Do you know how much money you have left over every month? $100? $1,000? Do you go negative? The answer to this question is extremely important as it tells you what you can, and cannot do. Even if you WANT to do something else.
The hard truth is that you’re not going to get out of debt or save $XXXX amount of dollars if you don’t have a surplus at the end of every month. It took me yearrrrrrrs to realize this, but I’m so freakin’ glad I did. And it’s not like I didn’t already KNOW you had to do that or anything, I just didn’t really pay attention.
Up until 2 years ago all I did was tread water and do whatever I wanted. Which was fine for someone who didn’t really care much about their future finances, but once that someone realized he DID care about it some changes needed to be made ;) And as boring/repetitive as it sounds, the only way I got a handle on it all was to start tracking my money to find out what was going on.
You see, we always THINK we know how to manage our money and that we’re not “one of those” crazy people, but a lot of us are because we don’t really KNOW what we’ve got coming in and going out. If you track it though, you can prove to yourself that you are on the right path and that you’ve got it on lock. But if you’re like the old me and say everything’s fine without being able to prove it to yourself, I’m gonna have to doubt you ;)
Tracking allows you to see that hard number at the end – that extra cash flow you’re bringing in every month. And once you know what it is, you can then plan to pay off debt or save X amount of money or whatever else you want so much easier. Because then it will be TRUE – not just a number that you *think* you have left over.
PS: Feel free to steal my budget, or any others I’ve collected over the years… all you need is something to help get you started!
PPS: That painting up there? I made that… with the surplus in my “hobby” budget ;)
PS: Some of my favorite tools:
|Personal Capital (FREE) -- If you’re looking for a robust financial tracker, Personal Capital is the way to go! They’re like Mint, but on steroids and have much better tools for investment and net worth tracking. // Full review|
|Digit (FREE) -- A super easy (and automated) way to save. Every day Digit analyzes your income and expenses and will push money aside for you any time it sees extra sitting there. I've saved over $4,000 myself using them so far! // Full review|
|Acorns -- Having trouble finding money to invest? Check out Acorns – they round up all your transactions to the nearest $1.00 and drops the difference into an investment portfolio for you. Easy way to start investing! // Full review|