The first step and one of the most important steps in your journey, is to fully understand where your hard-earned money is going each month! TIP We suggest that you setup a spending diary which is with you at all times, where you note every time you spend money irrespective of how little you may spend. Ideally, you should keep a diary for at least one month, although two months is probably better. If you are couple, you can either share one diary or keep separate diaries ensuring that every transaction is documented. Remember that your diary needs to be reflective of your spending, therefore, during this period, be honest and don’t avoid any of your normal behavior.

Once your diary is finished, you should identify headings to group your expenditure which have a common theme. For example, expenses associated with take away food should be grouped under “Take Home Meals”. Expenditure for eating out in restaurants grouped as “Eating Out Meals”. Gifts to family and close friends grouped as “Family Gifts” etc. TIP Ensure that you don’t miss the not so obvious things like coffee on the way to work, lunch at work, magazines and newspapers, online spend, public transport expenses, parking fines etc. You get the general theme. Essentially you want your groupings to be similar and not represent too large an amount, and you want to ensure that even the smallest of expenditure is included.