Money In, Money Out
Creating a system to keep track of your income and expenses will help you take control of your money. We’ll take a look at where your money is going in this lesson.
If you’re like most people, managing your money can feel like a hassle. There are bills, loans, checks, and payments. You probably just want to close your eyes and hope that it will all take care of itself.
In this lesson you’ll learn to take control. We’ll give you tips to manage your income and keep track of your expenses. To begin, we’ll look at just two simple things: where your money’s coming from, and where it’s going.
So, starting with the last month, write down all the places where you got your money. Did you receive a paycheck from work? Did you make a few bucks selling old clothes, or get a little cash as a gift?
After income, the next thing to do is to hunt down your expenses, and that’s a little trickier. There are big things like car payments, insurance, and rent, but then there are smaller ones that you might not even notice. The goal is to figure out where every penny goes, and even though it sounds hard, don’t worry, we’ve got some tricks to help you do it.
So just like you did with the money you made, take a close look at the last month and write down all of the places your money went. There’s probably going to be a lot of them, but by focusing on a single month, you’ll have an easier time figuring it out.
Once you jot all of them down, organize all those little expenses into categories. So create a category for housing and a category for the utilities you pay. Create a category for food and entertainment, and create any other categories that you need. Once you have those in place, drop all of those little expenses where they fit. By doing this, dozens of separate costs will be combined into a few big groups.
It’s pretty simple once you get the hang of it, but the important thing is to roll up your sleeves and actually get it done. What you make and what you spend are the foundation of personal finance, and by creating a system to keep track of them, you’ve taken the first step in controlling your money.