Have you ever noticed how a tiny drip of water can do a tremendous amount of work over time?
For example, over thousands of years, a small drip inside a cave can form a huge stalagtite.
A relatively average sized river like the Colorado can carve a spectacular formation like the grand canyon.
Or, like someone I know, a small leak in a bathroom, left unattended, can severely damage the floor underneath, and eventually even the foundation of the home, causing major structural damage (Read about my personal experience with water leaks).
In the same way, small money leaks here and there will serve to undermine your family's financial foundation.
Small Money Leaks Lead to Big Problems
It takes time for a small money leak to do a lot of damage.
When you're not paying attention, those financial leaks can start adding up, over time causing you to get behind on bills, live paycheck to paycheck, and struggle in ways you might never have struggled before.
Over time, these little leaks can ruin your life before you even know they are there.
So how do you find and repair those leaks so they don't get out of hand?
How to Stop Money Leaks
You start keeping close track of where your money goes.
Most people don't do this on a routine basis, and because of that, there are a large number of people in America who are living paycheck to paycheck, never able to get ahead financially.
How do you keep track?
Do a written budget every single month.
When you plan your spending and know where every dollar goes, you are becoming proactive with your money. You are directing your money to where it needs to go instead of wondering where it all went.
You are detecting the leaks and getting them fixed before they can do major damage to your financial foundation.
Budgeting is Not About Deprivation
Just because you're keeping track with a budget doesn't mean life has to be miserable and you can't do or have the things you want.
On the contrary, it simply means that you are making a point to take complete control of your financial situation so you don't make the mistake of spending more than you make like so many people do.
It means you're taking charge and preventing damage from money leaks before they happen.
I can tell you from firsthand experience that it's the best thing Angie and I ever did to stop the financial chaos in our lives.
Take Charge Now
If you want to start taking charge of your situation, it's not hard to do. The biggest obstacle is finally getting mad enough to make the decision that you're done living paycheck to paycheck and wondering where all your money is going.
So if you've made it to that decision point, you're in the right place.
I sincerely believe that keeping track of your money by using a written budget is one of the very best things you can do to ensure that you are a financial success.
Because of that, I want to let you know about the resources I've made available to get you started.
Personal Capital
One of my favorite resources for organizing my finances is Personal Capital. It's a FREE to use website that lets you organize all your financial information in one place. You can make a budget, manage investments, and use their powerful tools to analyze it all and see where you can do better.
Open your own FREE account at Personal Capital and finally get your finances organized.
Budgeting Resources
First, I have free budgeting forms for you. Download them, print them, and get started making your first budget now. Instructions are included.
You can also check out my posts on budgeting.
Also, I literally wrote the book on how to make a budget. It's short, easy to understand, and it's available here. It's a very affordable investment that will save you a ton of money.
Because if you're motivated to get started keeping track of your money, I want to make sure that no barrier stands in your way to getting everything you need to get started.
I truly believe this little book along with the free downloads and posts will be the key that will get you moving down the right path.
So there you go.
The best way to plug your money leaks is to make this small change now.
Don't put it off.
Don't procrastinate.
You know what happens when you do that.
Let me know how it goes by leaving a comment.
Resources:
Living Paycheck to Paycheck?- How You Can Get Ahead Financially
3 Simple Steps to Transition to a Cash Only Lifestyle
How to Make Your Own Life Plan
Hey, I’ve been trying to find those areas where money is "leaking" through. I’m working a job but it seems my balance isn’t going up, mostly because my earnings are being spent here and there in too many places. So I’m trying to eliminate those extra spending spots like fast food, and unnecessary commodities. Its going well, thanks for the post!
Great, glad things are going well for you! Are you doing a written budget to help get control of how your money flows? It’s absolutely the best way to keep track, hands down. If you’re not consistently doing a written budget (or using budgeting software), you’ll never have complete control and never know where every bit of your money goes. I encourage you to do that if you’re not currently. Thanks for the comment Trevor!
I’m not doing a budget but I will try it out. It would be good to keep track of my spending. I think that would make me feel more accountable for where I’m spending my money, too, ha. Thanks
You’re right, it does make you more accountable. I believe it is the best thing you can do keep proper track of your money and where it goes. It can be a bit difficult in the beginning because it’s unfamiliar. But once you’ve done it for a few months it gets much easier. Stick with it!
I’ve been keeping track of my money better, as well as making extra money on the side, mostly online. What are your thoughts on affiliate programs on the web?
Lots of people do well making money with affiliate marketing. It does take work like any job, but some people actually make a viable living with it. Check out anything by Pat Flynn (smarpassiveincome.com) and Derek Halpern (socialtriggers.com). They are a couple of the top people when it comes to doing that kind of thing well and doing it ethically without using sleazy tactics.