Your Money: Where Does the Money Go?

Whether you’re trying to save more or looking to pay down debt, knowing where your money is going can be helpful. And I’m not just talking about bills, though that is, of course, important. I’m talking about the little things and the not-so-little things that come up on a daily or random basis.

Without knowing where your money is going, it can be difficult to make effective changes to your habits and make progress in your saving or spending goals. By tracking your expenses you can properly plan and decide where to cut back so you have extra money to apply toward your debt or save for your goals.

To track your expenses, carry a notepad with you and record any money you spend — whether it’s 75 cents in a vending machine or a shopping spree at the mall. You  may be surprised at what you spend money on and how easily it disappears. Keep the log for a week, month or longer — however long it takes you to see the pattern and find ways to cut back. Maybe your downfall is clothes. Can you spend less? Shop elsewhere? Buy one blouse instead of two? Or maybe you stop at the vending machine a few times a week. Would it make more sense to buy in bulk at the store instead and bring your own snacks? Tracking your purchases can help you pick up on these quirks and guide you in ways to save.

Once you’ve found areas to cut back, take action. When you find yourself moving to spend that money, stop yourself and earmark that money toward your goal instead. Even 75 cents a few times a week adds up. And that can make a big dent in your debt or savings goal.

If while tracking your expenses you find yourself spending on unexpected expenses such as car repair bills, consider starting an emergency fund. Put a little money aside on a regular basis so that when an unexpected bill comes up you’re ready for it. As I said above, even a small amount adds up over time. And being able to plan for the saving can help make the expense more manageable than having to deal with a several-hundred-dollar bill all of a sudden.

While you’re at it, take a look at your bills and see what you’re spending on. You may be overspending on things you don’t use. Make that money work for you instead of wasting it. Your goals may be closer than you think.

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