How to Keep Track of Your Money

Most people have no idea where they spend their money; spending money became such a habit to them that they don’t pay much attention when they give cash to somebody or use their credit card.

Not only that, but I also have seen people that honestly don’t even know exactly what they earn in a month and NO; I am not talking about those multibillionaires :)

You many think you know how much you spend in a month, but do you really? Mortgage, bills, groceries, eat out…. there are so many things, so many expenses, that you really have to keep track of it to have control over it and manage it.

In order for you to manage your money, the first thing you need to know is where you spend it.

Your spending information is crucial and will allow you to understand your Cash Flow (the money going in and out of your pocket) and many other things… take a look:

The very first thing you need to do is start taking notes of each and every expense you make. You can call it your "Spending List", "Spending Log", "Budget - Cash Flow" or “Money Tracker”.

You are going to write down in your list/log ever single dollar you spend, mortgage, bills, and groceries, eat out, gifts, etc.

Create a spreadsheet for your list/log. Include the following items to your spreadsheet as Columns:

• Date = Date of the expense
• Description = Location or Store of the expense
• Group = Group that the expense belong to, for example: Vehicle, Home, Kids, Eat Out, Misc…
• Type of Payment = How did you pay for it: Cash, Credit Card, Gift Card…
• Amount = The value in Dollars of the expense
• Additional Notes = Any additional note

Here is an example:

Remember you must write down everything. The best way to do that is to write down as soon as you get back home, that way you don’t fall behind and forget things.

You can do a number of things with this spreadsheet, tables and charts of your expenses.

Note: Do not to use the word Miscellaneous too much; people have a tendency of putting Miscellaneous to things that they don’t want or know how to categorize and they end up over doing it. Try categorizing as much as you can.

Use the Additional Notes column, for example, when you buy gifts, adding “Gifts” under Group, write for whom and why under Additional Notes, this will help you a lot a year of two from now when you are analyzing your spreadsheet.

Using this spreadsheet to keep track of your money will help you:

• Organize your finances
• Know where your money is going
• Find and recognize spending leaks and wastes
• Find and recognize your spending habits
• Plan your spending before they happen
• Control your credit and limits
• To be credit aware and credit wise
• Manage family spending (does your partner agree on where the money is going?)
• Manage your savings goal (amount of money you want to save every month to achieve your life goals)
• Manage your life goals (retirement, school for the children, own home, pay off debt, vacations)

Be careful with “change money”, “cheap money” and “funny money”, those little expenses that you have through the day and you are so used to them that you don't pay attention and don't care much about it to keep track.

They can turn into a substantial amount of money at the end of the year if you add them up. A $2.00 cup of coffee in the morning and in the afternoon turns into over $1000.00 annually, and I am talking about weekdays only. Please read more about this here: How to Make Your Money Grow.

Once you start keeping track of your money you will be able to balance your budget increasing your income and decreasing your expenses.

Include in your spreadsheet your regular income and any other income you and your spouse have. Add all your expenses and subtract them from your total income. Compare you spending with the previous month.

Also add the amount of money you are saving each and every month and create a chart of your monthly savings.

I hope this helps you understand and keep track of you money from now on.

If you have a tip about this topic, please leave a message and share it with us.

Thanks for reading and best wishes to all…

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