Okay, now that you’ve tracked every penny for a solid month and you know exactly where your money went, its time to start figuring out where your money is going. This is particularly important for the folks who have bills that sneak up on them regularly. We all have the car registration, house insurance or some other irregular bill that seems to come out of no where. These bills derail us from our budget, and make us put things on credit cards that we normally wouldn’t. However, by no means are these bills considered “emergencies” so we shouldn’t take the funds out of our stashes just yet either.

This is where forecasting comes in to play. Personally, I use a very simple spreadsheet, which I match up to my bank account about once a week because I get paid weekly. Column one is the date, column two is for credits {direct deposit}, column three is for debits {bills, gas, etc} and column four is the balance. Somehow, I managed to have a bill due each week of the month so this works out very nicely. To have everything due at the beginning of the month is a little scary . November is a tough month for me because not only is it the beginning of the Holiday season, it is also the month of my birth. Car registration along with getting snow tires put on, and the additional grocery bill because Thanksgiving is my favorite holiday! Not to mention the impending vacuum of money the Holidays can be for some people. Last year, I officially boycotted gift giving and just gave out homemade goodies and a “thank you for not making me rack up more debt”. Oh, but I’ve gone a little of course here…

Once you figure out what bills come up when, plug them into your spreadsheet. I like to forecast out a good six months. If I see any red, which means my account will go in the negative, I know I need to plan better. Perhaps go out for one less meal that month, or do some extra bookkeeping work.

This is one more way to take charge of your finances and have less surprises along the way. And it almost totally negates the temptation to spend because you saw how much money you have in your account when you went to the ATM.