Where your money goes

Track one normal month

For the next 30 days, write down every amount that leaves your accounts or your wallet. Your bank statement covers card payments and transfers, so you only need to note cash spending by hand.

Don't change your habits yet. The goal is an honest picture, not a perfect month. If an unusual month is coming, such as a holiday, track the month after instead.

If you share costs with a partner or flatmate, record only your own share, or track the whole household together if you budget as a team. Either works, as long as you pick one and stick to it.

Sort spending into four groups

Long lists of categories are hard to keep up. Four groups are enough to start:

• Essentials – rent or mortgage, utilities, groceries, transport to work, insurance and minimum debt payments.
• Wants – eating out, subscriptions, hobbies, clothes beyond the basics.
• Saving and extra debt payments – anything that improves next month and next year.
• Irregular costs – bills that come once or twice a year, such as car insurance, gifts or a yearly subscription.

A worked example

Say your take-home pay is €2,000. After a month of tracking you find €1,150 on essentials, €520 on wants and €150 moved to savings. That adds up to €1,820, so €180 is missing.

The missing money is usually small cash spending or a yearly bill you forgot. A car insurance bill of €360 a year is really €30 a month (360 ÷ 12 = 30), even though it only appears once. Divide each yearly cost by 12 and add it to your monthly picture so it never surprises you.

Look at the numbers without judging

When the month is done, add up each group and compare it with your take-home pay. Ask two questions: does anything surprise you, and does any spending not feel worth it?

You don't need to cut everything at once. Spotting one or two leaks, such as a subscription you no longer use, is a good result for a first month. Write the totals down somewhere you will find them again – they are your starting point for the rest of this module. The next lesson, the 50/30/20 rule, gives you a simple way to judge whether the split looks healthy.