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Step Two: Where Does It Go - Expenses

Spending….it gets a bad rap and nobody really wants to talk about it.  But, did you know it’s something we do it just about every day. Think of how you feed your family, have clothes to wear, and have shelter.  You had to SPEND to get what you need.  Then think about how you get to work, watch TV, tithe, get married, have a baby!  Again, we have to spend…. And as long as we do it sensibly, to take care of our needs and give us comfort within our means…it’s okay! 

The question is, are we spending sensibly?  The only way to tell is by knowing where the money went, and that means tracking our expenses.  Tracking expenses can be a tedious and overwhelming task if you’ve never done it before.  See the Money Map Tools section for expense tracking suggestions.  There are several ways to do it, but the one that is best is the one that works for you! 

Once you have tracked your expenses, it will be necessary to categorize them so your money map will be more organized and manageable.  The following is a common way to categories expenses, but feel free to make adjustments for your situation. 



Utilities (electric, heat, water, sewer/trash)

Set Aside Funds

Periodic expenses*
Emergency savings
Savings goals (house, education, etc.)


Auto loan payment
Gas, maintenance, and repairs
Mass transit


Eating out
School meals, baby formula


Doctor or dental co-pays
Hospital or lab tests
Eye care/glasses
Dental care/orthodontics
Life, disability, long-term care insurance(s)


School activities, sports fees, etc.

Other Obligations

Credit card(s), student loan(s), personal loan(s)  
Spousal/family support

Personal Care

Laundry/dry cleaning
Hair care
Cleaning supplies


Books, magazines, CD's, DVD's, video games
Club memberships






It's important when first tracking expenses not to worry about how you paid for the expense because that may lead to miscounting the expense.  For example, if you took $100 cash from an ATM machine and used $50 for groceries, $30 for gas for your car, and $20 for eating out, you would only have three expenses to record.  The ATM withdrawal would not be counted as an expense. (Any additional fee to withdraw your money would be though.)   If you used a store credit card to buy a $40 pair of jeans and paid the balance in full when the bill arrived, you wouldn't count paying the bill as a credit card expense.  Only the jean purchase would be recorded as an expense.

Once you have your expense tracked and categorized, enter each in the 'current' column of pages two and three of My Money Map.  Notice there is an extra column next to each expense, with the header:  F/V.  As you are entering each expense,  indicate whether the expense is fixed (F) or variable (V).  Fixed expenses are predictable and consistent from month to month.  You don’t much flexibility when it comes to these payments.  For example, you can’t pay ½ your rent or make a partial car payment.  Variable expenses are less predictable and change from month to month.  You have flexibility and choice in the amount to spend.  We'll explain why this is important in step four.

Next up: Step Three - Compare Income and Expenses

*Periodic expenses are those that don’t happen on a monthly basis.  See step five for how to plan for these.