When you’re trying to figure out where your money’s going one way of doing that is to create a budget. Truthfully, though, setting a budget is only one piece of the puzzle.

One of the problems with a budget is that if you have money left over you tend to spend it indiscriminately, and suddenly you’re not only wondering where your money went but you’re looking at your budget and worried that you don’t have the money you thought you had to pay all your bills.

It’s easy to get into trouble. Whereas I’m not one of those people who will tell you that you need to stop spending $3 for a cup of coffee when you’re on a budget, I am one of those people who will tell you that if you’re someone who buys multiple cups of coffee daily, or even one a week, that all those purchases will add up. And if you suddenly get to Thursday and you don’t have enough money for lunch for the next two days, or gas money, because you pumped it into 10 cups of coffee, you have no one to blame but yourself.

What to do? If you have the stomach for it you need to try to track your spending. See it as a project for a week or two. Carry a little booklet with you and every single purchase you make, whether it’s a penny, a dollar or more, write it down in the book. Then after that week or two take a look back and your purchases, add everything up, and see how you’ve been spending your money.

One of two things will happen. One, you’ll be so conscious of spending money that you now have to track that you’ll actually be pretty good, and that will prove that you can control your spending. Or two, you’ll look back and scare yourself when you add everything up and see just how you’ve been spending your money and how much you spend without thinking about it.

This can be scary, but it’s an essential thing to do if you’re looking to get a handle on your finances. Give it a shot; either way, you’ll be amazed at what you’ll discover about yourself.

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