Is Your Money Going Where it Should Be?


Have you ever made it halfway to your next payday and find yourself stuck trying to figure out where in the world your check went?  I have been there, done that!  It is definitely not a good feeling.  Even though, arguably, it does gives you some great skills of turning $50 into gas and food for a whole week.  It can become so easy to celebrate these small victories of skimming by, but there is a solution to help put your finances into better perspective.   As simple as it sounds, you can adapt the habit of setting up a budget.  


First, a budget is an estimate of your income and expenses for any particular time period.  I like to look at it as a quick snap shot of where your hard earned money is going from week to week.  There are several benefits of maintaining a budget and regularly reviewing that snapshot.

  • Gives you control over your money
  • Increases the awareness of your spending
  • Helps track progress towards goals
  • Helps eliminates debt
  • Helps build savings


My favorite budgeting method is the Zero Based Budget.  This is a method of budgeting that accounts for every dollar you spend.  I was first attracted to the idea of budgeting just to gain control over my finances.  What I learned when I started budgeting was how much unnecessary spending  I did.  Seeing how much I spent on food or materialistic items was really eye opening and helped me embrace the structure of the budget to become more disciplined.  Becoming more disciplined starts you on the journey of being able to do things with intention and awareness vs doing things out of impulse.


1- Track your spending. Initially you are most likely unaware of where every dollars goes. You may pay all your bills and then use the remaining funds without much thought until there is no more. So the first step is to understand your monthly spending habits. Write out each debt and expense that you ration money out to each month. These will include loans, credit cards, mortgage/rent, utilities, insurance, food, hair appointments, subscriptions, entertainment, childcare, miscellaneous items, everything. Even charities and tithes need to be included. Don’t leave anything out. At the end of the exercise you should know how much you spend on average each week for food, household items, pet expenses, alcohol, etc.

2- Set a goal. Once you have an overview of your spending habits, it’s important to take notice of a couple of things. Do you have money leftover at the end of the month? Did you save? Are you happy with the way you are spending your money? If you are happy, you can keep that track sheet as an overview or guide, and continue in the same direction.

If you are anything like me, once you have seen it on paper (or on your budgeting app) you will want to find ways to improve. So what are your goals?

Are you trying to eliminate debt?

Are you interested in increasing your savings account balance?

Are you saving for a down payment or for a vacation?

All of these are great reasons to analyze your spending. So at this time, it will be perfect to see what you can cut back on. Do you have subscriptions that are not as important anymore? Can you cook more vs eating out? Are you spending too much on alcohol? Are there any services (cable, insurance, phone, etc.) that you can call and get for cheaper through a different provider, or by switching to less expensive plans? Once you take the time to answer questions like these, you can restructure your finances and control how you spend your paychecks.

3- Set up a zero based budget. I do this per paycheck. I take each paycheck all the way to zero and assign each dollar a task. For instance if you receive a $900 paycheck bi-weekly, it may look like this.

Check 1
Student loans –$50
Car Insurance –$78.60
Cable– $75.47
Cell– $115.33
Car Payment — $ 200.10
Food week 1– $75
Food week 2– $75
Gas week 1– $20
Gas week 2 — $20
Mics- $40
Savings– $150.50
TOTAL -$900

Check 2
Rent– $550
Credit Card–$35
Food week 1–$75
Food week 2–$75
Gas week 1–$20
Gas week 2–$20

TOTAL –$900

Notice that on check one there is $150.50 allocated to savings. That is awesome! You can do one of two things with extra money: 1) you can save it and treat yourself later, or 2) you can take that money and use it to pay off debts faster by paying over the minimum payment required on a credit card or loan payment. Also, note the misc $40 that can be for any miscalculation on a bill, unexpected expense, or a buffer to make sure you do not overdraft on your account.

4 Stick to the plan. Remember what goals led you to set the budget you have, and try your best to stick to it. It is important to reevaluate if you are continually overspending. Maybe your food spending is too low for your lifestyle, or maybe your utility usage is higher than expected. So regular reevaluation is necessary, and encouraged to make appropriate adjustments as life changes.


Transparent moment: I am very old school and really like the pen to paper tracking of my spending. But this day and age, it is so easy to have an app that can do your tracking for you, and give you the same awareness and control. The most popular ones I have come across have been Mint, and YNAB. YNAB is one that assigned each dollar a task as I have discussed in this post.

You’re invited to comment on your experiences with this budgeting method and what you like or dislike about it. If you found this information helpful or know someone who will, please don’t hesitate to share. Also, subscribe for future updates. Thanks for the read.

4 thoughts on “Is Your Money Going Where it Should Be?

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