“Where Did the Money Go?” Ensign, Feb. 1998, 70–71
We all share a common dilemma: our money sometimes seems to vanish into thin air. Is there too much month left at the end of your money? In launching an investigation to find out where all the money goes, I discovered a variety of ways our monthly finances can disappear.
Petty cash: Whenever we think we need extra money, we may visit an ATM machine or write out a check for cash at the bank and put the funds into our wallet. Once the money is there, we lose track of it and it quickly disappears. For example, the candy bar at the end of the newsstand is only 50 cents, and we have the change, so why not? After a few trips, we’ll find our extra cash is gone. Also, some ATM machines charge transaction fees. Most people consider the fee inconsequential, usually around $1.50, but those fees add up.
Rounding off checks: It is easy to fall into this trap. When you go into a grocery store, do you ever round up the amount of your check because it seems like such a small amount? For instance, you might only need to buy lettuce and a few tomatoes; your bill comes to $1.44. Being embarrassed to write a check for such a small amount, you write it out for $5.00. That extra money tends to end up where the petty cash did: as part of a disappearing act. If possible, write the check for the exact amount.
Grocery shopping: Some may question why this is listed here. The fact is, many families do not know how much they spend for food every month. For that reason, they spend until they have what they need—along with several things they don’t need—and then wonder why so much money has been spent on food. If you budget the same amount of money for food each month, you will find that those little “extras” you thought you needed will disappear, instead of your money.
Long-distance phone calls: It’s wonderful to hear a familiar voice of a loved one; however, it’s easy to forget that as the minutes tick away, so do the phone fees. Before long, you may have quite a few long-distance charges that were not in the monthly budget. Although it may not seem as enjoyable, a letter sent with a 32-cent stamp is a lot cheaper than a 30-minute long-distance phone call that may cost a lot more.
Impulse buying: I can’t tell you how many times someone has told me what a great deal they got at a 50 percent off sale and later in the conversation say how strapped they are financially. I usually find they had not budgeted for the on-sale item, but “it was such a good deal” they couldn’t pass it up. When you buy a “bargain,” you’re not saving money, you’re spending money. Because good bargains come along all the time, set aside the money first and then look for the bargains.
Credit card finance charges: When the monthly credit card bill comes, it’s tempting to pay the minimum amount without thinking about the high interest you’ll have to pay. The minimum payment on a credit card balance is usually about 2 percent of the outstanding balance each month. Therefore, on a $1,000 balance, you would have to pay only $20. But at an interest rate of 18 percent, the monthly interest for the entire balance is $15. In other words, you are only paying $5 toward your balance, and the rest of the money—$15—is going to pay off the interest. (Even if you don’t use your credit card next month, your next credit card bill will be $995!) Here’s a good guideline to follow: Except for emergencies, if you can’t pay off the balance in full each month, you should get rid of the credit card until you can.
These are a few suggestions to help keep our money from disappearing. With a little bit of effort, we can plan where our money goes, instead of wondering later where it all went.—Terry L. Fowler, Vancouver, Washington