How to Avoid the Shock “What Happened to All of My Money” in 3 Simple Steps

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Most of us have been there. You get your paycheck. You pay your bills. You buy a few fast food meals a week. You buy your coffee every morning. You pick up that pair of shoes that were screaming your name when you walk by them at the store. You buy the kids a couple of trinkets. You buy your son a new pair of khakis because he’s ripped his third pair of uniform pants this school year.  Whew! You check your bank account and to your surprise, your account balance is much less than what you expected. What in the world happened to all the money you had when you received your paycheck?!?! Well, life happened. Bit by bit stuff comes up that chips away at your account balance, and with money being less tangible, it’s easy to miss the fact that you’re spending it. If this happens or has happened to you, you are far from being alone. This scenario is avoidable. It just requires a little diligence. 
Learn Where You’re Spending Your MoneyGrab a piece of paper. Fold the paper in thirds, then fold it in half and half again. You should have twelve boxes. You can also just draw lines to create 12 boxes on the page. Label each box using one of the following words: 

  1. Housing: Includes rent, mortgage, insurance, HOA fees, maintenance, repairs, etc
  2. Transportation: Includes loan/lease payments, gas, insurance, maintenance, repairs, bus pass, ride share fees, etc
  3. Medical: expenses and insurance—medical, dental, vision, disability, life
  4. Utilities: electric, gas, television, cell phone, water, waste, internet
  5. Grocery
  6. Eating Out
  7. Entertainment: travel, movies, hobbies, etc
  8. Childcare
  9. Clothing
  10. Credit card and other debt payments
  11. Savings
  12. Miscellaneous 

Now access your bank and credit card statements for the last month. Go through each transaction and assign it to a category. Once you’ve completed that step. Add up the transactions in each category. Highlight or circle  the totals. Take note of where your money is spent. Knowing where and how you spend your money is the first step to improving your money management habits. The intention of this exercise is to make your spending more “real.” With money being spent without ever seeing or touching it, it is so easy to lose track or never really know how you spend your money. By knowing how you spend your money now, you can be more cognizant of how you spend it in the future. 

Decide How You Would Like to Spend Your Money in the Future 

What are your goals? Where would you like to focus your resources in order to meet those goals? What will need to change in my spending in order to redirect resources to meet my goals? These are questions you will need to ask yourself. If you are not meeting your financial goals, changes in your spending habits are inevitable. That’s okay. Decide where you would like to begin your journey to financial wellness. Looking at your current spending habits, decide what changes are easy for you to make immediately. You do not necessarily have to make all of those changes at once, but make them at your pace. Some changes may require work on your end and time for you to build new habits, like making coffee at home before work instead of going to the coffee shop everyday. This is why it’s important to make changes at a pace you can handle in order to avoid becoming overwhelmed early in the process. Take your time so that you can be organized and purposeful about your changes. You can make changes at a pace that does not cause you stress. Make changes you can maintain. Build healthy financial habits along this journey. Build habits that are meaningful and that you can also teach your children. In deciding how you would like to spend your money in the future, a plan needs to be in place. This is called your budget. A budget serves as a roadmap to meeting your financial goals. Know what money you want or need to spend in each of the categories from the exercise above. Write down a budget for each pay period, month, quarter, and year. These serve as a reference. 

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Develop a System to Track Your Progress and Spending

With your current spending and financial goals in mind, develop a system to track your spending and progress. Are you a paper and pen-type person where writing down your spending and budget works for you? Or are you more of a digital person where you prefer to organize on apps and computer programs? Either method is fine. It’s a matter of personal preference. No matter the method, be sure that whoever spends money from your account has access to your tracking system. Choose a regular time to update your system. It could be at the end of each day, each morning, the end of the week, etc. During this time write down or note your spending over the chosen timeframe using the categories mentioned above. Compare it to your budget. Are you on track? As you compare your spending to your budget, you’ll know whether you’re on track or need to get back on track. Develop a realistic budget, track your spending compared to your budget, and adjust as necessary. You’re on the road to meeting your financial goals. 
Developing these habits take time and may involve some trial and error. Be patient with yourself and your partner as you all navigate these changes. The premise in all of this is to be more cognizant of how you spend your money. It is to be mindful before you swipe or click “checkout.” In so, you decrease your risk of “running out of money” accidentally. You know where your money is going because you’re thinking about each purchase. You’re thinking about how each purchase compares to your budget. You’re becoming a mindful consumer and smarter shopper. 

If you need help with developing budgets and plans to meet your financial goals, email JR at

With Love,

JR & Erica

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