Most people don’t even want to think about it

This week’s question: “It seems like all my income disappears by the end of the month, and I want to know where it’s going. What’s the best way to keep track of my spending?”

You’ve already come to an important realization: Understanding your expenses will give you greater control over them.

Many people have a tough time getting to that point. Two-thirds of U.S. adults don’t keep a detailed budget that tracks income and expenses, a 2013 Gallup survey found. That’s often because they’re afraid of what they’ll find, says Maggie Baker, a psychologist in the Philadelphia area and author of “Crazy About Money.” But a deep dive into your cash flow can be the first step toward finally feeling like you’re on course financially.

“There’s a certain empowerment that comes with facing the truth,” Baker says.

There’s no best way to track where your money goes; what’s most important is following through. Understand your preferences, explore the available tracking tools and choose the best fit. Once you have results, start making small changes. Here’s how to begin.

Scrutinize your habits and inclinations

To get a full picture of what you’re spending money on — including fixed expenses like utility bills and fluctuating ones like meals out — track them for at least a month. That means recording every single thing your money goes toward.

Tracking systems generally fall into two buckets: manual and automated. When deciding which to use, consider your temperament and choose the one you’ll easily be able to integrate into your routine, says Matt Bell, founder of the blog

I’m a paper-and-pen gal; I already carry around a notebook for writing projects, and I monitor spending more consistently if I jot down my purchases right away. Bell says he prefers to use an online app so he can view his spending from anywhere, like the store parking lot before he goes shopping.

Learn what tools are available

Next, look closely at your options. If you decide to go manual, you could dump your receipts in a box near the front door, or enter everything into a spreadsheet with categories you can customize. Or, if you go the digital route, budgeting apps such as Mint, You Need a Budget and PocketGuard connect to your financial accounts and help organize your spending.

Alternatively, putting everything on a debit card provides an automatic record of purchases that you can check online. A credit card will do the same thing and might offer cash-back or travel rewards. But it’s worthwhile to monitor expenses using a credit card only if you don’t carry a balance. Interest charges would quickly offset the rewards you receive and the convenience of tracking.

Whichever method you choose, group your spending into specific categories, says David Peterson, managing director of United Capital Financial Advisers in Denver. Most apps will let you edit categories even if some are automatically assigned to purchases. Instead of “food and drink,” for instance, separately group “fast food,” “date-night dinners” and “drinks with friends.” That will help you identify where you’re spending a particularly high amount.

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