Taking control of your finances

Many of us struggle with our relationship with money. We can often wonder where all our money is going, or
feel like we just simply do not have enough money. Developing a solid plan for dealing with your finances will
bring you much peace of mind.
Do you have a good idea of where exactly it is that your money is going? Most people do not. If you do not
have a solid grasp on what exactly it is that you are spending money on, you will have a hard time making long
lasting changes in your expenditures. For the next month, keep a written record of every single time you spend
money on something, even minor purchases. Debit cards and credit cards can be very convenient, but they can
make it easy to lose track of where your money is being spent. Once you have been tracking your expenses for
several weeks, create a spreadsheet or chart with various categories like "food," "utilities," and
"entertainment." Figure out how much money you are spending monthly in each category. Although it may be
somewhat shocking to see this all laid out in black and white - chances are very good you are currently
spending more in some categories than you think you are - this is a necessary first step towards coming up
with a solid plan of action for managing your finances.
Once you have your spreadsheet with all your monthly expenses, you will need to break the categories down even
further. There are some expenses that you have that are non-negotiable, like the cost of your health insurance
or your rent. There is likely not very much you can do about the cost of these necessary expenses. But other
expenses will fall into another category, those expenditures which are optional. If you regularly buy new
clothes or get cable, these are expenses which are not truly necessary.
Once you have your "not truly necessary" category, identify those items which you could do without. If you try
to cut out all optional expenses, you may be likely to stick with this frugality for a little while, but will
likely "relapse," so to speak. But there are probably things that you can cut back on or eliminate entirely.
Are you paying for a gym membership that you don't use? Could you watch TV on your laptop and cancel your
cable bill? If you regularly eat out with your friends, what about just getting appetizers, or just getting
dessert? You may identify some areas that you can eliminate entirely.
In order to truly take charge of your finances, you will need to take a clear look at what your financial
situation is right now. What are you spending money on? What items are truly necessary, and what items could
you skip entirely? Taking such a close look at how you spend your money can feel scary sometimes, but it is
absolutely necessary if you want to change how you manage your money.