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You know how much you make.
But where does it all go?
You know your annual income. And you know how much of it you spend on big-ticket items, like your mortgage, rent or car payments. But what about groceries? Or school? Clothes? Coffee? Haircuts? Do you know how much you spend on all of that?
Probably not. No wonder why you can’t seem to save money—and why you seem to be living paycheck to paycheck. There’s a phrase, “Failure to plan, is a plan for failure.” And without a plan, your money goes where your impulse leads—and that’s not always to the bank.
Take the first step.
If you want to reach your financial goals, you need to be honest about your spending habits so you can figure out where you can—and should—cut back. A daily latte may not seem like much until you add it up and see that your $3 coffee is costing you over $700 at the end of the year. But, if you make it a once-a-week treat, you’ll save over $600!
Step 1: Track your spending for two weeks.
For two weeks, jot down everything you buy and how much it costs. Groceries, public transportation, parking, toys for the kids, magazines, movies, even that daily latte. Get the worksheet
Step 2: Review your credit card and checking accounts.
Review all purchases, large and small, made with your credit cards or through your checking account. Go back at least six months and add it up by category. Get the worksheet
Once you tally it all up, you’ll have an accurate picture of where your money is going. Then you can start to prioritize and see where you can cut back and what areas you can eliminate altogether. It’s an exercise that may come as a bit of a shock. But once it’s done, you can leave the land of denial and start achieving your goals.
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