INSIDE: Do you ever wonder where all your money goes each month? Do you know what you spend it on? How about how much you need to allow for essentials such as groceries and fuel? In this post, I’m sharing my FREE “Where Does My Money Go?” worksheet and the steps to take to figure out what you need to budget each month.
When it comes to your finances, how organised are you?
Do you know where your money goes each month? For instance, what’s your weekly grocery bill? How much do you spend on fuel and travel expenses? How much do meals out and takeaways cost you? And how much these past twelve months have you spent on unnecessary purchases?
If your answer is “no idea” or “I’d rather not know”, it’s time to find out! It’s time to be brave and pull out those bank statements! It’s time to find out exactly what you do with your money and where it all goes!
Because if you want to start spending less and saving more you need to know where your money is going! How can you know what you need to budget each month if you don’t know what things cost you? More importantly, if you want to start increasing that savings account or clearing that debt, you need to know where your money is being wasted.
Know what your unnecessary purchases are and you’ll know where to start reigning things in. Reign things in and you’ll find yourself with money you can use to top up your savings or finally clear that credit card. Best of all, you’ll know what you need to budget each month so you don’t overspend.
It’s time to check in…
If the idea of going through your statements fills you with dread, I know exactly how you feel. About five years ago I was in the same position. I knew roughly what I needed to allow for bills. But the rest? I had no idea! I had absolutely no idea how much I was spending on all the monthly essentials, I never bothered to check. And because I never checked, I had no idea how much I was wasting on things I didn’t really need either.
But then an unexpected bill landed on our doormat and I needed to find out. The bill needed paying and the money had to come from somewhere. It was time to dive into our statements and see what was going on. And do you know what? I haven’t looked back! I now check our statements every month and know exactly what I need to allow for bills. And I also know exactly what to budget for all the essentials like fuel and groceries.
Best of all, because I check our statements monthly, it’s easy to see where we’re wasting our money. It’s easy to see where we’re making unnecessary purchases – which means it’s easy to reign things if needed. And, because we know what we’re spending our money on, we’ve been able to cut back on the things we don’t need. Which means we’re spending less and saving more. It’s a win-win! And you can do it too!
Related: 6 EASY Ways to Manage Your Money Better.
Where does my money go?
If you’ve ever asked yourself the question “where does my money go?” it’s time find out! And I’m going to show you how. In this post, I’m sharing the simple steps I took to see where all my money was going and figure out what all my expenses were.
If you want to know where your money is going and what you need to budget each month, this is THE post for you. Follow these steps and not only will you have a better understanding of how you manage your money, you’ll be able to start making the necessary changes so that you can start spending less and saving more.
Are you ready? Let’s dive in!
First, don’t be scared!
We’re about to dig into your statements – including those for your credit cards and any store cards you might have. And that can be a little scary. Especially if you know you’ve not been managing your money all that well or you’ve spent more than you should. If you’re afraid of finding out just how much money you’ve spent and on what, I get it. I’ve been there too! I know exactly how it feels to look at your statements and be shocked to see where all your money has gone.
But don’t let the fear of what you might discover stop you from diving in. It’s time to be honest about your situation. Tell yourself that the past is the past. You can’t get back the money you’ve spent. Nor can you undo any bad spending decisions. But you can change things moving forward. And that’s what this post is going to help you do.
Together, we’re going to take the first step towards you taking control of your finances. Together, we’re going to find out where your money is going. We’re going to figure out what you need to budget each month so you can start spending less and saving more! Here’s how we got ourselves back on track and how you can do it too.
Related: How to Stay on Top of Your Finances.
How to figure out what you need to budget each month…
Step One: Download a copy of the “Where is My Money Going?” worksheet.
To make life easier, I’ve created a printable for you to download and fill in. Not only will it help you to see where your money is going, it’ll help you to easily work out what you need to budget each month too. You can do this without the printable but having a copy will make the exercise a whole lot quicker. Download your copy of the “Where is My Money Going?” worksheet by entering your details into the form below. When you’ve done that, move onto step two.
Step two: Gather your statements.
It’s time to take out those statements. Whether you receive paper statements or use online banking, it doesn’t matter. Gather at least six months’ worth of statements but preferably twelve so that you have a full year to look back on. Be sure to include statements for all the accounts you use – including your credit cards and any store cards you might have.
Step Three: Find out where your money is going.
It’s time to dive into those statements! This part of the exercise is going to feel a little long-winded but if you want to see where your money is going, it’s necessary. Set aside a couple of hours where you can concentrate undisturbed. You’re going to need to focus, so choose an evening when the kids are in bed or take yourself off somewhere quiet. Then:
- Starting with last month’s statement and armed with a few highlighters, start highlighting your transactions.
- Using a different colour for each category, highlight your grocery shopping, fuel and travel expenses, fixed monthly bills (utilities etc.), meals out/takeaways and anything else you want to track.
- Each time you see that category on your statement, highlight it in the relevant colour.
- Keep going until you have completed the entire statement.
- Repeat this exercise for every statement you’ve printed off.
Step Four: Add up your totals.
Using the “Where is My Money Going?” worksheet, it’s time to find out what you spend your money on. Tackling one month at a time, add up the totals for each category and add them to your worksheet. Keep going until you’ve filled in the columns for each statement you’ve printed off.
It can be a little shocking when you start seeing some of your totals but keep going. Don’t feel embarrassed or ashamed if it’s worse than you feared. Remember, what’s done is done. What matters is you’re taking the steps you need to start making a change for the better. So, keep going and when you’re done, move onto step five.
Step Five: Find out what you need to budget each month.
Focusing on one category at a time, add up the total amount spent over the last year and add it to the relevant column. When finished divide the total amount for each category by 12. This is what you’ve spent on average each month for the last twelve months for that category. For example:
- Say your total expenditure on groceries for the year was £6,000.
- £6,000 divided by 12 (months) is £500.
- Which means, over the last year you’ve spent on average £500 a month on groceries (around £125 a week).
Complete this worksheet and you’ll know what you’ve spent on average each month for each category over the last year. You’ll also know moving forward the maximum you need to budget each month. And, if you need to cut back, you’ll be able to see where you’ve been making unnecessary purchases.
Figuring out what you need to budget each month…
Congratulations – you’ve just figured out where your money is going and what you need to budget each month! And I bet it wasn’t as daunting as you thought? This is a HUGE step forward to gaining control of your finances, so give yourself a giant pat on the back – you’ve earned it!
Now you’ve done it, be sure to keep the momentum going. Look at your spending habits and see where you can start to spend less and save more. Check in on those statements monthly and repeat this exercise every six months. I cannot tell you how much this has helped us to keep a check on our finances. And it will help you do the same. You’ll be amazed at how easy it becomes to stay on top of your finances. Never again will you be afraid to look at those statements!
That’s it for this post! I hope it has helped…let me know in the comments!
Until next time…
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