Welcome to 31 Days to Organize Your Finances. By the end of the month, my goal is to help you have a detailed financial plan for your family. We’ll talk about cash flow, budgets, debts, and all of the nitty gritty of our finances that might not be fun to talk about, but are so important to discuss. Please refer back to the original post for a complete list of daily assignments.
Do you know where your money goes each month? You’re about to find out!
Today’s assignment: Determine where you are spending your money.
If you use financial software, such as Quicken or another form, you’re in luck, you can simply print a monthly recap. But if you currently do not have a system, this exercise could take you several days to tabulate. Try to finish by the end of this Saturday (10/11), because you’ll need this information for next week’s assignments.
3 Steps To Help You
1. To begin, gather all of your recent bills, receipts, checking & savings account statement, and/or credit card statements. Start with September, since it was just last month and try to go back as far as you can, up to a year, if possible.
2. Write categories across the top of a piece of notebook paper or on an excel spreadsheet. Down the left side, enter one transaction per line. On each line, you will enter the date and the specific spending information, such as store/company and what the transaction is and then enter the amount under the category. When you are finished with each month, total each category and add up the categories to have one grand spending total for each month.
Categories could include, but are not limited to:
- dining out – Try to separate your groceries from your dining out
- utilities – gas/electric, water, sewer, internet, phone, cable
- car loans
- car service
- household maintenance
- gym membership
- haircuts/personal hygiene
- travel expenses, such as parking, tolls, etc
- and any single little thing that you spent money on.
3. When you have totaled up all of your spending for a month, compare it to your income for that month. Yesterday’s assignment was to calculate how much money is coming in. What is the difference between the two numbers? Are you spending too much over your income or right on your income?
If you are not organized enough to have kept receipts or statements for all of your spending, tally up what you have. This exercise is NOT your budget. Instead, it is a history of your recent spending. It will give you an idea of where your money is going.
Continue to track your spending for October and going forward. There are several ways to track spending. I have used Quicken software since the mid-90’s. Do some research and find a program that is right for you.
Do you currently track your spending? What do you use to track it? Let us know in the comments.