Track Your Money, Save Your Money

We have all been there: It’s the end of the month and you are going over your finances when you realize there is a chunk of money missing from your budget. You have no idea where it went. You know it wasn’t stolen or misplaced. You definitely spent it…but on what? Where did it go? It can be a scary feeling and sometimes it can be downright depressing. How can you be spending your hard earned money and still have nothing to show for it? Don’t get too down in the dumps about it though because you are definitely not alone. According to a study by Visa, nearly half of all Americans lose about $2500 in cash every year. That is a lot of money to just go missing! In fact, it is about $200 a month that could have been used towards bills or put into savings. If you want to turn around your spending habits in this new decade, then tracking your money can be one of the easiest ways to get “free money” every month.

Where does it go?

There are a lot of ways money can just go missing from our bank accounts. Most of us try to keep a bit of cash on hand for small purchases and emergency resources. That means that cup of coffee and that pack of gum are covered but these are just the kind of purchases that add up quickly – as quickly as they are forgotten about. Further, if that cup of coffee cost you $3.05, that means that you now have a handful of change that you may or may not use on your next purchase. You may use the quarters on parking meters and toss the rest into a tip bucket. Often we don’t think of the change as part of our purchase. See how quickly your money is evaporating? With each of these kinds of money uses, we “lose” our money.

Here’s the plan…

There are a few easy ways to track your money so that you can decide how to best manage your accounts for the rest of the year. Use this month to assess where the money is going.

1) Debit Cards

You can decide to go cash free for the month. This way you will have a full report at the end of your billing cycle on exactly where all your small and large purchases went. You can then look at your expenses and it will be itemized and totaled without any extra effort by you.

2) Take Notes

If going without cash isn’t possible, then put all your cash within an envelope that you can then write on as soon as you make each purchase. When you buy your coffee, pencil in the date and the amount right on the envelope. You can also choose to use a small notepad for the same sort of tracking technique.

Now you know where it goes…

So make your priorities happen! How much did all of your mindless, small purchase add up to? Decide if that cup of coffee is worth it or if you would rather start saving for a rainy day. Once you prioritize your spending habits you will see that you have free money at the end of the month to do with as you please.