Personal finance

Where Did The Money Go?

The question ‘where did all the money go?’ suggests a life devoid of a budget. The opposition to a budget is understandable because a lot of people don’t want too many boundaries in their lives. Some people just want to roam free and have their cash follow them where they go.

However, it is impossible to be financially healthy without making some compromises with your funds. With a budget at hand, you can create the discipline required for attaining financial well-being. In other words, to know where your income goes, you have to control the direction it should go. If you do this regularly, whenever you evaluate your financial portfolio, your money will be exactly where you want it to be.

Where is your money now?

You can’t fix a problem if you don’t know what it is. You cannot change your financial status if you don’t know what your income is doing right now. If you know your financial status, you can influence your finances with data. You will use the knowledge of what is happening, based on current figures from an audit. Armed with this knowledge, you can understand your problem, know what to do to fix it, know why you need to do it, and where to start. You can start with a balance sheet. This age-old bookkeeping secret can help you start the journey to building financial wealth. Moreso, it can keep your credit score precisely where you want it to be.

A balance sheet measures what you earn against what you are spending each month. A 30-day calendar is advisable for the timeline on your balance sheet. This duration is recommended because it is a famous cycle for most people who earn an income. It also provides a broader time frame to monitor financial habits and identify patterns where plans may have worked or failed.

The author of the book The Richest Man in Babylon described illustrated the benefits of a balance sheet through the story of a slave’s financial situation. The story was about a slave sinking in debt so deep, who exiled himself from his homeland in order to escape his creditors. He received counsel from a stranger on creating a pictorial view of his financial situation through a balance sheet. Then, fragmenting the earnings into manageable payment goals until the debt was paid off.

So, the slave took to counsel and divided his cash into ten manageable budget categories. He monitored his debts closely and serviced them regularly until they were paid off. By the time the slave was debt-free, he had indirectly imbibed a culture of choosing where his money goes through a balance sheet. He continued with this practice and soon became the richest man in Babylon. The moral of the story is to keep it real and consistent with your funds.

Where should your money be?

There are a lot of things in your household depending on your finances. Of course, you already know this. What you don’t know is that, to understand the impact of this competition on your finances, you need to “meet” the competitors … on paper through a spreadsheet. In this case, the spreadsheet resembles a manifesto that declares why your income should be spent where it is being spent. You can create your own financial manifesto by using Microsoft Excel. Make a spreadsheet of your monthly expenses. Next, list the items demanding your funds in an order of critical expenses. Start your list with the most critical items that you cannot do without. After this, group your expenses into categories. For instance:

  • Tax — This is what you spend on federal, state, and local taxes of any kind.
  • Household maintenance — This is what you spend on cleaning aids, beauty supplies, food, clothes, and any domestic assistant on your payroll. This could be a gardener, nanny, or plumber.
  • Utilities — This is any fee or levy you pay for car parking, insurance, concert tickets, journal subscriptions, transportation expenses, etc.

Health care — This refers to medical insurance payments and any out-of-pocket hospital expenses you make. Examples include replacing your eyeglasses, fulfilling your dental appointments, or replacing your multivitamin supplements from the local pharmacy.

Creating a budget.

This is the outline for things that need your money. It also contains the amount you have planned to spend. This skeletal picture of your financial responsibilities should reference the spreadsheet or balance sheet you have created. Use your total monthly income as a guide for how much each item should cost you. This is the fun part of a budget because it’s your chance to rearrange your financial credit by choosing how much money each item on your list should get. You can cross-check your past spending with your new budget figures to help you organize funds better.

The amount you state in your budget is not finite. Keep this in mind as you jot down figures. You should think of your budget as a wish list for your funds, not a death sentence for your income. In the beginning, you may struggle with following through on the amount you’ve put in each column for spending. You would likely experience the occasional temptation to go a little overboard with your money. When you do, do not crucify yourself. Forgive yourself and move on with the rest of your budget.

Track your spending behavior.

Not everyone is not a finance guru. Even if you are, it is wise to get a third party to monitor your budget. There are so many budget applications for various digital devices. They can help you track where your money goes. They can prevent your money from going where it shouldn’t go, by using the spending rules in your budget. A number of them can link to your bank account to manage your financial life as a whole. Also, there are applications that handle financial errands such as standing orders and investments. This technique of using a budget application can help to keep you free from unwarranted debt. It is advisable to use only digital applications with verified cybersecurity and data privacy laws.

The most popular budget applications for financial planning are listed below. The list is not exhaustive, and a simple Google search will extend it in less than a second. You can test a number of them until you settle with the one that speaks to your own situation.

  1. Money — Budget & Finance
  2. Pocket Guard
  3. Mint
  4. Nerd Wallet
  5. Personal Capital
  6. YNAB (You Need A Budget)
  7. Every Dollar
  8. Good Budget
  9. Clarity Money
  10. Fudget
  11. Mvelope
  12. Money Manager
  13. Spendee Budget
  14. Mobills
  15. Bankin’
  16. Spending Tracker
  17. Money Lover
  18. Money Tracker
  19. Fast Budget
  20. Budget App
  21. Wallet — Daily Budget & Profit
  22. Buddy
  23. Money Pro.

There is also Daily Budget Original, CoPilot, and Simplifi for iPhone users only. Zeta, HoneyDue, and HoneyFi focus on budgeting with your significant other.

Reflecting on your money.

It is not enough to know your financial status. You should update it regularly. In addition, you need to periodically visit your money budget and your spending activities, to ensure that you are growing financial wealth in the way that you have planned.

This part can be called “money meditation”. It is a critical way of caring for your financial health. You can set a reminder on your calendar for budget performance audits. They can be scheduled every 3 months, 6 months, or yearly. Whatever timeline works for you will do just fine, but remember that, it is the discipline to check on your budget that matters most in giving you value for your money.

In essence, during your budget audit, you will learn how well or how badly your money spending plan has gone. Eventually, you should be able to answer the question: where does all the money go?


Oleksandr graduated from Dnipro National University of railway transport in Ukraine. At first, he was a customer success manager at PocketGuard and in 1.5 years has been promoted to product manager....

Back to the list of blog posts Go to PocketGuard