Two Easy But Essential Steps to Take Control of YOUR Money

In today's economy it is very important that you control your money. There is a simple system to do this. It takes only two easy steps:

 A. Track your income

 B. Track your expenses

This is not difficult to do. Here are the steps:

1.  Get yourself a notebook that has pockets in the front cover.

2. Each day have everyone in your family unit put all their receipts in the front pocket. If the receipt doesn't say what the purchase was for, write it on the back.

3. On the first page of the notebook, list ALL of your monthly income.

4. On the next page, list all of your FIXED EXPENSES, such as mortgage/rent, car payment, health insurance, car insurance, homeowner's insurance. For any fixed expenses you have that are paid quarterly, semi-annually or annually, simply divide the total yearly expense by 12 and enter that as the monthly amount.

5. On the next few pages, list your VARIABLE EXPENSES by category, such as groceries, clothes, household expenses, eating out, school lunches, bus fare, etc. Allow a space of about half a page for each expense.

6. Sales tax can be entered as an expense. There's no need to split it up between the different categories on a receipt.

7.  Every day or so, sit down with the receipts and enter the amounts on the various pages under the appropriate category. If, for example, one receipt is for several different types of categories, write on the back of the receipt how much was for each category and enter these amount on the appropriate page.

8. If you have cash expenses for which there is no receipt, such as the neighbor boy cutting your grass, just remember to enter it in the notebook when you pay him. If your kids want a couple of bucks to go buy a Coke at the corner market, write that down, too.

You don't have to list each item separately. You can sub-total all of the grocery expenses for the receipts you are entering and put them on the appropriate page.

At the end of the month, make a chart with two columns. In the first column put the following headings: Income, then Fixed Expenses, Variable Expenses, etc. Under each Heading list the categories that are appropriate for that heading.

In the second column, called Amount Spent, list all the totals from each Category page. At the bottom of the chart, subtract the total Fixed/Variable Expenses from the total Income.

Now you will know whether you are spending less than your income and getting ahead or are spending more than your income and are getting behind.

More importantly, you will be able to see just where your income is coming from and where your money is going.

This gives you the critical, clear information you need to manage your cash flow and money. With this info in front of you, in hand, you will be empowered to then take control of your money.  You will have the info you need to steer your finances, begin to make them go where you want them to.