One difficulty with evaluating the monthly expenses is often cash expenses, meaning stuff you pay cash. If you buy stuff with cash in a supermarket you can of course collect all the receipts and keep them at home in a box. At the end of every month you can then add together all the numbers as usual from the paper receipts.
But what about the cases where you buy something and you do not get a paper receipt? Visiting a bar or a festivity in your village or city or whatever you do for fun in your freetime. Well now it gets difficult. Do you really want to always have to write down on a piece of paper “now I have just bought ice-cream for 2 EUR” or something like that? Of course not.
The financial unicorn solution to this issue is simple but effective. Just do not care about cash money the moment it leaves your bank account. But what does that mean? Well pretty easy. Every cash withdrawal counts as an “expense” at the moment of the withdrawal. All cash withdrawals that happen in a certain month count as expenses in that month even if you do not spend the money.
But that is wrong! You might scream now. Well it is and it is not. Of course in the short run it might look pretty stupid if you withdraw 100 EUR in a month but you did only spend 20% of it. However, in the long run it brings you in the right mindset. If your money is not in the bank account, you cannot invest it and it is just lying around. It might as well be stolen or spent. Also, in the long run the money that you withdraw from your bank account will even out. One month you withdraw 100 EUR, one month 400 EUR and one month nothing at all. In the course of the L12M (last 12 months) these differences do not matter much.
In the end, it also does not matter what you bought with your money. You buy cigarettes? You buy food? You buy presents for other people? It does not matter why you are losing money. It does not matter why your expenses are high or low. They just are. You do not have to justify expenses by putting them into neat boxes but simply accept that they should never be higher than necessary.
This is just a good help to become financially free and you do not have to follow it. You do not have to do anything I write here. But if you want to join the club of the financial unicorns make sure that you do exactly what I wrote above and adhere to these rules. The faster you do, the faster you will step forward on your path to financial freedom!