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Where Does Your Cash Go?
How to Discover Your Money Drains and Improve Your Financial Prospects
Do you often wonder how you spent your money whenever it is time to pay your monthly bills? If you learn more about your financial drains, you will have the ability to control your money, deposit more funds into a savings account, repay your outstanding debts, and buy desirable items.
You may have to put in some effort to determine just what you are spending your money on. To gain control of your finances, you need to have a complete picture before you can work toward your financial goals.
Practice the following tips for locating your money drains and increasing your chances of a positive financial life when you create a household budget:
- Figure out every single source of income you currently receive, including interest from a savings account.
First, you need to make a list that includes every source of income that everyone in your family earns. Create a chart in which you list your job earnings, savings account interest, and investment dividends you received during the last month. Your chart is going to alert you to the amount of money you receive every month.
- Record your expenditures.
List every expense that you have per month, including rent for your apartment, your house mortgage, automobile payment, credit card payment, interest for a loan, fuel for your car, food products, utility bills, cable television, and Internet service. Give precise numbers if you can, or make good estimates if the costs go up and down. This list will offer you a good explanation as to how you spend your money.
- Look at every cent.
For a whole month, keep track of each cent that is spent. Note the amount of money that your balance reflects on the first day of the month, and write down the amount of money you spend on each purchase. That’s crucial to figuring out where your money is going.
- Do some analysis of the results.
Look at how much money you earn each month and compare it what you are spending every month. Do you spend more than what you have? Do you put aside money to save, invest, and retire on?
- What money drains do you have, if any? Do you spend $4.00 on a latte every weekday? Are you spending more on eating out than you thought you did? Do you take a homemade lunch to work, or do you buy expensive foods from a vending machine or nearby restaurant?
- Use this information to your advantage.
You will have the ability to master your money better after you have recorded all of your monthly earnings, interest, and expenditures. With this information mapped out before you, you can tweak your finances here and there until you are depositing more into savings and watching less just drift away each month.
- Figure out methods to decrease these drains on your money. Would you be able to make coffee in your own kitchen to save money? Will you be able to save money by cooking more in your own kitchen? If so, you will find that you can save extra money each month, and every time you save, money in various compartments of your budget can add up quickly.
Once you have a handle on what you are bringing in and how much you are spending, you can begin to focus your money on the things that you value most. Cut down on some of the items and services you typically use, or find a second part-time job so you are spending money within acceptable limits. If you set good goals for your finances in the future, you will have much better prospects for attaining success.