Do you ever wonder where your spending money goes or how you can spend so much on practically nothing in so little time?

In the old days people brought their paychecks to the bank, deposited most of the money and pocketed the rest in cash. The cash was supposed to last until the next check. If it didn’t, it was an obvious cue that too much money was being spent.

Fast-forward to these days when paychecks are deposited electronically and we stuff our pockets with debit and credit cards. Beaten-up dollar bills and heavy coins never dirty our hands. It’s so much nicer than the old days. Unfortunately, it makes it too easy to bust the budget.

Without that dwindling pile of cash it’s harder to recognize how much is being spent. Sure, you can log on and look at your bank account every day, but most people probably don’t. When they finally see their balance they think, “no way!” More than likely it’s not the mortgage that’s killing them, it’s the daily money drain. If that scenario fits your life, the seven-day money challenge may help you get on track.

Certified Financial Planner Ed Gjertsen, vice president of Mack Investment Securities in Glenview, Ill., uses the challenge to give a wake-up call to clients who don’t realize how much they’re spending.

“They don’t need to be like Henry Ford and write down every nickel, but people don’t realize how much money is oozing out of their pockets. I ask them to guesstimate to the best of their ability how much cash they’ll need for a week’s worth of spending. It’s just the day-to-day stuff like gas, groceries, going out for meals. The usual outcome is they’re out of money by Wednesday.”

Learn your weaknesses

Karen Vitale of Bloomingdale, Ill., went to Gjertsen to get a grip on her finances after she had recently been widowed. The mother of four children took him up on his money challenge.

“I was trying to go from Monday to Monday,” says Vitale. “I carried a little notebook and would write it down if I stopped for coffee or went to the drugstore. Wednesday night I went to buy gas and I didn’t have enough cash. I had to resort to my credit card to get me through the rest of the week. I was shocked and a little disappointed.”

It’s probably safe to say most people can relate. Vitale figured out her weaknesses and resolved to tighten her spending habits, but it took that eye-opening experience for her to see what was happening.

The money diet

Mark Carruthers, a CFP in Garnerville, N.Y., also encourages some clients to employ the notebook method to monitor their spending for a short period of time. (If you need to get a handle on your budget before trying the challenge, use our handy

work sheet.) He’s seen many people set financial goals for retirement or the kids’ education only to watch them fall short or even derail because the budget isn’t under control.

“It’s the variable expenses that are always the problem. It’s fairly easy to account for fixed expenses. It’s the daily routines that can make up a large percentage of the money that’s left unaccounted,” says Carruthers.

Gjertsen likens the money challenge to a diet. You can’t expect to lose 30 pounds overnight, and you can’t expect to resolve years of lax spending habits in a week. But if it makes you think twice about spending $5 on something you really don’t need, you’re making progress. And, just as with a diet, there are those determined individuals who will make the change permanent and there are those who will slide back into their old habits.

Get ready in three steps

If you’d like to get a handle on your spending habits, all it takes is a small notepad and a bit of determination.

Step 1: Figure out how much cash you need to cover a week’s worth of gas, groceries, entertainment, dinner on the town, breakfast at McDonald’s, books, music CDs, cosmetics, gifts — the whole gamut of casual expenses.

Step 2: Be honest. Don’t deliberately overestimate so that you’re sure to have enough cash to get through the week.

Step 3: Set the anticipated amount aside and don’t use debit or credit cards.

If you get through the week with the cash set aside, congratulations! If you need to make a trip to the ATM, it’s OK. Review your purchases and see where you could have trimmed costs. This is about developing a mind-set where you seriously consider daily cash expenditures. It can lead to more money in your savings account and long-term financial plans that stay on track.

If you take the challenge, let us know how you did. If you had to replenish your cash, what did you learn about your spending habits? E-mail us at

editors@bankrate.com.

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