“Track your spending,” says Gail Cunningham, spokeswoman at the National Foundation for Credit Counseling. “It’s a basic building block of financial success, but so many people don’t do it.”
Many diet programs encourage participants to keep a “food diary” where they write down everything they eat on a daily basis. The idea is that recording every single bite — even the rest of your kid’s mac-and-cheese or a slice of your co-worker’s birthday cake — makes you mindful of how much you’re ingesting and prevents mindless eating.
With your finances, the idea works in reverse but the principle is the same: Writing down every cent you spend over the course of a week will give you a very clear picture of exactly where your money is going.
It sounds like a basic idea, but Cunningham says it’s a step many people don’t take. A recent NFCC survey found that more than 20% of respondents don’t know how much they spend on food, housing and entertainment. “I think they’re afraid to, fearing that it will reveal areas in which they need to cut back where they don’t want to make cuts,” she says.