Money enters your life and money leaves your life.
Think about it. You get x amount each month (or possibly biweekly) in your paycheck. By the end of the pay period, you may have nothing left (or a negative balance) and still need money to pay bills. Where is all of your money really going?
It isn’t really a leap to come to the conclusion that something is amiss in your finances if this is the case. Finding the culprit, however, may be a little more difficult. But as they always say, the first step is admitting there is a problem.
Once you realize there is a problem (and your money is disappearing faster than your Easter candy), you need to crack down monitoring what you spend and where. Are you buying lunch at work five days a week? Does your mid-morning break include a walk and a latte? Do you meet friends each weekend for drinks at the local hotspot?
These are the more obvious ways your money is disappearing from your account. They have easy remedies, too. Limit yourself to one or two lunches out a week, but try to beat how much you ate out last week. If you really need that mid-morning cup of Joe (and believe me, I understand that need), buy K-cups or coffee grounds to keep in your desk and use the office coffee maker. Instead of always going out for drinks with friends, invite them over for potlucks (or take turns whose apartment you go to) or order soda and skip the alcohol (which is where the majority of your bill comes from).
Still looking for holes in your wallet? Check out your bank or credit card statement. There will be a list of the where, when, and the amount of money you said goodbye to. Have you been visiting your favorite clothing store more than once or twice a month? Do you buy fuel more than once a week? It is one thing if you travel for work or work farther than you’d like from home and your gas is used up because of it. On the days and trips in between, do you drive to multiple stores to get items you could possibly buy in one stop? This not only wastes gas but puts more miles on your car than necessary.
The best way to find all of the holes is to track your expenses for a solid month. You can use a website or app that ties into your account, but I think the best way to really process your expenses in your mind is good old paper and pencil (and calculator; I’m not a masochist for adding all those expenses!).
When you are tracking your expenses, keep receipts and spend a few minutes every few days adding up the totals. Make sure to include where you spent money, what the date was, and how much you spent. You can even break it down by evaluating your receipts at stores like Target, where you can buy food, clothing, and home goods. Make a column for each spending category on your paper, and divide up the receipt into these categories, placing the totals for only those items in the category column. This will help you keep better track of where you are overspending, especially if you use these columns for every expense for the month.
At the end of the month, add up how much you spent in each category. Over a month’s time, it may seem like you aren’t spending much on clothes, only to figure out that over that month it added up to a few hundred dollars! Assuming you weren’t starting a new wardrobe from scratch, that may be a little excessive.
By doing this, you can see where you can cut back expenses and plug up those holes in your wallet. It is also a great incentive to start creating a budget! You will no longer be confused where the leaks in your wallet are and you will be able to take better control of your finances.
