Where does all the money go?

Have you ever gotten to the end of the month and asked… where did all the money go?  Even if you tend to be more of a saver than a spender, you can find yourself in this predicament if you don’t sit down and plan a monthly budget.  Yes, actually take the time to sit down and make a budget, because it is worth your time.

There is more to this, but this is a good starting point:

1.    Seeing where your money goes.
2.    Making a budget to tell your money where to go.
3.  Actually following the budget that tells your money where to go.

Step One:   I would do is sit down and gather the last month’s expenses using bank statements, pay checks and the like.  Then I would enter it into a spreadsheet, or money program of some sort. If you need one comment, or email me, and I can send you the one we use.  

If you have never used a budget before you will probably see some red flags.  I remember the first time Andrew and I did it, I was shocked to see how much we were spending on groceries and eating out.  Take time to really analyze this; record the red flags you see.  Did you spend more than you made? Did you forget to tithe last month?  Is there money not accounted for?  What percent of your income goes toward payments? Savings? Retirement?

Be honest with yourself.  That is what we had to do, we would talk a good game, but where was the money really going?

Step Two:  Using what you have learned from step one create a budget using a spreadsheet, or money program of some sort (again the spreadsheet I use).   Make categories that fit your needs and how much you will spend on each thing.  Plan for expenses, payments, and savings.  This might not be perfect the first time, but it will be a start!

Step Three:  Actually follow the budget.  The time spent on making the budget will mean nothing if you do not actually follow it (trust me we’ve done that one before too).  Enter things daily if possible.  Talk with your spouse/family about how it is going.  You will take this budget and after following it for a month revamp it again. 

More to come about next steps now that you have a budget! :)