Happy Valentine’s Day Everyone!!! I hope everyone has a great weekend, but it’s also an opportune time to take a hard look at your expenses. I’ll be honest - this may feel a little similar to Step 3 in this mini-series. However, it differs because this will show the source of your accumulated debt from Step 3. It’s almost like gazing into a crystal ball. If your expenses exceed your net income, debt is accumulated. Debt builds up, stress increases, and money trouble has begun.
Re-gather your most current bank and credit card statements for the past year, at minimum a few months if there have been no out-of-the-norm one time items. These statements will be used to create a list of expenses based on what you normally spend each month. Some accounts have a nice feature that funnel charges into a pie-chart automatically so be sure to check! The downside to only using a few months worth of statements is that this can cause you to forget annual, semi-annual or quarterly expenses such as home/car insurance, medical/dental procedures, property taxes, birthdays, vacation, municipal fees, or even back-to-school clothes, etc.
This is just a starting point. You will likely see that you are surprised by how much you spend in some areas like groceries and restaurants. Again be realistic and honest. Write-down exactly what you normally spend. It is critical to review your expenses to find areas where you can cut costs (bloat).