Many of us see our checking accounts at the end of the month and wonder where it all has gone. This article will help you figure out exactly where your overspend occurs. And remember once you’ve finished this article to put this information into action. Because knowledge without action is akin to knowing nothing at all. Let’s get slashing!

Consider Everything

Look at everything which demands your money. Break it down into categories like transportation, housing, food, entertainment, clothing, charity, etc. Then pull open tabs on your computer with expense information. These are your credit card statements, bank account statements, etc.

At this point in the article you’re able to easily identify where you’re money is going and how much is going. Very useful information. I’d say most of the legwork is actually already done. Why? Because saving money isn’t that hard. It’s actually physically easier than spending money. Because you’re not asking yourself to do anything. Rather, you’re asking yourself not to do something. So the goal of this activity should be one of relaxation – not restlessness.

Find out the Minimum You Could Spend

Many people call this a ‘bare bones budget’. That is, what is the minimum amount of money you could spend in order keep living your life? So what is the minimum you could spend?

Let’s start at look at your transportation. How expensive of vehicles could you own and still get the job done? Instead of driving an Escalade, how about a second hand Subaru wagon? When it comes to getting the job done, they are the exact same. They both get you from Point A to Point B.

Look at the minimum amount you could spend on all other things. The idea here isn’t to create a horrible lifestyle. Rather, to get about the same lifestyle just at a much lower price. Because we want to cut our spending, not become a completely different person.

Execute the Simple Math

You now know what you currently spend. You know the minimum you could spend. It’s time to do some 5th grade math. Subtract the second number from the first. What do you get as a result? That’s how much money you could be saving instead of spending. See, finding out where you overspend is actually pretty simple. Now, actually cutting down the spending is not easy for most people. But remember, you’re not having to do anything extra. Rather, you just need to spend less.

How to Get and Stay Motivated

First, never feel like you’re living a life of scarcity. If you need to save a lot more but don’t want to make any drastic reductions to your budget, work to earn more money. After all, saving money is finite. Making money is infinite.

Find people who share your new mindset. There are many, many ‘frugal’ people out there as well. You can find these people online and in-person. Start by reading frugal blogs and forums. Then make real life friends. Pretty soon you’ll realize spending less doesn’t mean living less. It’s trite but it’s true.

Finding out where you’re overspending is a noble pursuit. You get to save money. And the best part? You’ll get to learn a lot more about what you truly value. If you want to see what kind of person you really are, examine your finances.

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William Lipovsky owns the personal finance website First Quarter Finance. His most embarrassing moment was telling a Microsoft executive, "I'll just Google it."

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