Do you know where is your money going? Do you know where you are spending every dollar? If I were to ask you how much money you spent last month eating outside of your home, for example, could you give a specific answer?
If you cannot answer specifically, to the dollar, you could manage money more effectively by knowing where it is going, where it is being spent.
And once you know, you can make adjustments to your spending and live within your means. And it’s just good to know.
To do this you need to keep track of where you are spending your money.
How do you keep track of your spending
There are several ways that you can keep track of where you are spending your money.
A lot of people use debit cards for their expenses and if you are one of them, you could keep the receipts of all your expenses and write them down once a week or so. You could record everything in your check register as you purchase items. Some banks are now including a place in the check register for writing down debit card transactions.
You could use a financial app to keep track of your transactions or a spreadsheet, or even a piece of paper in a notebook. I currently use an app to track all of my expenses.
Whatever you decide to use, remember, the goal is to track your spending – use something. Try something and see if it works. If it does not work, try something else.
Remember, you cannot manage your money effectively if you do not know where it is going.
Knowing where your money is going and the spending plan
Too effectively manage your money, it really helps to have a spending plan.
In creating a realistic spending plan, the first step is to know where you are spending your money and tracking your spending. After you track your spending, and you get a way or history of how you spent your money last week; last month; last year. That history helps you develop your spending plan for this week; this month; this year.
All a spending plan is an estimate of how you are going to spend your money…the better the estimate, the easier it is to stick to it which is critical when working with a spending plan.
Additionally, in working with a spending plan, once you know and realize that you are spending too much money eating out, for example, you have a starting place to change that habit or behavior and decrease spending. As you begin to see where your money is being spent and where its going, you will find areas in your spending that you can cut to help you meet your goals.
Final thoughts on knowing where your money is going
knowing where your money is being spent gives you control over your finances and giver you peace of mind about your financial situation.
When you know where your money is going and you are using a spending plan, you are more likely to manage your money better. You are telling your money where to go, and it is going and doing what you want it to do.
It’s working for you and not the other way around. As it should…its your money. Like this post and share this with others that may benefit. Contact me if I can help you create a winning spending plan.