“Financial Awakening, Part II: Knowing and Owning Your Financial Situation”

Determining your current financial situation can sometimes feel insurmountable.

Everyone has heard the phrase, “How do you know where you are going if you don’t know where you are?”  After confessing my “dirty” secret of debt, the next step was to make a sober assessment of my financial situation.

When I became determined to take control of my financial life and become debt free, I needed a clear picture of where I stood. That meant not just being able to track money in and out, but also discovering my own strengths and weaknesses when it came to keeping a budget.

Mint.com's graphical representation of your expenses helps you stay on budget.

Soon after I had made this decision, I heard a story on NPR about Mint.com, a free website that allows users to retrieve financial information from all their accounts – banking, credit cards, loans, mortgage, etc – and track them using their secure online finance software.  Since I had nothing to lose by giving it a try, I spent one Saturday afternoon adding all my accounts to my profile on Mint.com.  After I was done, my negative net worth was displayed in colorful graphs and charts.  It was truly eye-opening.

Mint.com created a budget for me based on my past three months expenditures.  This projected budget had us spending about $400 over our monthly income, further highlighting that we were actually digging ourselves deeper and deeper into the hole each month.

Mint.com splits expenses into categories to help track your spending trends.

By putting my purchases  into  different categories like “groceries” and “restaurants”, it also allowed me to see where my money was going.  This tool also showed me specific places I was spending my money, like the $71 I spent at iTunes in June.  Ouch!

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.