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What to Do About Disappearing Dollars: Tracking Your Money Is Just the Start

Can you relate to this situation? 👇

Audrey C. has an enviable inflow of cash in her world.

She earns good money from her job, has a good-sized side hustle, and there’s a rental property to boot. 🙌

What could possibly be the problem here?

Ah yes, the outflow of money. 💸

At the end of every month, there aren’t many extra dollars kicking around. They seem to have disappeared.

“Something always seems to come up to use up the extra money,” she told me.

“What do I do?” she wonders.

Can you relate to the bit about money disappearing into the cracks of life?

I know! Who hasn’t had that happen, right?

Audrey wanted to know if she should be using the positive cash flow from her rental property to create extra spending and investing money every month.

It’s an interesting question, but she’s not ready to answer it yet because she doesn’t have enough information.

Nor does she have a framework from which to evaluate the flow of money in her finances.

Let’s look at how to handle that and figure out what happened to all those dollars.

First things first

Whenever you have a question about what you should do in your finances, regardless of the question, start with the fundamentals.

The first question to answer is “Where is my money going?”

To answer that, you need to track the dollars in and the dollars out.

Yup, both. That’s how you get to your savings rate, but more on that in another post.

When I asked Audrey if she knew exactly where her money is going, she said that she wasn’t faithfully tracking her spending.

To make savvy financial decisions, you can’t track some things some of the time, you need to track all the things all the time.

  • How much is going to housing costs (i.e. mortgage, insurance, utilities, repairs, etc)?
  • What are you spending on food (just the groceries here)?
  • What about subscriptions, entertainment, medical costs, extra-curricular activities, kids’ expenses?
  • Trips, transportation, and taxes?
  • Meals out?
  • And everything else that makes up your world on a monthly basis

That’s not as hard and time-consuming as it may sound if you’ve never done it before.

When you have a system in place and you’ve got some practice under your belt, it becomes easy-peasy-lemon-squeezy. 🍋

And now the details

Having one month’s worth of data is a good start, but you need more to inform bigger decisions.

For example, were last month’s grocery bills typical, or was it a light month because your partner was away for a week? Will you require more or less during the holiday season, when entertaining usually cranks up?

If, like me, you have a stupid-high number of gift-giving events that fall in a two-month period, you need to plan for that too.

I suggest that you get three months’ worth of information to give you a sense of your spending trends.

Once you can articulate where you spent your money and how much you spent in all the categories, it’s time to talk details.

So maybe you spent $2,000 on groceries, on average, over the last three months for a family of four. You’re still not ready to answer the question, “Is this a reasonable amount to spend?” until you know what you bought and whether it met the values test.

The Values Test 👉 Ask “Is this purchase in line with my core values and values-based goals?” And, “Does it represent good value for my money?”

The first part of the test ensures that you’re spending your money in ways that are aligned with what matters to you and your goals.

It will help you determine whether or not this use of money is in line with your most important goals.

When it comes to your groceries, you might decide that you don’t need to buy as many pre-prepared meals. You can opt to prepare more meals ahead of time to save a lot of money.

The second part of the Values Test is getting at whether or not you’re happy with the bang you would get for your bucks.

A purchase may well be in line with your values, but not represent good value in terms of dollars spent for that particular item.

Sure, you value fresh fruits and vegetables, but maybe you can get them at a different store for a much better price. Given how much you buy in a year, the savings will add up.

Let’s loop back to Audrey and apply what we know.

Before she can answer the question about the use of her rental income, here’s the groundwork she needs to do:

  • Track all dollars in and dollars out. Go back three months if possible. If not, she can track for the next three months.
  • Clarify her core values and create goals that are in line with those values.
  • Review her current spending to see where there is a misalignment between her goals and her current spending.
  • Change her spending patterns to weed out the parts that are not a fit for her values and goals.


I haven’t seen Audrey’s finances, but I’d be willing to bet that she won’t need to touch her rental income at all in order to have free cash at the end of the month.

She’ll probably be able to free up a lot of dollars just by reorienting her spending to be in line with her values.

Your decision-making foundation

To recap, in order to be able to make wise financial decisions, build a strong foundation and create a framework from which to evaluate your options.

  1. Track your money, both your income and your spending.
  2. Break your spending down into categories. For my recommendations on which categories to use, read this post.
  3. Dig into the details of your spending in a particular category. What, specifically, did you spend on? For example, were your transportation costs all related to your car, or were there a number of Uber expenses in there, too?
  4. Run your spending through the Values Test.
  5. Ditch any spending that isn’t aligned with your core values and goals.


Do you have a question you’d like me to answer? If so, reach out. Or pop it into the comments below.

Happy tracking!

Much love,


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Photo by Leeloo Thefirst

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