Money Management – How to Identify Your Expenses

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What Are Your Expenses?

We’re now going to go through the fundamentals that we talked about as they relate to managing your money. And that first fundamental or pillar of easy money management is to understand your expenses.

Make a List

The first step in determining what your expenses are, is to just sit down at the kitchen table with a piece of paper and a pencil and to make a list of your expenses. Brainstorm all of the ways that your money goes out of your accounts and out of your pocket every single day.

Think about what you spend each day, week, month and even what your quarterly expenses are. For example, you may have quarterly expenses like a homeowner’s association or quarterly taxes.

Estimate Your Expenses

The second step is to go ahead and look at that list and write down an estimate. What do you think you spend for each category? You don’t have to go digging through old statements; just take a good guess and move on to the next step.

Prioritize That List

The third thing you want to do when you’re looking at your list of expenses is to prioritize the expenses in terms of wants and needs. For example, your rent may be a need, but if you spend a hundred dollars a month on socks that may be a want.

Track It for a Month

The next step is to track your expenses for a month. Write down what you spend. Keep your receipts, keep a journal, and use a mobile app or some sort of simple system to track how much you spend.

Assess Your List of Expenses

Now go back to your list and your estimated expenses and start writing down the actual amount of money that you spent. This evaluation will give you the information that you need to create systems to manage your money quickly and easily. However, before we can talk about systems, we have to talk about the other side of the financial coin – your income.

Did you find this brief teaching helpful? We are going to be talking about money management on the FB profile as well. CLICK HERE to connect with me on Facebook. Lastly, grab the freebie while you can. It will not be available too much longer, where you can learn about generating passive income , income that can be generated month after month after month. 

Chat with you soon as the revealing of an upcoming wealth course will be disclosed on social media.