Have you ever had a twenty dollar bill one day and four ones the next? If you're like most people, you often have no idea where your money goes. You may find yourself wondering what you could possibly have spent all your money on, and if you paid cash, you may not have a record of what you spent, and where you spent it.



This kind of vagueness toward money may seem fairly harmless. Everyone has experienced not knowing where that twenty went. But if you're constantly not sure where you've spent your money, and you find yourself in financial difficulty more often than not, you could have a problem.

When you're not in control of your money, it's hard to move forward financially. It may not feel like spending cash without knowing where it went is really "being out of control," but this is one symptom of not controlling your own finances.

Fortunately, not knowing what you spend, on what, is very easy to remedy. Of all the financial problems you may face, this is the simplest one to change. It will take a little effort and a lot of determination, but within a few days you can be completely in control of your money simply by knowing what you're spending on, and how you use your money.

Creating an awareness of your spending helps you control your spending and save/pay down debt. This first step in getting on top of your financial situation is very easy. Just write down every penny you spend, regardless of how small the purchase. Carry a notebook or a piece of paper in your wallet, or record your spending on your PDA or your phone. The key here is to count everything. Even count the soda from the machine and the candy bar when you buy gas.

You do not have to analyze this information, study it for patterns, or anything like that. Just the simple act of writing down your purchases will make you much more aware of what you're spending. That's the whole goal of this exercise. Once you become aware of your spending, you can make better decisions.

It may not seem like just writing down everything you spend can make a huge difference in your financial situation, but if you do this consistently for one month, you will notice an enormous difference in your finances. As you increase your awareness, you will also pay more attention to what you spend before you spend it. You'll start to hesitate before you buy that soda or stop for a cup of coffee on the way to work.

Knowing what you normally spend helps you gauge whether you're spending more or less, and make adjustments in your spending as needed. It's very hard to focus on a goal like "spend less," when you don't know how much is normal.

Keeping track of your spending consistently gives you a baseline by which you can judge all of your future spending, and keep your promises to yourself regarding regulating your spending.