Where is your money going?

Back to money. We will move on to question three: Where does my money go? No matter what your income level is, you can’t save money effectively if you don’t know where you are spending. I’m not talking about necessarily putting together a strict budget. Budgets can be discouraging and incredibly tough to follow. I’m just talking about tracking your spending, but I am talking about tracking ALL of your spending. This includes food, eating out, gasoline, utilities (water/sewer, electricity/gas, cable/internet), mortgage payments, car payments, student loan payments, insurance, and everything else you spend money on, including alcohol, cigarettes, and that afternoon snack or cup of coffee.

Luckily with technology today, it is easier than ever to track your spending. I still like to use a spreadsheet to track our family’s spending. Each month is pre-filled out with normal monthly expenses and even the amount, if known (i.e. mortgage, insurance payments, cable/internet). I highlight the recurring expenses with one color and any bigger one-time expenses in a separate color. I also specifically track grocery spending, spending on gas, and spending on eating out. There are plenty of apps out there that could track spending for you, but I still like using an actual keyboard. It is what works for me.

If you’re interested in the best apps out there, simply do a Google search for “top spending tracker apps.” Some main differences between apps is the ability to input expenses manually (including your cash spending) and the ability to link directly to your accounts.

There are many ways to track your spending, but in order to set achievable short-term and long-term financial goals, you need to know how much you are actually spending, and where you can cut back your spending. In the next post, I’ll talk about coming up with financial goals. So, if you’re following, try to think about at least one short-term goal (2 years or less), one medium-term goal (2-5 years), and one long-term goal (over 5 years). If you can, think of two or more for each time length.

If you do track your spending, feel free to share what tools you use!