Finances

#Adulting Step 1: Know where your money is going

Once you start tracking exactly where your money is going, you'll be able to meet your financial goals.

In the cashless age, it is easy to pull out the usual card, with a vague dollar amount in your head, and buy whatever you’re buying. Before you know it, the card declines.

What?! Where did my $250 go? 

You pull up your statement and vague items abound: 

Apple.com $12.00
Walmart $85.00
Spotify $10.00

Okay, most aren’t that vague. You spent $85.00 at Walmart, but where did this money actually go? Food? Storage bins? A new blender? You may think “it doesn’t matter,” but for a smart budget, it does. Very much.

Once you start tracking exactly where your money is going, you’ll be able to meet your financial goals. You’ll also avoid being caught by surprise by a lower-than-expected account balance.

The tool I recommend using is You Need a Budget (YNAB.) It comes with a bit of a learning curve, but once you get it, you won’t go back. Check out the tutorials available on YouTube and their Facebook page.

YNAB is especially helpful for those of us that need to pay down debt, whether credit cards or student loans. The way the software organizes your accounts and cash flow makes becoming debt-free a priority! 

Use my referral link to get a free month, and test it out for yourself. 

Another method would be a simple Excel sheet. Using the YNAB method, map out all of your income flows for the month. Next, create categories (be realistic about how you spend) and “give every dollar a job” – that is, assign your entire income to your categories. Categories can include things you want to save for.

Here’s the challenging part:

Record your expenses daily or weekly, and update the allotted amount for each category accordingly. Do this, and you’ll start to get a sense of where your money is going. You’ll also be able to see clearly what changes you need to make.

Are monthly subscriptions taking a bite out of your available cash?

Do you spend too much on dining out?

You can start budgeting at any stage of life. But if you can get a handle on your money before you get your first job (or your next one), you’ll have a unique advantage. 

Wouldn’t it be helpful to know how much you need to make to maintain (or achieve) your desired lifestyle? Tracking your money as described above can help you get a real sense of what an hourly wage or salary means in reality. That way, when you negotiate your salary, you’ll have that “target” range in your head. Don’t forget to factor in taxes!


Get one free month of You Need a Budget (YNAB.) Click here.

Have you successfully maintained a budget? Has it helped you achieve clarity?

​If not, what has stopped you?

Leave a comment below!

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