Today we look at where your money goes, and we'll do it together. Most of us know roughly what we earn, but few of us can say where that money goes by the end of the month. One week of notes and about twenty minutes of arithmetic is enough to get a pretty clear picture. Think of it as an X-ray: it doesn't judge, it just shows what's there.
Write everything down, no filtering
For seven days, record every expense as it happens: how much, on what, and how you paid. A notebook, a phone note or a spreadsheet will do. What won't work is "I'll note it later", because the small things are the first to be forgotten, and the small things are exactly what we want to see.
When the week is over, each line goes into one of three buckets. Fixed expenses repeat every month for a similar amount and aren't decisions you make daily: rent or mortgage payment, electricity, internet, phone, transport, insurance. Variable expenses are necessary but change from month to month: groceries, fuel, clothes, the odd night out. And small leaks are those little, almost automatic purchases that mean nothing on their own: the coffee, the snack, the subscription you no longer use.
One practical point: fixed costs don't fit into a single week, so take them from last month's bank statement and bills. Anything paid once a year, like an insurance premium, gets divided by twelve.
An example with numbers
Picture someone who takes home 1,800 euros a month. It's an invented case for practice, not anyone's average. Their fixed costs add up to 1,000 euros. During their week of notes they spent 112 euros on variables and 28 on small leaks. To turn that into a 30-day month, multiply by 30 and divide by 7, which gives about 480 euros of variables and 120 of small leaks.
Now set each bucket against income. Fixed costs are 55.6% (1,000 out of 1,800), variables 26.7%, small leaks 6.7%, and what's left, 200 euros, is 11.1%. Everything adds up to 100%, give or take a tenth from rounding, and that's your check: if your percentages don't close, an expense is missing or counted twice.
What to look at first
Here is the order I'd follow. First, what's left over, because it sums up everything else: if it's zero or negative, the month is being paid for with savings or debt, and that comes before anything else. Second, fixed costs, since they are the biggest bucket and the hardest to move. Once they pass half of your income there is little room to manoeuvre, although there's no percentage that suits everyone: it depends on where you live, your family and your pay. Third, the small leaks, which in the example look minor (6.7%) but add up to 1,440 euros over a year.
Watch out for one common mistake: drawing conclusions from an unusual week. If your seven days included a birthday, a trip or a bonus payment, the picture comes out blurred. In that case, repeat the exercise for another week, or compare it with your monthly statement to see whether it adds up.
What comes next
Once your list is finished, notice one thing: which line shows up most often. It's usually not the big expenses, because you see those coming. What repeats most is often what you don't see, and that's what we'll talk about in upcoming posts.
Educational and informational content only, published on 9 November 2026. It is not financial, tax or legal advice, nor a personalised investment recommendation, nor an offer or invitation to buy any product. The amounts and percentages in the example are illustrative and do not come from real data. Past performance does not guarantee future results, and all investing involves risk, including the loss of capital. Figures may have changed since publication. Before making a decision, consult an authorised professional.