How many times have you asked yourself, “Where did all my money go”? Do you sometimes think that you should have money left at the end of the month, but don’t? If so, paying closer attention to your money flow could help you solve this dilemma. Calculating your debt-to-income ratio and creating an occasional expense fund are good places to start.
After you have a clearer picture of where you stand, tracking where your money goes each month is an important part of the money equation. Without this information, your spending plan is based on estimates and guesses. Tracking your money flow enables you to compare your monthly income to your monthly expenses and see where changes need to be made. Does your income cover your expenses? If not, what changes can you make next month?
At the end of the month, go through each expense and ask yourself if you are happy with it or are possibly surprised at how high it is. This is the time to evaluate what happened last month and plan any changes you want to incorporate next month. Based on this information, you can create a personal budget with this fillable spreadsheet that helps you organize your finances and stick to the changes you planned.
If your income equals or is more than your expenses, congratulations! But, if you find that your expenses are more than your income, don’t panic! Look at your options and choose a solution you can live with.