Before you can even begin to think of getting control of our money you must first find out where it is going. Drawing up a budget is a complete waste of time if you have no clue where all your hard earned cash has gone.   Setting a limit for yourself of $50 a month on clothes – makes no sense if you currently spending over $100 each month.  Before you can chart a new direction for your personal finances, you must find out where you and your money are headed.

When I was back in high school – I made some great coin working various jobs for the Town of Pickering. I was rolling in it, and since my awkwardness towards the opposite-sex ensured that I didn’t have a girlfriend, my dough was all mine. When I look back now at all that discretionary income I had I am left with one question – where the heck did it all go?

The reason, I don’t know is that I never tracked my spending. I couldn’t tell you how much I spent on entertainment, clothes, or fast-food. The only thing I could tell you was that I didn’t save a thing. I never could be bothered tracking my spending – because in my day (man, I sound old) we didn’t have debit cards. Everything was paid for with cash – which can be a good thing, but it doesn’t leave a paper trail. When spending cash, tracking your spending requires you to write down in log book or computer the details of each cash payment. Who has time for that?

Luckily for you, we live in the time of debit cards and internet banking. These tools will track your spending for you. All you have to do is use your debit card instead of paying cash for one month. I think you can do that.  

Now, I know there are still some instances when you will need to use actual hard cash. You will need to record where the cash went each time you pull it out. So only use cash if you have no other choice during the month.

The key point however, is that you shouldn’t change your spending habits at all. If you have internet banking account all you have to do is go back and look at your transaction history and add up where you are spending your money for a month. Each transaction will have a summary and give you details of where you are spending your cash.  
If you don’t use internet banking currently its time you got into the 21st century and signed up. Otherwise you can track your spending the medieval way and by using your debit card and collecting your receipts in a shoe box for a month. Then go back and look at them to add up where your money has gone.

Either way tracking your spending for one month is pretty easy and requires little effort. Just do as you do – then go back and take a look. What you find may surprise you.

When looking things over you may say to yourself some of the following common reactions:

Who knew I spent $300 on going out to eat?!”

“Wow -  my phone costs a lot?!!”

“I just spent over $400 this month on clothes that I don’t even wear”

“Yeah, that seems about right.”

Whatever your reaction is at least you now know where your money has gone. Now comes the tough part – deciding if you are happy with your spending decisions.  This is a personal decision that is yours to make since it’s your money.  Maybe life is good and spending every dime you make partying it up is fine by you.  Getting in charge of your finances doesn’t mean you have to make any big changes where you spend – the change will come from how you spend. But before we get there I do need to shed some light on your unavoidable future and the bills that come with it. This is the part missed by older people who complain they were never told about this when they were in high school. Well read on and then be rest assured that now- YOU HAVE BEEN WARNED!!