By Denise Downey

Where Does Your Money Go?

Your work hard for your money. But does your money work hard for you? The topic of budgeting comes up in many of my client conversations. However, I rarely hear “I need help with my budget.” Instead, I hear questions like:

  • Am I on track for retirement?
  • Can I afford this house?
  • How can I stop living paycheck to paycheck?

A budget is the core component to the answer to any of these questions.

Many people equate budgeting with reducing expenses. Not necessarily. Budgeting involves learning your own behavior and then correcting course when necessary.

Eww, Budgets!

A budget shows where your money is going. But most people don’t like to deal with them.


Because it is tedious, boring, and sometimes painful.

Since it’s the foundation for providing good financial advice, generating a budget document one of the first things I do with new clients.

If you’re trying to do this for yourself, here are a few tips.

  1. Dedicate yourself to the project. Block off a few hours. I know, time is precious. But this will be worth it.
  2. Download the last 3 months of credit card statements, bank statements, and pay stubs.
  3. Create a simple spreadsheet with some general categories (i.e. Housing, Bills/Utilities, Debt Payments, Savings, Medical, Health/Fitness, Entertainment, Dining Out, Groceries, etc…). Excel and Google Sheets both offer nice templates to get you started (the pic above is from Google Sheets). The more detailed you get, the better the results, but the more tedious this project will be.
  4. Categorize every expense from your credit card / bank. No excuses… It’s okay if one of the months you chose was not usual–life happens.

Evaluating Your Budget

Now that you have your data, what do you do with it?

Scan the data and ask yourself these questions:

  • What is surprising?
  • Does your spending match your values? For example, if you value healthy eating habits and a lot of money is going towards dining out, there’s a disconnect. If you want to retire early, are you prioritizing retirement savings?
  • Where can you make some small changes? (i.e. canceling subscriptions)
  • Are large changes possible, if needed? (i.e. selling a car, changing jobs, relocating)

This may sound like an easy task but many people find this is the hardest part of budgeting. It’s difficult to confront hard evidence of bad habits. Some people fear that a budgeting session will spiral into a fight with their spouse. Once you evaluate your budget, you will learn quickly how much emotion a tiny spreadsheet can generate.

Keep Calm and Carry On

Try to generate your budget and evaluate yourself and see how it goes. Given that it can be a difficult and emotional journey, don’t feel bad asking for help. The biggest impediments to getting a budget under control are not financial, but psychological. If you’d like help working through budget generation and evaluation, please reach out. I’m happy to help.

The most important thing to achieve in this exercise is an understanding of whether your financial decisions are shaping the future that you want for yourself. It’s worth the effort.