We all know someone who is always “too broke to pay attention” a week before the paycheck comes out. And sometime, we find ourselves in the same situation.

The solution here is to learn to control all of the money that comes in and out of our lives in such a way that we will always have what we need, and not necessarily what we want.

An easy way to start tracking is with a notebook and a pen or pencil.

Write down the month at the top of the page and then draw three columns or divisions.

Column one is ITEMS, for example, the paycheck, the monthly bills such as rent, car payment, electric, home heating/cooling, any of your expenses.

Column two is for IN items of income, like a paycheck, payments for doing extra chores, birthday money, etc.
Column three is for anything going OUT – like the bills.

Don’t feel guilty about spending money you earn for whatever you want, at least for now.

I put the income at the top of the page and then the OUT goes on the lines below and is subtracted as I spend the money for things like rent, car payment, phone, electric services, heating/cooling bills, etc.

You might be surprised at the amounts you spend on a daily basis without realizing it. The gas for the car is a given, but that soda, candy bar, coffee or donuts you bought were extras. At any rate, write everything down.

As you go through your day, make note of every single penny you spend.

At the end of each day, take that page out of the notebook and put it in a jar on your desk or dresser. At the end of the week, clip or staple the slips together and mark them WEEK.

At the end of the month, add up your ‘necessary/needed’ expenses such as rent, gas, lights, food, and as an aside, add up the value of all those little extra things such as the coffee, donuts, sodas, lunches etc.

Continue this practice for a at least a full month – six months is better, and an entire year will give you the best overview.
If you are like most people, you will find that the amount of money spent on unnecessary items you don’t really need (but want) such as clothing you never wore but bought anyway because is was ‘on sale’ and seemed like a great deal might not have been after all.

Some people might have found they could have made a couple of extra car payments or paid a couple of doctor bills, or the money could have been added to a savings account for something truly needed.

One young lady decided to forgo the $5 flavored coffee at work every day and instead put a $5 bill in a jar in her closet. Within a years’ time, she saved enough to do something she wanted to do for years, which was to take a nice vacation. She said the best part was that it was paid for ahead of time, with NO BALANCE on her credit cards.

Tracking sheets can be a valuable tool to help you to achieve financial stability.

Learning to live within your means or even a bit below is the best insurance families can have in these uncertain times.