Create a chart of all your expense categories: mortgage, car, groceries, dining out, entertainment, child care, insurance, medical, etc. Include categories you might be neglecting, like vacations, clothing, personal care.
You can do this either by hand or on the computer, using programs like mint.com.
Record every expenditure, down to the penny, putting them in their respective categories. At the same time, record incoming cash, and where it’s from.
Ask yourself these questions:
- How did you feel doing this exercise?
- Did you notice any resistance to doing this?
- Did you discover anything you didn’t expect?
- Did you make any changes? What are they?
- Do you see where you can make cuts to your spending?