The Value of Monitoring Month to Month Expenses

For the most part, people have no idea what they spend money on. That is a scary position to be in. 
I once met someone who made a pretty good income, yet they had no money. They literally spent everything that they made. I asked them to write out how much they spend a month and in what category. They did as asked, but when I looked at their expenses, something was not adding up. When I added up their monthly expenses, the money they spent per month was far lower than their after-tax income. If the numbers they gave me were true, they would be saving quite a bit of money. Yet... They weren't.

As I said, this was if the numbers they gave me were true. Obviously, they were not. I needed to see what they were really spending their money on. I had them download the app Mint which tracks people's spending. I personally use Mint to track what I spend. This isn't a sponsor by any means; I just actually like them. Anyways, this gave us the real numbers. They had told me they spend around $300 bucks a month on food. Mint told a different story. They said they spent around $200 a month on entertainment and activities. Again, Mint told a very different story.

This person had no idea how much they were actually spending per month. That's not good. There are two ways to increase the amount of money one has at the end of every month. First, they can make more money. This can be hard to do. Second, they can increase the amount of money that they save. This can still be hard, but this is doable for a lot of people. 
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I encourage everyone to get a good idea of how much they actually spend per month and try and find ways they can spend less in certain categories.

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