Where does the money go?

So many people say to us, “I just don’t know where the money goes!?”

Do you know where your money goes each month? Are you spending money on things you don’t even like or use? Are you getting value from your spending? Do you know the true cost of a recurring weekly or monthly expense?

Find out the six reasons why tracking your spending is a great idea. You can also find out how to track your spending and use our spending tracker template to keep track.

Let’s plug any leaks and have a strong financial ship. WOOT WOOT!

Create a financial gap

Now you have got your spending under control it’s time to work out if there is a gap between your income and spending. Most people spend everything they earn if not more. Do you have a consistent gap between your income and spending and do you know how big your gap is?

The true key to creating wealth over the long term is to create a gap between your income and spending. You do this by reducing your spending and increasing your income. One of the ways to increase your income is to start your own business or side-hustle, and Rebel Business School can teach you how to start a business with no money. Or see how to increase your gap or 10 ways to increase your income for other ideas.

It’s never too late to start

Bill Yount and Jackie Cummings Koski started the podcast Catching Up to FI. They both started late and wanted to build a podcast to help people make progress on their financial journey.

Maximise your money – what to do with your gap

Once you have created a gap between your income and spending, what do you do with your gap? There are some simple steps that we followed and we think will help you as well. One of the first things you can do is set up your emergency fund.

Your net-worth

Can you answer the question how much are you worth? Most people cannot answer with any degree of accuracy what their net-worth is. You can use our net worth tracker to calculate your net-worth and read how do I calculate my wealth building rate.

Money mindsets and beliefs – are they holding you back?

Our relationship with money is a critical element of our finances. Having a healthy relationship with money leads to good financial practices and better financial results. Find out what your financial philosophy is and your relationship with money.

Debt and getting out of debt

It’s so easy to get into debt!

There are three main ways we go into debt…

1. Life happens. Unemployment, redundancy, reduction in income, illness, worldwide pandemics…
2. Businesses want you to go into debt and have all sorts of tactics for getting you to borrow money from them. They don’t call it “debt” they have far sexier terms like “here’s some credit” or “why don’t you put it on finance”. These are all code terms for DEBT! We want you to be wise to it.
3. Ourselves: We do things to ourselves. We accept high interest rates, we have unhelpful spending strategies and we play the game of finance with credit card companies (and lose.)

How to get out of debt

We studied the most efficient ways to get out of debt, added our own content including things that people hadn’t considered and developed our own strategy. We call it the debt attack strategy, and there’s also our debt attack strategy calculator!

The debt attack strategy is the most efficient way out of debt and can create a huge impact on your financial life.

You can also get extra help from Money Saving Expert’s debt help plan.

Communicate about money

One of the biggest reason for divorce is money. In fact, 41% of people say money is a HUGE source of stress in their lives. If we can operate better, communicate better and work together to manage our finances it is amazing the progress we can make together. Find out how to talk to your partner about money.

Stay on track

We find having a monthly finance meeting helps us keep on top of our finances and Alan wrote an article on how to run monthly finance meetings. If you prefer to watch then we’ve also done a finance meeting how to YouTube video.

Choose someone to do the monthly meetings with so that you can hold each other accountable. Schedule it in each month and make it fun! We like to do ours over a leisurely breakfast.

Remember what gets measured gets improved!

Katie’s millionaire tool

Have a go with Katie’s millionaire tool and let us know what you think. All you need to do is go to it, type in your net-worth and it will tell you how many countries around the world you are a millionaire in!

​You need just £200 to be a millionaire in Colombian Pesos! We haven’t defeated the game yet and we aren’t millionaires in every country around the world! are you?

Next steps

Are you ready to take the next and invest? Read all about investing in our ultimate guide to investing.