Where Does My Money Go?

If you want to get out of debt, you need to know where your money is going. Without this information, you’ll never reach your debt elimination goal.

So how do you figure it out? Simple. Track your expenses for a month or two! Seriously, get one of those little spiral notebooks that fit in a pocket, and every time you spend money, write down what you bought/paid for, how much you paid, the method that you used to pay for it, and if it was mandatory or discretionary. For the record, I really do mean everything. If you buy a pack of gum, write it down. You might be extremely surprised to find out how much you’re spending in the vending machine at work. At the end of the month, you’ll have a really simple log to figure out where you’re spending money.

This method has an interesting side effect: when you’re recording everything that you’re spending money on, you’ll probably find that you’re a lot slower to spend money on trivial things, just because you don’t want to record it.

That’s it! Really, it’s that simple. I’m sure I could come up with a way to overcomplicate it, but why? Want to simplify it even more? Use Mvelopes. By connecting it to all of your credit cards and bank accounts, you can automatically track and categorize your expenses! Need more info? Come discuss it on the get me out of debt forum!

Tags: debt elimination goal, get me out of debt, get me out of debt forum, reach your debt elimination goal, where does my money go

This entry was posted on August 31, 2011 at 9:59 pm and is filed under Debt Elimination, Getting Out Of Debt. You can follow any responses to this entry through the RSS 2.0 feed.