The first step to understanding how money works, is keeping track of where your money goes. It is all too common that you get your paycheck and at the end of the month all your money is gone and you don't know where it went. In order stay on top of your finances you need to keep track of where you spend your money. This might sound simple, but the purpose of tracking your money is to find areas in which you may be wasteful or not using your money efficiently. Nine times out of ten, when you track you money, you will end up finding money that you didn't know you had before.
How to get started? It's simple, get a notebook and on one column record the money as it comes in (paycheck, dividends, etc). On the other column record money going out (mortgage, credit card charges, etc). Remember, it's important that you record everything, even if it's a dollar or two, accuracy will pay off. As the month comes and goes, you will now have your own personal cash flow statement. The first step to making your money work better for you.
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