Where Does My Money Go?

Many people lost significant amounts of money throughout the year and have no idea where it has gone. It seems like paycheck after paycheck, more and more money keeps disappearing. Here we will discuss a few tips for solving that “money mystery.” Wouldn’t it be great to know where your money is and even be able to save some of it?

• Keep an expense tracking log – How can you know where your money is going if you aren’t keeping track of it? By writing down every penny that goes in and out of your household, you can know for certain where those “spending leaks” are. Knowing is the first step. Try tracking for a month and see how it can help you out. It may seem daunting or unnecessary or tedious, but you will find that it can be incredibly useful.
• Set goals and follow up on accomplishing them – Once you know where you are spending your money, you can see if it lines up with your goals. Say you want to save $1200 for a family vacation because it is important to spend that time together each year. Your goal is to save up for this special time with your family, and now that you can see where all the money is going, you have the power to make changes and realistically strive towards your goals.
• Make a budget to accomplish these goals – So you figure you need to save $100 each month to have your $1200 vacation fund ready in 1 year. If you create a budget, you can enter this $100 as a line item. You can also adjust other items if you find you don’t have enough each month for your vacation fund. For example, you might cut out your daily latte and decrease the grocery budget in order to shift enough over to that vacation fund. You can set all sorts of goals, but having a budget puts the numbers right in front of you and helps you accomplish them. Another thing a budget does is help you stick to your goals. Before you make purchases, you can determine whether they are in line with the budget you have created. Do you really need that new purse? Will it keep you from being able to save your monthly amount for the vacation fund, which ultimately means time spent with your family?
• Stick to it! – If you will do these three things and stick with it, you will be sure to find out where all of your money is going each year. Keep tracking every penny, keeping in mind your long-term and short-term goals and budget.

If you would like to learn more about expense tracking, budgets, and creating and achieving goals, we would be happy to discuss them with you! Our desire is to get people to a place of financial freedom, and these are essential building blocks to achieving that success.

Tags: budgeet, set goals, tracking