For most people, financial health doesn’t depend on how much they earn, but how much they spend. To help you find out where your money is going, the next three steps involve tracking expenses.
You will start with identifying variable expenses. Variable expenses are those that vary from month to month, such as clothing and food. You have the most amount of control over these types of expenses.
To help you identify your variable expenses, print and carry this Record of Daily Expenditures. Carry this form (or a simple notebook) with you and record every penny you spend — even if it’s only a soft drink from the convenience store, or a trip to the drive-thru at a fast food restaurant.
While tracking variable expenses is only one of the 30 steps, you are encouraged to continue tracking expenses well beyond the time it takes to complete the 30-step plan. The longer you track expenses, the better your chances of success.
To better understand where your money is going, read this advice from the Frugal Homemaker.