Runaway Checkbook

 

Where Has My Money Gone?

 

You need to determine where you have spent your money.  Get all the data you collected under "How to Get Started".

 

Take each bank statement and write a "category" of expense by each check, debit or withdrawal.  A list of categories can be obtained from the spreadsheet you can download (Spending Analysis Spreadsheet).  It is important to keep the list of categories short.  There is one category called "Cash" that should be used for most, if not all, discretionary spending.  I define discretionary spending as all spending that is done away from the house (this includes online shopping).  Typically, your "fixed" bills are paid from your home or office. 

 

After you have assigned a category to every check, debit, and withdrawal, then total all the expenses in each category by month.  For example, add up all the expenses in January for a given category and write the total for that category on the spreadsheet under the column you name "January".  Repeat this for each category and for each month.

 

Now, total the columns for each month on the spreadsheet.  The total should match the total checks/withdrawals on that month's bank statement.  Then, total each row (ie. each category) on the spreadsheet and put the total in the column on the far right.

 

Finally, review the total expenses by category to see where all your money has gone.  Prepare yourself for a shock!   Now, compare your total income for that year to your total expenses.  Don't be surprised if your income is less than your expenses.