Do You Know Where Your Money Is?

The answer to this question may be obvious but in reality most people don’t have a clue where their money is spent and where their money is invested. 

I often hear people saying, “Parang dumaan lang sa palad ko ang sweldo ha…di ko alam kung saan napunta” (I don’t know where my salary was spent).

This was also my dilemma before I took conscious effort in managing my finances. As a typical office worker, happy days would be right after payday. We eat in expensive restaurants, watch movies, clubbing, travel, salon visits, shopping to our heart’s desire and the list goes on. Then a few days before payday, there’s nothing left. We seem to be clueless where our money went.  

I am not saying that we should totally deprive ourselves from these pleasures. In fact, like a typical woman, I enjoy engaging in these kinds of activities because they give me joy.  I love pampering myself!  I also believe that you don’t have to be a miser and live a boring life to be wealthy.

The key here is to create a balance -  know first where you stand now in terms of your financial situation, get organized and have a goal where you want to be. I know that getting organized can be difficult especially if you are not used to monitoring your finances. But once you’ve started it, the next steps will be relatively easy.  

The Personal Statement of Income and Expenses sheet you can see at the bottom can be your guide to determine where you are now. Fill out the sheet so that you will have a better grasp of your financial situation. 

Personal Statement of Income and Expenses

But in order to accomplish this, you need to find first the necessary documents and have an organized filing system.

Here’s what you need to do. Use an expandable long folder with dividers inside. You can buy this in any bookstore. Then, based on the tips given by financial planning book author David Bach, label each divider as follows:

v     Tax Returns – place your yearly Income Tax Returns (ITR)

v     Investment Accounts – stocks certificates, mutual funds, and UITF statements.

v     Savings and Checking Accounts -  monthly bank statements

v     Household Accounts – house title, home mortgage, etc.

v     Credit Card Debt  - all credit card records and statements

v     Other Liabilities – these would include other liabilities such a college loans, care loans, personal loans, etc.

v     Insurance -  insurance policies such as health, life, car, homeowners or renters, disability, long-term care, etc.

v     Family Will or Trust – copy of your most recent will or living trust, along with the business card of the lawyer who set it up.

v     Children’s Account (for those who have children) - put all statements and records pertaining to college saving accounts or other investment you have for your children

Once you’re done, keep this in a file cabinet and feel good that you have achieved the first step to financial security.