It is always challenging to account for personal spending. Material spending categories (rent, house payments, food, taxes etc.) are easily understood as a percentage of one’s overall income. Daily expenses are smaller in amount and easily overlooked.

We are in the habit of presenting our debit or credit cards for all purchases. How many of us carefully examine those monthly statements? Studies have shown that people usually can account for 90% of their income; it is the remaining 10% which is a mystery.

So, what about those debit and credit cards?  After all, when you aren’t physically parting from your cash while making a purchase, it becomes harder to keep track of how much money you’ve spent. To more easily keep track of your expenses, consider putting away your plastic cards and paying cash for your day-to-day purchases.

In order to get a better handle on your expenditures you should start each month with a predetermined amount of cash. Relating a fixed amount of money to a fixed period of time forces us to reconcile the two.

When deciding on a beginning cash limit, estimate how much money you’ll need for restaurant meals, coffee, gas, entertainment etc. While you may need to adjust it, a rough calculation should be enough to give you a decent idea for what your initial amount should be.

After deciding, withdraw only that amount and then use that money to cover your daily expenses. Though it may be tempting to occasionally pull out a debit or credit card while shopping, you should stick to the plan and put those cards away.

That’s all there is to it. Each time you notice the cash in your wallet starts to visibly dwindle or there is an unspent amount at the end of a cycle, remind yourself that it’s time to recalculate why that is happening and implement appropriate adjustments. Analyze each expense, decide if it is necessary and if the amount is reasonable.

In the beginning, psychologically, this may be a difficult switch from the present plastic card methodology. However, in the long run, the rewards will become obvious.