Do you ask yourself where the money went at the end of each week? Do you ever come up short on paying for bills and have to use a credit card, payday loan place, or borrow a ten off somebody until you are paid? These are signs that you are living beyond your means. Poor people do it, rich people do it, and five-year-old children do it. Here is how you stop.

All photos in this instructable are of my art work and are Copyright Lisa M. Yarost. All rights reserved. Please do not use these images elsewhere without permission! Thanks!

Step 1: Write It Down!

Find a notebook that will fit in your purse or backpack. If you're a guy and you just carry a wallet, then tuck a sheet of paper in there each month and carry a pen or pencil, even if it's one of those little golf pencils. From now on, you are going to track every single penny you make and every single penny you spend, when you spend it. If you buy a coffee on your way to work or a candy bar from the vending machine, write it down. When you have a bill or a bank fee deducted from your account, write that down. If you find a nickel in the sofa, write that down too. You want to know exactly what is happening to your money!

Here's a way most people cheat, and you don't want to cheat: If you go to the grocery store and take cash back, do not write that down as groceries. You haven't spent it... just taken it out of your account. You need to track what you do with it once it's spent. Likewise, if you go to a superstore like Walmart for your groceries, don't put your new CD that you picked up in your grocery expenses, just because you paid for it with your groceries. You want to know where the money really goes!

Step 2: Spy on Yourself!

We've fast-forwarded a month. You have been dutifully tracking your spending, and now you have all this information. Take out your book or your sheets, and see what you've been up to. Find a set of highlighters or colored pencils so that you can classify your income and your out-go (spending).

I like to color my income in green, for some reason. :-)
When it comes to spending, you want to break that down into categories:
1. Fixed regular (like rent, subscriptions, car payments, student loans, insurance...)
2. Flexible regular (like utilities, transportation expenses, groceries)
3. Irregular (like unforseen medical bills, auto or home repairs, gifts, etc.)
4. Optional (Starbucks purchases, movies, alcohol, clothing, shoes, books, restaurants and fast food...) I like to put this category in red, because it's the one we need to watch!

Step 3: Add It All Up!

Holy cannolli, Batman! I'll bet you didn't think you would see so much red, did you? Remember, all that red is stuff that you chose to buy.

Now, add up all the income for the month, and write it in one column. Then add up each of the other categories, and write the totals in a second column. If your first column adds up to more than your second column, congratulations! You have made more money than you have spent this month! If your second column adds up to be more than the first, you have spent more than you made, much like the United States Federal Government.

Either way, you want to figure out how to get ahead so that the second column is smaller (or smaller yet) than the first.

Step 4: Is It Worth It?

Go back to your list, the one with all the colors on it. It's time to go through and see how you feel about the value you're getting for your money. Next to each expenditure, place a symbol indicating whether you feel you should spend (or buy) more (say, on fresh veggies or donations to charity), less (maybe on a particularly unsatisfying fast food binge that was a result of being too lazy to pack your lunch), or the right amount (perhaps on your rent or for your dog's food).

Now, think about all of the things you marked that you want to spend less on, and come up with ways to do so. Do you spend too much money at the book store? (Guilty, as charged!) Then start using the library.

Do you buy too many lunches out or eat too much fast food for dinner? Stock up on frozen dinners or canned soup and sandwich fixings and make sure your lunch is ready the night before work.

Can't live without that horrendously expensive ColdStone ice cream? You might think differently once you consider the price difference between their stuff and a half-gallon of even the best grocery store ice cream.

Step 5: Apply Your Knowledge!

Now that you know you will have to answer to yourself for every penny you spend, you can decide *before* you spend your money whether it is worth it to buy lunch at Wendy's three times a week, whether you really want to spend $20 a week on Starbuck's coffee, and whether going to the movie theater is really $8 better than borrowing a DVD from the library.

Knowing that you will have to write those expenses down in order to evaluate them at the end of the month may give you just the amount of time you need in order to change your mind.

Step 6: Repeat!

Do this every month, and you will never wonder where the money went. In fact, you will probably have more of it. You may soon find yourself making extra payments on your credit card or student loans with the money you save, or maybe socking a little extra away for retirement!