When you read that question did you think about how much cash you spent yesterday? Or how much your local government spent? Or the bills you need to pay, but didn’t have enough money to cover? Or the bills you paid?

All of these answers are appropriate. But, I was thinking of the cost of all your commitments plus personal spending plus bills you paid.

To accomplish this you need to convert all your monthly bills and commitments (also known as debts) into daily amounts [monthly bills like telephone divided by 30 days equals the daily cost]. However, if you made any telephone calls that are not included in your monthly plan, you need to add the cost of those calls plus the related taxes to the monthly amount divided by 30 days.

This is the ultra complicated way to think of what you are spending. If you attempt to detail your life at this finite of a level you will quit very quickly. To keep things simple I am known for recommending that you pick up a pocket notebook (if you don’t have one) and for the next month take the notebook with you everywhere and write down everything you buy (that coffee or snack you get at work) with cash, check or charge along with all the bills you pay with cash, check or withdrawal from your checking or charge account. Also, write down your guess of what you will be spending over the next month.

At the end of the month, summarize your total spending and compare what you spend to your original guess. Every time I have students do this, they come back and tell me that there is at least one area that they are spending more money than they realized.

It is important to know, that it is not critical how much you spend or on what you spend the money. The only important thing is that you CHOOSE what you buy and how much you spend. Remember, financial freedom, it’s YOUR choice!!