and could afford to eat out whenever I wanted to. As I wrote out how much I was spending on this, I quickly realized that I didn’t value the food choices that I was making given how much it was costing me. In terms of behaviour, this meant that some days I’d choose to bring a lunch to work. I found a natural equilibrium between my value of having the freedom to eat on the run and the amount of money I was willing to spend on it. Before tracking this spending, I believed that my spending was in alignment with my values. After tracking and making an adjustment, I know.

This may feel like a relatively simple matter. And at one level, it is. However, at another, this is consciousness raising. As you track the numbers, something will start shifting for you. At some stage, this will become emotional. If you are in the ‘I don’t really want to know’ camp, this will be even more acute. In your case, you may find yourself putting off starting the tracking. In some ways, you are being served by not knowing.

I’m hoping that people who need this medicine actually do the work. I’m interested in hearing your stories along the way. I’d love to receive comments, emails from you on how you are or are not travelling.

Three Ways to Increase Odds of Success

  1. Be intelligent with the way that you start this new habit . This post provides a good simple framework.
  2. Tell someone else about it – even better, ask a friend to keep you accountable.
  3. Remind yourself of your WHY from the first post. Write it on your wall in front of the loo. This is simply a necessary step in the larger picture.