DETERMINING

WHERE YOUR
MONEY GOES
BULAWAN, ALONDRA T.
VALDEZ, LHEA D.
Examining Overspending

■ Many folks earn just enough to make ends

meet. And some can’t even do that; they
simply spend more than they make. The
result of such spending habits its, of course,
accumulation of debt.
Having access to credit

■ As you probably already know, spending money is easy.

Thanks to innovations like ATMs and credit cards, your money
is always available, 24/7.
■ Sometimes it may seem as though lenders are trying to give
away money by making credit so easily available. But this free
money is a dangerous illusion. Lenders aren’t giving away
anything except the opportunity for you to get in over your
head, rack up high interest charges, and delay your progress
toward your financial and personal goals.
Misusing Credit Cards

■ Bank credit cards was invented by bank of America near the end of the
baby boom.
■ Credit cards can be a great tool when used properly. In the early days,
these cards typically required that you paid the balance in full each
month.
■ This came in handy as you could make purchases without using your own
cash.
Taking Out Car Loans

■ An auto works much the same way as other types of

loans. You take out a car loan through an institution,
like a bank or the auto dealer where you’re getting the
car. That institution agrees to loan you money to buy
the car, and you agree to pay back the amount you
borrowed through monthly payments, plus internet .
Bending to outside influences and
agendas
■ Some people just have to see the latest
hit movie, wear the latest designer
clothes, or get the newest handheld
personal digital assistant. They don’t
want to feel left out or behind the times.
Spending to feel good

■ buying yourself something feels good. Whether it is a new pair of shoes,

the hottest new video game, or even a good book we all enjoy getting
something new. There is absolutely nothing wrong with this, as long as
you don’t go overboard.
■ You’ll feel good about your purchase whether you make it with cash or
by credit card,
Analyzing your spending

■One of the best things you can do for yourself to

get your finances in order is to analyze your
spending. A very important part of personal
financial planning is understanding where all your
money goes. When you know where it is going,
you are more likely to make wiser financial
choices, and you are more likely to develop good
savings habits that can help you build wealth
.
Tracking spending the “low tech” way
■ Analyzing your spending is a little bit like being a detective. Your goal is to
reconstruct the crime of spending.

5 low-tech ways to manage cash

Low-tech budgeting
1. Write it down.
- You can get a notebook just to record spending or write down expenses in a
planner you already use.
2. Save receipts.
-Keeping receipts also works as a backup for any purchases you forget to
write down. McGee carries a small bag in his pocket for receipts and lays
them out when he gets home.
3. Cut expenses.
-Some people swear by the envelope system, especially for groceries, dining out, clothes
and other easily controllable expenses. You budget the amount you’ll spend in each
category for the month and put that much cash in an envelope. When the money in an
envelope runs out, you’re finished spending on that category.
4. Cash or not?
- For some people, spending only cash helps cut expenses because handing over those bills
is more tangible than writing a check or swiping a card. But for others, ready cash in the
wallet is more easily spent.
5. Comparison shop.
-To further manage your grocery spending, start a price book or spreadsheet to track prices
of items you regularly buy.
-If one grocer in your area typically has lower everyday prices, use that store as a
benchmark, Fowler says. Then when stores put items on sale, highlight the sale price, she
says. You’ll soon see patterns in how often certain items go on sale.
Tracking your spending on “free”
website and apps
■ Software programs and Web sites can assist you with paying bills and tracking your
spending. The main advantage of using software or Web sites is that you can continually
track our spending as long as you keep entering the information.
■ But you don’t need a computer and fancy software to pay your bills and figure out
where your spending money.