Overall, all participants agreed the exercise empowered their money management in three major ways:

• Provided them a more accurate picture of their monthly expenses, including unexpected emergencies.
• Allowed them to identify areas or behaviours where they could cut back and save, in some cases up to $600 per month.
• Increased their confidence in their ability to save, inspiring them to set realistic savings goals.

These benefits were amplified among those less confident in managing their money.

Being aware of where your money goes, and knowing where and how to cut out unnecessary expenses is a fundamental step to setting a realistic budget. Only then can you take charge and make progress towards realising your money goals.

According to previous ME research, 59 per cent of 1,500 households surveyed did not record their monthly expenses, and 53 per cent failed to set a weekly or monthly budget in the past six months to December 2016.

In addition to identifying savings, understanding your expenses can be beneficial in other ways. For example, credit applications such as home loans require these details. Or you may want to make informed lifestyle decisions, such as changing to a lower paid job or starting a family.

There are a number of ways you can track your expenses, including apps, excel sheet method or the old-fashioned notebook method.

Whatever you choose, the most important thing is to do it, and keep it up for a period of time so you can identify key patterns. Only then will you be able to make informed decisions and take charge of your money.