101: The Snapshot

 It all starts with a Snapshot.

Otherwise known as a “Spending Analysis,” the Snapshot is a look at your spending over a specific period of time. A spending analysis is like a Polaroid. It takes some time to develop and maybe a shake or two before the picture really comes into focus.

When developing my own Snapshot, I went back and looked at my spending over the course of 2010 (one year). Most financial experts agree that a one-year analysis is overkill. Six months is enough data to give you an accurate picture of your spending habits. 

When I talk budgets with my friends, this is always our starting point. And nobody likes it. Nobody wants to come face to face with the cold hard facts: we overspend, we live beyond our means, and we do stupid things with other people’s money (credit). I’m not going to sugar-coat this:


People take one look at their Snapshot and realize that their finances are hideous. They’re poorly lit. They’re out of focus. And no amount of spackle or Photoshopping can fix it. You need a new model.

So get started. Pull out your bank and credit card statements from the past six months. You can access all your records online. Print them out.

Once you have everything organized, it’s time to start doing the math.

Work your way through every statement and add up each expense in its appropriate category. Here’s a template you can use by Canadian financial consultant Alison Griffiths. In addition to patience and perseverance, the key to this exercise is honesty. You need to be totally upfront with yourself about your spending habits – even if you don’t like what you find. Sure…you could fudge the numbers or ignore December’s gift-giving rampage, but in reality, you’re just deluding yourself. DON’T WASTE YOUR TIME!

Once you’ve gone through all your statements and added everything up, divide the total in each category by 6. This new total is your average monthly spending.



But this step is key to helping you figure out where you can scale back and begin to set realistic parameters on your personal spending….meaning, your new budget!

On to the next step: 102: Your Priorities

One Response to “101: The Snapshot”
  1. Kendra says:

    Hey Ken!

    So excited to stumble upon your site. I couldn’t get enough from your weekly posts on Gail’s blog, so I am glad to have this to read, too!

    I’m just in the first steps of financial “ah-ha!” and noticed your “Alison Griffiths” link is broken. I found it through her site and will also make a point to see her in Calgary next month.

    Looking forward to reading on. Maybe I’ll get the courage to post about my successes, one day.

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