What is the TREE Method?
As a mom, it often falls to you to manage the household.
One of the important tasks that need managing is your personal finances. In 2019, I was struggling to pay the family bills and couldn’t figure out why.
Things were so bad I considered claiming bankruptcy, but when I looked into it, I discovered I wasn’t a suitable candidate.
It was up to me to get our finances in check and manage our debt, so I started tracking everything.
The result is what I call my TREE Method.
It’s so simple, you can do it in just minutes a day!
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Here’s a quick rundown of what the TREE Method involves.
The TREE Method
The TREE Method is very simple.
It stands for Track, Record, Eliminate, and Expand, and it’s kept my mountain of debt from growing.
I’ve even paid it down a little since I started keeping track of things this way.
So how do you use the tree method?
If you are interested in trying the TREE method here is how to do it easily:
1. TRACK Your Current Activity
This first step is exactly what it sounds like. It’s tracking how you spend your money.
Think about ALL the accounts you have.
This includes your credit cards.
You will start by tracking everything coming and going out of your bank and credit card accounts. It’s up to you if you want to do this for both personal and business accounts, but I recommend doing for both if you have a business.
Tracking your income and expenses will give you a good idea of where your money is going and if you are making enough to pay your bills and make your loan payments every month (a key to financial success).
Not understanding this information is how many people get in trouble with debt.
Whatever you do, do not stop tracking.
I thought I had a good idea of what was going in and out of my accounts, but it took me three months before I had enough information to properly complete the RECORD step in the TREE Method.
Not all expenses occur every month.
Tracking your current expenses doesn’t work on its own.
An essential companion to track is recording.
2. RECORD Future Payments
This step is all about being prepared.
You need to know what will come out of your bank account in the future so you can make sure you have the money in the account to cover the expense.
I have a handy cheat sheet documenting upcoming expenses for the entire year.
It’s a one-page printout of an annual calendar where I have circled the days when automatic withdrawals come out of my bank account. It’s color-coded, so I know exactly what is coming out of my account.
For example, I circle the days my mortgage payments come out of my account in red, then in the legend to the side of the calendar I use the red pen to write the amount of the mortgage payment.
Car payments are blue, and I use the blue pen to write the number of car payments.
I recommend looking at previous months’ bank statements so you can check if you have any automatic payments coming out of your bank account.
Record as many as you can for the entire year.
Make sure you update your calendar any time things change in your financial life.
This could be things like your business taking off, getting a side job, or having additional payments that will come out of your bank account.
Remember to record things like those pesky bank account fees that come out of your account every month too!
Do the same thing for all your accounts, not just your bank account. You need to record any automatic payments charged to your credit cards as well.
Up next are my two favorite steps: ELIMINATE and EXPAND.
4. ELIMINATE Unnecessary Payments
Now that you’ve tracked your current expenses and recorded what’s coming out of your accounts in the future, it’s time to get out your pen or highlighter and start making some changes.
Here’s where you need to get brutally honest with yourself: Do you really need that magazine subscription? Or lunch at your favorite coffee shop every day?
While you were tracking and recording your income and expenses, you likely noticed some things you could do without.
I’m not saying you must cut everything that isn’t necessary, but I am saying you need to make some changes if you want to get a grip on your finances.
It’s a good idea to revisit the ELIMINATE step every few months, especially if your financial situation has changed.
Expenses have a way of sneaking into our lives, so checking up on yourself won’t hurt.
You may find there are things you’re willing to eliminate that you weren’t willing to let go of the first time around.
5. EXPAND Your Thoughts, Expand Your Income
The key to expanding your income is creativity.
Brainstorm and see how many ideas you can come up with to make some extra money. Leave your list for a day or two, then go back to it and see if you can think of a few more ideas.
Some common ideas are selling things you don’t use, starting a side hustle, running errands for people who are stuck at home or asking for a raise.
When you’re finished brainstorming, decide which ideas are the most attractive to you.
These will be things you can fit into your schedule and you enjoy doing. If you start a side job you don’t like, there’s a good chance that won’t last long.
Look at your list and see which ideas might work for you, then schedule time in your planner to do them.
For example, if you decide you’re going to ask your boss for a raise, write the date and time in your planner when you are going to meet with them.
I’m a big believer in the power of our thoughts.
I grew up hearing “mind over matter” and having The Little Engine that Could read to me.
There’s a famous quote from Henry Ford that goes something like this:
If you think you can or you think you can’t, you’re right!
I believe this wholeheartedly, and that’s why I encourage you to take on a positive mindset when it comes to your finances.
If you think you will never get out of debt or never make more money, you’re right!
Let’s change that. You can use money affirmations that work to remind you that money is on its way to you right this minute.
Things WILL turn around for you.
A quick Google search provides lots of options for affirmations for moms and for turning your financial situation around.
I really like: I’m a pro at managing my finances!
Those are you 5 steps to The TREE Method!
Make It Work for You
I know this seems like a lot of work, but I’ve broken down the TREE Method this way to make it easy to implement each day.
This system works best if you do it consistently—make it a habit. I recommend finding a time of day you know you’ll always be able to spend a few minutes working on one step in the TREE Method.
A few minutes is all it takes to make a difference!
Maybe first thing in the morning before your kids wake up, while you have your cup of coffee, or as you’re winding down for bed will work for you.
As much as possible, be consistent.
I find it’s easiest and less time consuming to work on my finances DAILY rather than letting it build up over a week or longer.
Plus, if you wait a week, you might miss a bill payment or automatic withdrawal that causes you to go into your overdraft.
Take a breath and remember, if you make it a daily habit, it won’t be so overwhelming.
The key is small steps each day. I won’t lie and tell you it’s easy. It takes work, but with consistent, daily habits, in just minutes a day, it will feel less like work and more like progress.
And there you have it, will you be using the Tree method moving forward?
We would love to hear from you, leave your comments below.
Read next:
The TREE Method – How To Get Your Personal Finances in Order In Just Minutes a Day
Michelle is a mom of boys, author, illustrator, and former accountant. She writes self-help, thrillers, romantic suspense, and children’s books with her sons under the pen name AJ Kormon. When she’s not writing, Michelle enjoys cartooning and losing to her kids at Uno!