Where Does All Your Money Go?


If you're like me, you start out the month with great intentions. You plan to pay all your family's bills on time, pay extra on your debts, whatever they are, and use all your money-saving talents to help your family get ahead financially. Then one by one, things come up that you didn't expect. You spend an extra $20 here, an extra $10 there. By the end of the month, you are $100-200 short on the bills. You wonder where all the money went.

Do you recognize yourself in the above scenario? That was me until last month, when I stumbled on a book by Jerrold Mundis called How to Get Out of Debt, Stay Out of Debt, and Live Prosperously. And in this book, parts of which I really did not like and could not relate to, I found the solution to the mystery of the disappearing money.

Mundis tells readers to track their spending. In a little notebook that goes everywhere we go, we need to write down every penny we spend. This was nothing new to me. I had tracked my spending before, but it had never really helped. I didn't see how I could predict these unexpected items. I am not very good at advance planning, so I didn't see how the little entries in my notebook were going to help me predict my financial future.

But Mundis doesn't stop there. In order to get a picture of where the money is really being spent, we take the notebook entries and put them into a chart. Mundis calls this our Spending Record. Just list all the different places or categories that you spend money on in a month. Make a table by hand or on your computer that has 6 columns: the categories, columns for each week of the month (1-4), and a totals column.

Each week, total the spending for each category using your checkbook and your spending notebook. Then total weeks 1-4 at the end of the month. When I did this the first time, I had a true picture of where our money had gone. For the first time, I could put a number to categories like entertainment, clothing expenses and household items. Previously, I had not budgeted for these items. Then, when needs (or wants) arose, I spent from our "extra" money for those items, not really keeping track of how much that added up to in a month.

The copyright of the article Where Does All Your Money Go? in One Income Families is owned by Jennifer Krausz. Permission to republish Where Does All Your Money Go? in print or online must be granted by the author in writing.

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