Budgeting woes: Where did all the money go?

New York Times columnist M.P. Dunleavey illustrated for her readers the panic of realizing your money is gone. You got a raise. You thought you managed your expenses all year. But you're still no further ahead than you were last year at this time. How can that be?

It was simple. After going through all of the planned and documented expenses they had for the year (mortgage, groceries, household expenses, etc.), there was a $10,000 gap. And where was the money that was supposed to be there?

Spent $30 a day, all throughout the year. A little cash here. A little cash there. And before the family knew it, $10,000 was out the window.

It can happen to any of us. We think we're living on a budget, but we end up spending money at times we least expect. We forget how those daily lunches add up. Or how some odds and ends at Target can eat into the budget.

The lesson for all of us? If you really want to control your spending, track everything that you spend. Even if you only do this for about 6 months, you'll be amazed at what you find. I can almost bet that you'll be saying, "I didn't realize I spent THAT much on XYZ!"

Suddenly, cutting your budget might not be so hard anymore.

Forensic accountant Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations through her company, Sequence Inc. Forensic Accounting. The Association of Certified Fraud Examiners honored Tracy as the 2007 winner of the prestigious Hubbard Award and her first book, Essentials of Corporate Fraud, will be on bookshelves in March 2008.