Every once in a while, I wander around my home and become overwhelmed by the clutter increase since I last did a deep clean. How does this happen? I went from a perfectly organized pantry to an exploding mess of doom-looking shelves. 

Being minimalist always sounds so appealing in my mind because it opens the door to the many things we can easily live without. The same goes for our money. As soon as you become aware of how you’re spending, you may quickly realize what a need truly is when it comes to purchases. 

On that note, I’ve taken control of my financial life by doing regular inventory. This means I make a complete list of every item in whatever requires a thorough review that day. From my transaction history to my kitchen utensils, here are five places you can take inventory to improve your finances.

#1. Review the transactions in your checking account

Suppose you don’t regularly budget and aren’t interested in tracking your expenses. In that case, an essential inventory review you can do is by going through your checking account and online banking line by line. 

As someone who is not in love with financial apps because it doesn’t hold me as accountable as an Excel spreadsheet or a pen and paper, doing regular inventory once every few months has made a significant difference in controlling my spending. 

To take inventory of your checking account, here’s what you should do:

1. Download your bank statements from the three previous months

2. Highlight each expense using a different colour to help categorize your purchases

3. Add up each category of costs with a calculator to determine your total spend

4. See where you spend the most money, and decide whether or not you need to adjust

Doing a thorough financial review is my favourite way to acknowledge the reality of where my money goes each month. Inventory removes the assumption that you are staying on track isn’t enough to build solid money habits.

#2. Take note of your kitchen utensils and current food

Another place that we end up spending a ton of money without realizing it tends to be in our kitchen. Whether it’s groceries or hand towels, at times, it can feel like your space is overflowing with all of the wrong things.

An excellent quarterly inventory tactic is to go through your pantry and freezer to write down all of the food you currently have. From there, you can use a website or app, like Fridge Pal, and use the ingredients to create new recipes. This is especially useful if you’re trying to use up any foods approaching their expiration date or if you’re doing your part to avoid food waste.

A food inventory tracker can help you:

• Create a shopping list (and avoid buying things you don’t need)

• Keep an ongoing inventory of what you have available

• Provide notifications if you have products close to their expiration date

• Find new recipes and meals to use

Most of us grocery shop every one to two weeks, and if we don’t do enough work to meal plan or prepare ahead for what to buy, we can end up overspending or shopping for all of the wrong things. This can be detrimental to our budget, which means it’s essential to stay on top of what you keep in your kitchen.

#3. Review your investment portfolio

Investing can be a scary leap for many people to make, given the many unknowns of the stock market’s future. For that reason, when we initially start to invest our money, many tend to be overly conservative with our diversification. 

When you’re younger, it’s okay to be a bit more aggressive with your investing behaviours because you have a lot more time in the market than your parents or grandparents do. For that reason, an excellent place to take inventory is to spend time reviewing your asset allocation within your investment portfolio. This is particularly important if you use a roboadvisor and are a bit more of a hands-off investor. 

I have always been a conservative investor, but recently, I did some investment inventory and went ahead to update my portfolio risk to be a bit more aggressive. It was an easy switch, and I still feel confident and stable with the decisions I’ve made. We all change and become more comfortable with investing the further along we go, which is why these check-ins can be incredibly beneficial. 

#4. Go through your closet and dressers

Recently, one of the best inventory checks I did was to go through my closet(s) and clear out some of my older clothing that was still in good condition and a lot of other clothing that had run its course. By writing down what I have in my closet, I made some new outfit combinations and became aware of what was missing or what I could eliminate from my wardrobe. 

If you know that you have several black t-shirts and a few pairs of similar jeans, you prove the importance of being aware of what we already own before buying more items.

Although I’m used to donating, I decided to sell some of my more luxury items on Poshmark to see if anyone else would enjoy my gently used clothing. So far, I’ve sold two things for a profit of $20. Although a small amount of money, it’s $20 more than I had yesterday. This seems like a great way to avoid having clothing end up in a landfill — which can happen even after we donate, and also a sweet way to make some pocket change.

If you sign up with my code (FISCHER_ALYSSA), you’ll receive $15 to shop on Poshmark.

Awareness is the first step to better understanding your money

The more we know about what we habitually buy or what items are ‘weaknesses’ when it comes to spending, the better we can set a realistic budget. This practice is beneficial to anyone who is just starting to manage their money and looking to understand their current financial standing.