The hardest part about budgeting is getting started. Do you know where you spent your money this month? If not, you aren’t following a budget plan and will keep asking yourself the same question every month: “where did my money go?” I’ll show you an easy answer to this question and start your budget plan.
Start a money log
You can’t change your spending habits if you don’t know how you’re spending your money. The first step of a successful budget plan is a money log. It’s easy to find out where your money goes every month. Follow these steps for a month and I guarantee you’ll be amazed at the results.
- Buy a small notebook
- Carry it with you every day
- Write down everything you buy, how much it costs, and why you bought it
Stop impulse buying
This may seem silly at first but think about the advantages. You can spend money so easily these days on products you see on advertising, TV, billboards, and the internet. Are you stopping to think why you’re buying things? Do you really need them or is it an impulse buy? If you’re having a rough morning are you more likely to buy extra sweets on your way out of the store? Using a money log will force you to pause and think about why you’re making a purchase. It might not be worth your effort to buy it and have to write it down in the money log.
Is it really making you happier to not have money at the end of the month? The things you’re buying on impulse may make you feel better in the moment but they’re not adding to your long term happiness. Think about what you could get with the money instead. Little savings you make every day can transform into bigger goals you have, like a vacation you’ve always wanted to take.
Commit to change
Make the commitment! Write down all of your purchases this month in a money log. You can also accomplish it with a notepad app on your phone or automatically with Mint.com. Either way, commit to tracking your spending this month so you can answer the essential question of “where did my money go?” at the end of the month.