After struggling for several months with no money left right after paycheck, we decided that it should stop and all spending should be under control. It was the end of December - I just completed my college exam and was sent for two weeks break on my part time job. My spouse was still working, so I decided to end the question I had in my head for quiet some time - WHERE IS THE MONEY?

I printed out all bank and credit cards transactions for the last three months. Having two bank accounts and three credit cards, I quickly realized I need something to aggregate all our data.

Being straightforward, I opened a spreadsheet software and entered all transactions from all statements into one sheet,so I can easily summarize and group data (aggregate would be a nice word to use). I spent a big chunk of day doing it, but I wanted to know so badly where is MY MONEY, so I decided to complete any way. Of course, I tried to download bank statements in a spreadsheet format, so I don't actually enter everything manually, still you have to open put together and sort data for few months, so it takes time anyway.

Recording our income transactions, I did see myself that we earn in fact more than we think we do. When you look at your biweekly paycheck, it is not seen right away (especially if the paycheck of your hard earned money is just small comparing to all expenses and bill you have to pay!)

This brings the first point to our goal of saving money - YOU HAVE TO START GATHERING YOUR DATA TO ANALYZE IT!

Categorize Your Data

After I put together all items from all bank statements, I was able to label some of them (rent, groceries, cable, phone, cell phone, gas), but some transactions were not so explanatory like WalMart or Cash Withdrawal.

It was a some shock for me to learn that cash withdrawals were about 30% of our income! Nobody knows where this money is spent. It is known for sure, that any pile of cash simply gets smaller and disapears quite quickly. Because we store all receipt in our big receipt box, I was able to figure out more expenses.

More of less, I completed and got the categorized picture of our spendings. Again, cahs withdrawal were shocking enough.

The second point in our goal of saving money - YOU HAVE TO CATEGORIZE YOUR EXPENSES RIGHT ON SPOT, BECAUSE IT'S HARD TO REMEMBER AFTER!

As additional tip to save money - TRY TO TAKE OUT CASH AS LESS AS POSSIBLE! Cash is uncontrollable substance tending to simply disapear without any evidence where it goes!


So far I got three simple items that helped me reduce our expenses by 10% already in January:

• Gather and review your data

Look and look again at your expenses and financial statements. Your brain will start thinking by itself how to reduce your expenses. As a side effect, look at your monthly family earnings - see how much exactly you really earn as a family for a month! This will encourage you to respect yourself more. It will also help your thinking into expense reduction much easier!

• Properly categorize your data and look again into categories!

Ask yourself: how do I end up spending $500 per person per month on food! There is so much food you buy for this money, but you do not remember eating it! Or maybe it is good idea to buy a monthly pass instead of buying ticket every day on your daily bus or train? You will see or your brain will tell in a few days!

• Reduce uncontrolled money transfers like CASH! It's like water in your hands!

Get Personal Finance Management Software

Free or paid, it is important to use specialized software to record your expenses and income. It should be designed to help you record transactions fast and easy or it should be able to import your bank and credit card statement files.

Although you can try to use generic spreadsheet software, you will realize soon you spending more time on working with your financial records! So you remember this exercise as a pain and soon will start avoiding it. The fun part is to watch your data, but boring part to enter it. Get software that you manage your finances, not your finances manage you!

Use a free trials for different software to help you decide before buying and get comfortable with using it! Some software allows easily switch between free and paid version, so you have freedom to decide! REMEMBER TO KEEP RECORDING AND ANALYZE YOUR DATA NO MATTER WHAT!