Where is Our Money Going?
Knowing Where You Have Spent Your Money
Getting control over your finances takes a lot of work, especially when you are on one income. The very first step is knowing where your money is going. Have you looked at what you are actually spending? You don’t need a spreadsheet, or an app, those can make it easier, but honestly, just write it all down. Write down every single expense you had over the last month, and categorize it. You might just uncover a weak spot that you can fix.
When MY Money Becomes OUR Money
Get comfortable looking at your finances together. If you do not already have a joint bank account (and have a healthy marriage built on trust), I would stop what you are doing and combine them. Your money is now HIS money and his money is now YOUR money. It is collectively now called OUR money. What he makes, you make. Begin by gathering detailed information about your current income sources. This includes your salary, bonuses, investment returns, and any other sources of income. Create a comprehensive list to get a clear picture of your total monthly earnings.
Looking Back
Next, look back at your previous bill statements and delve into your expenses. Categorize them into fixed and variable expenses. Fixed expenses include mortgage or rent, utilities, insurance, and loan payments, while variable expenses encompass groceries, dining out, entertainment, and other discretionary spending. Review bank statements and bills to track your spending accurately. Write down everything, even if it was just a $2 drink from McDonalds. Once you have a complete view of your income and expenses, it’s time to create a budget. Start by listing your essential expenses, ensuring that they don’t exceed your income. If you want more information regarding emergency funds, reducing debt, and saving for retirement, I suggest looking into Dave Ramsey and his Total Money Makeover. This book helped our family greatly.
A realistic budget serves as a roadmap for your financial journey. It helps you identify areas where you can cut costs and provides a framework for building financial security. Numerous budgeting tools and apps can assist you in this process, making it easier to track and manage your finances. Frequently, income varies month by month, as is the situation with our family. We personally budget off the bare minimum we need to meet our monthly expenses. If my husband makes more than that, or gets a tip, or if I make something on the side from selling something, we do not put that amount into our monthly income.
Getting Started
Sometimes it is hard to even know where to start. I made a freebie for that exact reason to help you start tracking what you are spending on. I am not a financial expert. I am just a mom who needed to keep track of her spending too.
I really enjoyed this! Some great advice!