Most people think they know where their money goes, but are shocked to discover the truth. Experts say that most people, from all walks of life, spend about 20 percent more than they think they do.

A sure way to find out where your money is going is to track your spending over a period of time. To begin, carry a small notebook and record your daily spending (all of your expenditures, however small). Use this information to

• identify areas where spending can be cut
• redirect your income toward the things that matter most
• create a monthly game plan (budget) for your spending

• save your receipts and write on them what was purchased
• use checks (if you have free checking) for all purchases above $10
• record all checks and ATM withdrawals in your check register

• Where did most of your money go?
• Were there areas where you were surprised by how much you spent?
• Are there areas where you could cut back?

Every dollar you spend is a dollar you won't be saving or investing. Yes, you'll get another paycheck soon. But that particular dollar is gone forever. Here are a number of ways you may choose to cut spending.

Use your checking account

One of the best tools for controlling spending is a checking account. It gives you an easy way to track your spending and keep tabs on how much you have left. It also saves you:

• check-cashing fees at currency exchanges
• the cost of money orders to pay routine bills
• ATM fees

Ideally, you'd like a checking account with no charges or monthly fees. Such accounts, however, often require a minimum balance of $100 to $500. If you can't maintain a minimum balance, open an account that charges low fees - then move up to free checking as soon as you can.

Keep accurate records

Use the check register of your checkbook to track the checks you've written and how much money you have left. Save your ATM withdrawal receipts and record them as well. Also, be sure to record any transactions you make over the Internet. This will help you avoid penalties for going under your minimum balance or bouncing a check.

Balance your checkbook

Balance your checkbook every month by comparing your check register with your monthly statement. This will help you find any mistakes you or the bank may have made. Banks do sometimes make mistakes.

Store your canceled checks and bank statements in a safe place. These records come in handy at income tax time, and can save you money by proving that you paid disputed bills.