- May 24, 2021
- Posted by: calldcurry
- Category: Blog
At the end of each month, do you find yourself wondering where all your hard-earned money went?
You’re thinking, ‘I’m mindful of what I spend, doing everything right! I was expecting more in my savings then this. What is going on?’
You’ve got a leak or money drain. Something is sucking your money away from you without you even noticing it.
Discovering your financial drains will enable your money to work for you by funding your savings, repaying debt, or other things that are important to you instead of just disappearing into nothingness. It’s time to do a little detective work because the leak is coming from somewhere.
The best way to get a handle on your finances is to get everything accounted for and then move forward toward your financial goals from there.
I’m providing you with four tips for finding your money drains and improving your financial growth with a family-friendly budget:
1.Calculate all income sources.
The first thing to do is calculate all sources of income for your household. Put together a chart listing income sources and amounts for the past 30 days. This will give you an idea of how much money is coming into the household, which is the first step to determining how much money is going out.
2.List ALL your expenses.
List all of your regular monthly expenses such as rent or house payments, car payments, credit card, loan payments, gas, food, utilities, cable, internet, etc.
Try to list exact numbers or estimate if your expenses vary. This will give you a good idea of what your essential expenses are.
3.Track every penny.
Spend an entire month tracking every cent that you spend. Even that pack of gum from the gas station and the $20 you won playing cards.
Write down your beginning balance and then every dollar in and every dollar out. This is the key to determining where you’re losing money.
Use your bank’s app or others to help simplify the process.
This step is essential in determining where you’re losing money
4.Interpret the results.
This is where we get to the root. Compare how much money you’re bringing in to how much you’re spending every month on bills and other expenses.
Are you spending beyond your means?
Are you allocating money for savings, investments, and retirement?
If you have money drains, this is where you will determine where they are.
Are you spending $6.00 on an iced latte Monday through Friday from Starbucks when you could have made it at home?
Is your dining out expenses much higher than you expected?
Do you have lunch daily at expensive fast-food places rather than bringing your lunch? Daily meals from the $1 menu add up over time
Now it’s time to take action by putting this information to good use. Armed with your written guide to your income and expenses, you can control your finances more effectively.
Once you have this information laid out in front of you, it will allow you to fine-tune your finances little by little until you’re putting more money into savings and less into “money drains” from month to month.
A few dollars saved every month in different areas of your budget can add up to your benefit. Once you know how much money you have coming in and going out, you can start directing your money toward what’s important to you. Trim down your expenses or find ways to increase your income, so you’re not spending beyond your means. Your financial future will shine much brighter when you enable yourself to prepare for the future you desire.