Really early on in my life, when I had just gotten out of college, started my first post-college job and had to rely on myself for the first time to get bills paid I had difficulty making my check last through the month. I had problems getting to the end of the month with any cash in hand. I couldn’t figure out where the money was going. I didn’t feel like I was being extravagant but still there was more month then money.
One of the most difficult things in regards to money is getting a handle on where the money is going. I know for many many people it seems like the money comes in and the money is gone, and they have very little idea of where it actually went.
Not everyone is a numbers person, I get that, but we can all improve our financial situation with a little knowledge of where it goes.
Here is what I did to get a good financial picture:
I had a little pocket calendar and I documented everything. All the money that came in and every penny I spent (and on what). I could literally see then where it was going, if I was over spending on frivolous things, or if it was all necessary. I am sure there are a bunch of apps for doing this now (like this one http://www.mhriley.com/spendingtracker/)
Doing this helped so much I did it for over a year. It kept me on track, helped curb poor spending habits and even helped me to save for the bigger things I needed or wanted.
Having insight into where exactly the money is going really helps to lay a foundation for where you want to go financially as well as provides good solid data for creating a budget. You don’t have to do it as long as I did; even doing it for 1 month can be insightful. Just remember to put it ALL down so the end data is accurate.
If you’d like a better overall picture of where you spend and how, take a month and track your expenses. Don’t judge what you’re doing/how you’re spending; just note where the money goes. The first step in taking control of your money is keeping it from controlling you. It’s hard to control something that you don’t fully know and understand. Once you get a bigger picture of how the money is being spent, then you can take steps to change its direction, if you realize there are things to change. Being in control of your financial picture is one of the most empowering things you can do for yourself.
