2) Get a grip!

Before you can plan your road to financial freedom, you must get a grip on where your dollars are going.  What is really happening to your money?

Its just like counting calories. To really understand just how many calories were passing between my lips, I got an app and started to record it.  I was shocked at how many calories I actually consumed vs how many I thought I consumed.  

Its the same with your dollars. Tracking dollars isn’t fun, but it is necessary. It can be quite the reality slap to the face. Once you have done this consistently for a few months (even a few weeks is revealing) you begin to see how the money disappears. Track EVERYTHING! Every convenience store purchase, every tank of gas, each pair of shoes, every pizza.

Once you have seen where and how the money leaves, you can do a wiser job of spending.  You see where the biggest holes are, and begin to fix it.  From there you can develop a real plan for your money. Where and how your dollars are allocated. Then you can actually have a spending plan that everyone agrees and adheres to. Your whole family needs to be in agreement on this.

STOP: Before you try any of these fancy apps, the BEST WAY TO AVOID OVER-SPENDING IS TO GET RID OF YOUR DEBIT CARD!

but if you like apps:

Example: How much money goes to emergency/savings? How much to fun stuff?  Clothes?  Convenience store stops? Write it down. It’s important.

Only when you have a very clear idea of what is going where can you make a change.

Next step is create a spending plan that eliminates debt. Once everyone agrees to the plan, it makes it easier to keep to the plan. Getting a grip on where your dollars are going will allow you to get back in control of a very precious resource.

At least these cool apps on your phone make it easy to do. Or DOWNLOAD and print this easy form. But DO IT.

Easy Envelope Budget Aid (free, iTunes and Android)

Many financial experts advocate using envelopes or jars as visual aids to tame spending — EEBA lets you create a budget system using up to 20 virtual Envelopes for regular and irregular expenses. Then, you record your spending and the app keeps a running total. You can check your Envelope balance before spending, and there’s no need to connect your bank accounts or put your information at risk. The app can sync with multiple devices so all members of the household can work with a common budget.

Receipts ($1.99, iTunes)

For tracking expenses, this app makes it easy to manage all those receipts. Using the camera in your device, the app lets you take a picture of the receipt or bill and enter relevant details on the spot. Not only will it record the date and location of your transaction, it will add up expenses in different categories as well. Consider the app a digital archive of receipts that you can search, print, email and export to other programs.If you don’t have an Apple product, there are similar apps available for other devices as well — such as Smart Receipts Pro ($1.98, Android).

Note: Most families spend a LARGE portion of their budget on food. Discovering healthy and frugal ways to buy groceries, prepare meals, carry snacks or lunches may not seem like it belongs in a financial makeover plan. BUT consider that you may discover one the biggest expenses in your budget is FOOD, it makes sense to get that spending under control.


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