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Where did all my money go???

We've all been there. It's the end of the month again, and we're frantically checking our bank account, trying to decide if we have enough money left to fill up the gas tank.  We know we got paid this month and even made great money, but where did all our money go???  

Where did all my money go???

This is the age-old question.  This is exactly why the majority of people will NEVER break free of the cycle.  They will always live paycheck to paycheck asking, “Where did my money go?”  
If you want to break the cycle, you have to change the question.  The question you should be asking starts before you get your paycheck, not after it is spent.  
That question is “Where do I WANT my money to go?”  
Once I started asking that question, I stopped asking “Where did my money go?”, because I knew where it was going before it disappeared!
So how do you make that transition?

Well, there's this dreaded “B” word.  
For many people that “evil” word has come to represent all the bad things in life that we don't want.
Ramen Noodles for lunch.  Peanut butter and jelly for supper.  Clipping coupons for hours.  Working long hard hours every day just to keep your head above water.  Depriving yourself of every pleasure in life to save a buck.
That word, of course, is Budget.

It should not be like this.

Budgeting should be a time of dreaming, and determining how you can achieve your dreams.

For that reason, I like to change the name of this, and call it my spending plan.  I intentionally sit down at the beginning of each month and make a plan for where I want my money to go. 

Start dreaming on paper all the things you want to do.

  • I want a trip to the beach – savings.
  • I want out of debt – debt snowball payments.
  • I want an African safari trip – savings.
  • I do not want to be homeless – living expenses.  
  • I want to help others – charity.
  • I do not want to be a burden when I'm old – retirement.

Write down your income as well.

Once you've written down your income and expenses, now you've got some decisions to make. 

Maybe after all your dreaming, you've found out that your expenses are triple your income! 

No wonder you're asking where all your money went at the end of the month!!!

How can you make it work and keep your dreams alive?

Maybe you could cut back on eating out this month. 

Do you really need that brand new SUV to get to work?  Or would a nice paid off used car work?

Maybe your house, utilities, repairs, and insurance takes up half your salary.  Wow, is it really worth it when you have to sacrifice the other dreams you have on your bucket list?  Maybe it is time to downsize.

If you really can't justify cutting some of this, how can you go about getting more income?  

All of these questions come out during the planning phase.  The best news is you haven't spent anything yet!  You can think these things through in advance and make a conscious decision about what your true priorities are.

Make those decisions, follow through with the plan, and next time the end of the month rolls around you won't be asking the question “Where did my money go?”.  You'll already know where your money went.  It went right where you intended for it to go!  Then it will be time to dream again for next month. 

One caution, don't make the mistake of going too far out with your planning at first, a month is enough.  In the beginning, you will have a lot of unexpected expenses pop up and have to rework things regularly.  That's normal, don't get frustrated.  No one learned to walk without falling down a few times.  Go back to the drawing board and make adjustments based on the new information.  Eventually you'll be able to work in some longer term stuff like saving for Christmas, college, trips, and other dreams, but in the beginning follow the K.I.S.S. principle.  Keep it Simple Stupid!!!

When mommy asks where all your money went, do you want to scratch your head and shrug your shoulders?  Or do you want to say “It's going exactly where I wanted it to go!”?

Planning where your money goes is only one of the core steps along the way to building wealth.  If you want to find out about the rest of those steps, here is a follow up article I wrote on this subject.
Hope you enjoy!
Don Smith

Don Smith is a business advisor and the founder of The Personal Growth Channel. Happily married with five children, he lives in Springfield, Illinois.

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