Do you find yourself living paycheck to paycheck?  Are you running out of money before the end of the month?  In order to cover certain types of expenses, are you raiding your savings?  Are you finding yourself using your credit cards to cover expenses but not being able to pay the credit card balance off when due?  Have you been carrying a balance on your credit cards and only able to make minimum payments?

Once you understand where your money is coming from and how much you are spending, you can better determine how to control it.  If you have sat down and figured out how much money you have coming in and also figured out how much money you have going out, let’s see whether you have money left over (SURPLUS), breaking even or losing money (DEFICIT) every month.

If you are spending more money in a month than what you are making in a month, you don’t have enough money to cover all your expenses.  It’s time to start evaluating your expenses.  You are living in a deficit and it will only get worse.  What areas can you cut back on?  There are several methods to help you control how you are spending your money.  For example, if you use an envelope system to assign how much money goes to each expense (one envelope for gas money, one for groceries, one for “fun”, etc), you stick to what is in that envelope and that’s ALL you can use.  You can utilize money management software (there are several available online and even as a downloadable app, if you have a smart phone).  You need to start accounting for where your money is going.

If you find that the amount of what you are spending in a month uses all that you are making in a month and there is nothing left over, you need to analyze where you can cut back on your expenses to allow you to create a surplus to begin an emergency fund, savings account, savings for college, IRA, etc.

If you subtract the amount of what you are spending in a month from what you making in a month and find you have money left over … great!!  You can still look over your expenses to cut back unnecessary spending and maximize what you are left with at the end of the month.

Now, what are you doing with the excess money … are you building up your emergency funds?  Are you putting it into an interest bearing savings account?  Are you saving for retirement?  Are you investing it?  If you have money left over at the end of the month, you want to make it work for you.