Money Management: The 3 Highlighter Method

Money Management:

The 3-highlighter method to help you get your financial shit together

This is the exact method I used to pay off $17k in debt + begin getting my finances in order.

It paid off! So well in fact that I afforded an 8-month sabbatical from work,  used to take 8-weeks of vacation each year from my gym, and I make sure to travel several times each year.


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What you’ll need:

  • 3-12 months of bank statements, printed
  • 3 different color highlighters
  • a comfy spot
  • some patience & curiosity, and a will to get your $$$ shit together
  • rescue pittie optional

Step 1:

Identify at least one financial goal you have for yourself. It can be anything!

Just like with fitness goals, your financial goals should be:

  • specific
  • measurable
  • attainable
  • relevant
  • time-bound

Some examples might be:

  • pay off $3k in CC debt
  • save $30k for a downpayment
  • save $15k in emergency fund
  • save $10k for island vacation

We’ll get into specifics of time later.

step 2:

Identify which color highlighter is associated with the following 3 categories:

  1. Necessary, non-negotiable transactions and purchases.
    Think: rent/mortgage, utilities, gas, groceries, etc.
  2. Discretionary but explainable.
    Think: you bought a blender because you need a new one.
  3. WTF purchases.
    Think: another. $300 at Target on more random shit that you don’t need/won’t wear

????looking back at previous transactions is illuminating!

Loved that Target haul in the moment? How does it feel a few months later? Without self-criticism or judgement, get curious. You may notice it feels different looking back and easily falls into the “WTF” category.

step 3:

Go through each transaction, paying little mind to the details or the totals.

Highlight each transaction with its respective color.

step 4:

You now have a quick, visual snap shot of where your money is going!

Take a break here.

Refill your coffee.

We’re almost done!

Step 5:

Add up your WTF color.

You can take the average WTF color if using multiple bank statements- this is what I recommend. The larger the sample size of spending data, the better!

step 6:

Revisit your financial goal.

You’re in the power seat now!

Let’s say your average WTF color was $1,700.

And let’s say your goal was to save $15k in an emergency fund.

Now you can play with the timeline.

You can really buckle down and get to your goal in as little as 9 months.

You can continue to give yourself grace in your budget for more WTF

spending (it is fun!) and plan to make it to your goal in 18 months, giving yourself $850/month in WTF money.

Bada-bing, baby. You’re now 6 steps closer to getting your financial shit in order!

Want to chat more about money with me? Tune into these podcast episodes: