Step One: Track It

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The absolute worst thing you can do for your budget is … not have one.

And yet the word budget is so intimidating that a lot of people just put off having one, so their money is a constant mystery.

See, if you only know how much you spend on the big things (rent, cell service, loan payments), you’ll constantly be confused where your money is going.

Luckily, there’s a Super Simple Solution to all of this – track it. Yes, every penny.

For some people, this means carrying around a notebook and writing down every purchase. I’m a little lazier than that, and also have the aforementioned love of graphs, so I wholeheartedly recommend Mint.com.

Mint (owned by Intuit) will link to your bank account (well, most bank accounts) and track every single penny that comes in and out. This means you’ll get a handle on not only how much you’re spending on rent, but also how much you’re spending on coffee and happy hours and throw pillows. You can analyze these numbers any way you want, and easily see where you’re overspending.

Mint becomes more valuable the longer you have it, since you can see how your spending (and income, and net worth – soon to become your favorite number) changes over time.

So that’s the first challenge for you: Set up an account in Mint, and let it start working its magic. In a few short weeks, you’ll know exactly where your money is going, and can start figuring out what you want to change.

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