Q: 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?
A: 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 MattAboutMoney.com.
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.
START WITH ONE SMALL CHANGE
Once the month is over, don't panic if the results shock you. Baker says one couple she worked with couldn't believe they spent 25 percent of their income on takeout.
A guideline like the 50/30/20 budget can help. It recommends you use half your take-home pay on necessities, no more than 30 percent on wants and 20 percent on savings and debt repayment.
But you don't have to overhaul your life to mirror the 50/30/20 budget. Start by making one change the following month. Maybe you'll aim to spend $100 on drinks out instead of $150, Peterson says. That $50 can go toward emergency savings or a travel fund -- pick something you had felt was out of reach. Taking control of your cash flow will make your spending more meaningful.
"If you really desire the financial life that has some peace of mind and some joy attached to it," Bell says, "tracking can feel good."
"Ask Brianna" is a column from NerdWallet for 20-somethings or anyone else starting out. I'm here to help you manage your money, find a job and pay off student loans -- all the real-world stuff no one taught us how to do in college. Send your questions about postgrad life to email@example.com.
This column was provided to The Associated Press by the personal finance website NerdWallet. Brianna McGurran is a writer at NerdWallet. Email: firstname.lastname@example.org. Twitter: @briannamcscribe.
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