Why does it always seem to happen? You make enough money to cover your bills and necessary spending with some even leftover… yet at the end of almost every month, you find that your bank account is lower than where it began… either that or your credit card balances are higher. So where does it go? You don’t feel like you spent that much money but’s it’s clear that you did.


Some people are Spenders and know it. Some people are Savers and know it. But some people think they are Savers when they’re actually Spenders. And that is a dangerous place to be in as money will leave your bank account in places that you never expected – or hemorrhaging money. If you struggle paying close attention to your finances or do not budget, you are throwing money away and not even realising it.


To see if you are hemorrhaging money, and to assess your current financial health, you need to do a Spending Inventory. It’s like weighing yourself before you go on a diet. The numbers don’t lie.


Steps to Begin a Spending Inventory: 

  • Print out the most recent three months of credit card and bank statements.
  • Next, enter each transaction onto a worksheet of some kind that you’ve split up by category (grocerices, gas, fast food, entertainment, etc). This will help you find out how much you’ve been spending in each category.
  • Continue to go through every statement and put each transaction in a category
  • Add up the totals from each category.
  • Divide each total by three, so you can get an average of how much you’re spending in those areas over 1 month.


You may be shocked at how much you are spending in certain categories.


A few things may happen after you do this:

  • You could discover that you are even more broke than you thought, but don’t give up! There is light at the end of the tunnel.
  • You could also be shocked at how much money you’ve been spending. This is normal.
  • But you may discover you’re actually in pretty good shape, and once you learn how to cut back on some of your expenses, you can start to pay down more debt! This is great news!


Once you have those averages figured out, you can use those numbers to create your first budget. Remember the goal of your budget is to be able to stick to it. So, by using this 3-month-average method to get your first budget, your figures will at least be in the ballpark. Then start to cut things out and reduce where needed.


It can be very shocking and emotional to see those spending figures for the first time but don’t lose hope. This is only your starting point, once you take an inventory of your spending, and stick to that first budget you made, you’ll start making financial progress right away.


The only way to know if you are hemorrhaging money is to look at your actual spending. And even if you are pretty good with money, you should give it a shot. Maybe you’ll notice one or two small things that will allow you to save $40-$50 a month. That is well worth your time!


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“A wealthy person is simply someone who has learned how to make money when they’re not working.” – Robert Kiyosaki