I was going through the contents of the glove box of our family vehicle the other day. There—how quaint! —was a road map. It was very worn, tattered in fact, evidence of the number of family trips we made over the years. I spent a few minutes unfolding it and then tracing out the highways and side roads we followed. Lots of miles! Many good memories. I then tried to fold it back up again and failing miserably tossed it in the recycle.
I am among those delighted with the advances in personal navigation. I think maps are great, though, because they show so much detail of the land and geography. Yes, I know that is nerdy but so I am.
That said I am among the converted when it comes to reliance on GPS. How did we ever get along without it?
I recall my first maps app, and of course there was a learning curve. I recall once setting it to follow the shortest route instead of fastest and wound up with a rather extended drive (albeit beautiful) from Gettysburg, Pennsylvania to Pittsburgh. I recall the beauty of driving through the mountains but we had to wake the kids when we finally arrived at our hotel much later than planned. So it goes.
Yet the law of unintended consequences does not stop because of the essential usefulness of technology. Have you noticed lately that in addition to distractions from driving while texting there seems to be an increase in distractions caused by driving by GPS?
No less than three times this last week drivers ahead of me have gone from the left turn lane, all the way to the right (or vice versa), across several lanes of traffic, basically ignoring oncoming traffic. Sometimes I have noticed drivers who stop in the middle of the street looking about confused and then looking back to their GPS or phone. A friend of mine swears one of their employees drove onto a lake (it was winter and it was frozen) because the dang thing told him to.
I know the feeling. “Greta Google” as I call the voice on “Google Maps” is commanding and I admit to feeling that momentary confusion as ‘she’ gives me a command that does not exactly compute.
But I digress.
All this is leading up to a question as to whether or not you track your spending each month or like most Americans you just sort of wing it without a road map?
I don’t have a recommended roadmap for you, but there are all sorts of tools and apps available to help budget and track your expenses. I know I use one and find it very helpful in keeping track of where our hard-earned money goes.
If you do track your expenses, how do you fare compared to an ‘average’ American family?
The Bureau of Labor Statistics reports this is how an average American’s spending breaks down:
- Average Household Income (pretax): $74,664
- Average Annual Expenditures: $57,311
- Housing: $18,186 32.9%
- Transportation: $ 9,049 15.8%
- Food: $ 7,203 12.6%
- Personal insurance and Pensions: $ 6,831 11.9%
- Healthcare: $ 4,612 8.1%
- Entertainment: $ 2,913 5.1%
- Cash contributions: $ 2,081 3.6%
- Apparel and Service: $ 1,803 3.1%
- All other expenditures: $ 3,933 6.9%
An article posted on CNBC by Kathleen Elkins points out that only 1 in 3 Americans track their spending. She also points out that we spend 61% of our money on the top three categories: housing, transportation and food.
Does keeping track of spending help manage our finances better? According to Elkins, keeping track of, and minimizing, spending, especially in the top three categories, can pay big dividends in the future. She cites one couple who built a $1 million portfolio by age 40 and a 26-year-old who banked $150,000 by age 24. That is real money!
Now, not all of us can do this in quite the same way but having a financial road map can certainly smooth the road a bit and help keep us off the rocky back roads of life.
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