Chapter 3

Managing Where Your Money Goes

In This Chapter

arrow Understanding why people overspend

arrow Assessing your spending

arrow Tracking your expenses via “free” websites

As a financial counselor, I’ve worked with people who have small incomes, people who have six-figure and even seven-figure incomes, and everyone in between. At every income level, people fall into one of the following three categories:

check.png People who spend more than they earn (accumulating debt)

check.png People who spend all that they earn (saving nothing)

check.png People who save 2, 5, 10, or even 20 percent (or more!)

I’ve seen $40,000 earners who save 20 percent of their income ($8,000), $80,000 earners who save just 5 percent ($4,000), and people earning well into six figures annually who save nothing or accumulate debt.

Suppose that you currently earn $50,000 per year and spend all of it. You may wonder, “How can I save money?” Good question! ...

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