If you want to know what’s really going on with your spending and savings accounts, you have to make time to take an active role in monitoring and tweaking your budget and your spending habits. Hopefully you’ve read the first three parts on this series about good financial habits, and therefore you have already taken the time to sit down and create a budget that you have begun to put into practice in your daily life.

Even though the goal of your budget is to outline the things you have to spend money on every month as well as the things you want to spend money on every month, there’s no way you can create a budget that will work forever. In fact, in order to keep on top of your finances and to have a realistic budget, it has to be a living, breathing plan that grows and changes with you.

To accomplish this, you need to set aside time every day (I’m only talking about five to ten minutes – I prefer doing it in the morning before I begin my work day) to monitor and record your spending habits. There are many ways to do this – Quicken is a great program if your finances are complicated, and today some banks even offer free budget software online when you open a checking and savings account. I do this simply by taking the amount in my entertainment budget that I have allotted to spend on whatever I want or need each month in addition to my bills (I include gas, food and sundries in with this amount) and writing it at the top of a sheet of paper. Five mornings a week I subtract whatever I’ve spent in the previous 24 hours from the total and make a small note about what I bought – groceries, makeup, shoes, etc. This allows you to know exactly WHAT you are buying and, if necessary, to determine what things you can do to cut corners.