If you feel like your money is evaporating out of your bank account and you have no idea where it is going, you are not alone. Many people know on paper that they have enough money to pay for all of their expenses, but they nonetheless struggle to make ends meet each month. In order to determine where all of your extra money is going on a monthly basis, it is necessary to track your spending in some way. Then, you can make adjustments to your spending habits and financial behaviors to curb your spending where necessary.

Create Your Budget
As a first step, create a budget if you do not already have one. It should include line items for all expenses that you spend money on. This includes everything from your mortgage or rent payment to food, clothing, medical expenses and utilities. Some expenses will be fixed, and others will vary from month to month. This means that you may need to adjust your budget from month to month to ensure that you do not have a shortfall. For example, in August when you buy the kids’ back-to-school clothes, your clothes expense may be very high. In September and October, however, you may have minimal expense for clothing in your budget. This is just one of many examples of expense categories that may be much higher one month than the next.

Track Your Expenses
Then, track your expenses each month by keeping your receipts. Each evening or week, depending on your preference and time availability, update your budget with your expenses. Monitor each expense category as the month progresses to determine how closely you are staying to your budget. Based on your realistic spending, you may need to adjust your spending in some categories the following month, or you may need to adjust your budget. Because expenses can vary from month to month, you may consider following this step each month going forward, using your budget as a helpful tool to guide your spending decisions.

Use Cash for Extras
Another helpful idea is to use cash for extra expenses. For example, you may take $200 out of the bank at the beginning of each month. This may be the only money you have allocated for movies, going out to eat, buying coffee and more for the month. Once this money is spent, you will know that you cannot spend any additional money that is not budgeted for until the first of the following month. If you find that you are falling short of cash regularly this way, you may need to increase your extra spending budget or decrease your spending habits.

Budgeting and managing expenses is rarely simple and easy to do, and many people are challenged by this task. However, there are a few steps that you can take to improve your spending habits as well as your financial management and budgeting efforts. You can put these helpful tips into action soon, and you may find that you can rein your spending under control.