Where Did My Money Go
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One day you have cash in your pocket and then, Poof!, the next day it's gone. If this seems to happen to you often, then it is time to track your spending habits.
Tracking your spending, developing a budget and learning to save are skills that do not come naturally for most people. The first step in being money savvy is to learn how to track your expenses.
Hardcopy tracking
One of the simplest and easiest ways to track your spending is to use a piece of paper that measures 8 ½ x 11 inches. Fold this paper in half, then in half a second time and finally in half a third time. When you open it up you will have 8 rectangles. In each space write down the days of the week. The last space is for weekly totals. You can do this on both sides of the paper. This is the perfect size to fit into a billfold or wallet so you can take it with you.
Every time you spend money on anything you need to write it down in the correct space. Eating lunches out, grabbing a latte or getting a snack from the vending machine are all things you should be writing down in the spaces each and every day. No expense is too small to track. After two weeks of doing this tracking activity, you can see where your spending holes are. For many people who do this they are shocked to see how easily their money just disappeared.
Electronic tracking apps
If you prefer to do things electronically, there are apps on your phone that can help you track your spending. Many of these apps connect a smart phone to your bank account to track spending. They even can give you advice and recommendations on modifying your spending or let you know when you have over spent in a budget category.
Other apps can duplicate the tried and true method of using envelopes for budgeting. It uses the idea of taking your monthly income and dividing it into virtual envelopes. When you have spent all of the money out of that envelope for the month, then it is “gone” until next month. This is a way to budget expenses to help you curb overspending on one category, for instance groceries, each month.
After you have tracked your spending for at least a month, you can use this information to start to build a budget for your household. If you want to take a vacation, buy a home or save for retirement, a budget will help you to begin to work towards your financial goals. Learning to track and take control of your spending is the first trick of money management.
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Joy Miller
Family and Community Wellness Agent