The first step in making any change is raising awareness. If I don’t know what the problem is, I can’t do anything about it. That’s where a lot of people, including myself, get stuck. We find ourselves in a situation we don’t know how to handle, let alone how to get out of, and feel helpless because we don’t even know how we got there. We get overwhelmed and throw up our hands, believing there’s nothing that can be done. This is toxic thinking. The story I tell myself is what will manifest in my life.

To become aware, you have to be willing to look at all the facts without judgment. This is important. It’s not about right or wrong, it just is, and if you criticize the facts instead of looking at them objectively, you will stop there. It’s like looking at yourself naked in the mirror. If you focus only on the flaws, you’ll get discouraged. I made this mistake many times, beating myself up for creating the mess in the first place and telling myself all the things I “should have” done. But you can’t go back and change the past. You can only learn from it.

I found it helpful to write everything down. As amazing as our brains are, if I let things sit up there, they tend to get distorted and it’s easier to overlook important facts or even to justify and dismiss. When I see something in black and white in my own handwriting, it becomes real and something I am more likely to pay attention to, and less likely to forget about. When you take the time to write something down, you will generally remember it better than something you think about or say out loud. This also works well for to-do lists.

Plan It Out

Start by writing down how much you think you spend each month on different things. Make a list of categories you typically spend money on. You can use categories such as

• Housing
• Utilities
• Phone Service
• Internet Service
• Cable or Streaming Services
• Groceries
• Dining Out
• Auto Expenses
• Medical Expenses
• Clothing
• Hygiene
• Household Expenses (things like cleaning products, furnishings, appliances, etc.)
• Debt
• Subscriptions
• Personal Spending

These are just suggestions, base it on your own needs and spending habits. You can adjust them as you go.

Track

Keep a running tab of everything you spend money on and don’t skip anything. It may help to keep receipts for everything and add it to your list at the end of the day. (Don’t throw away the receipts yet, more on this later) You can carry a list with you if you want, but this requires you to remember to take it with you and also has a risk factor of losing it somewhere. You might find it helpful to keep a list on your phone, or if you’re a nerd like me, a spreadsheet.

Categorize

Add each expense to the category it falls under. You can choose to do this weekly or monthly, but I find it easier to do it as I go. It’s less work in one session and I’m less likely to do it if I wait for the list or receipts to pile up. You can use your bank statement or online access for real time tracking but if you spend cash on something, you might miss adding the expense if you don’t use receipts or track it right away.

Total

At the end of the month, total all your categories and compare how much you thought you spend to how much you are actually spending on each one. Remember, we are not judging or criticizing, simply raising awareness of our current spending. When you look at the totals, does anything surprise you? Is there something you spend more or less on than you thought?

Think Bigger

To get a bigger picture of your spending, figure out how much you spend in 1 year. Multiply the total for each category by 12. Just being aware of how much you are spending in a category, or even a specific item, can be enough to raise your awareness enough to make more conscious decisions when you buy something.

Taking the time to track all your expenses not only makes you more aware of where your money is going, it will help you get a general idea of how you need to plan your budget for future months. Some things in your expenses will remain consistent and others will vary from month to month. There will likely be some expenses that may be required less often and for these, continuing to track will help you determine how much you need to set aside each month for them. For example, I don’t necessarily need to buy certain hygiene items on a monthly basis but having awareness of how much they cost vs. how often I need them helps me set aside enough so that when I do, the money is available.

• Recommend reading: Your Money or Your Life – Vicki Robin and Joe Dominguez