Where'd Your Money Go in 2021? Now's a Great Time to Figure it Out Wondering where in the world your money went in 2021? You're not the only one holding an empty wallet after 12 months! Check out a few tips to figure it...

How the heck is it already the end of 2021? Kind of like going on autopilot on your drive home from the grocery store, you may be looking back right now and wondering how you got here.

Do you have some financial regrets from this year? Maybe you bought a motorcycle that now just sits in the garage. Or maybe you actually built an extra garage. (I'm guilty, though it actually does have stuff in it. Of course.)

Can you guess Americans' biggest financial regret in 2021?

Saving enough money for emergencies, according to Bankrate's May 2021 Financial Security poll. Americans said that they'd work on building a better emergency fund after the COVID-19 outbreak.

There's something about wrapping up the end of the year that involves self-reflection, and understanding where your money went is a great thing to ponder. Does your investment account balance match what you thought you'd saved? If not, it can be a hard pill to swallow. Luckily, there's always next year.

Reasons to Pinpoint Where Your Money Went

If you're ending the year wondering where all your money went, here's why it's important to figure it all out.

Reason 1: You can ensure you're using your money wisely.

When you take a look back at the year, you probably don't want to take a look at every single purchase. Instead, take general note of patterns. Do you tend to land at the same three restaurants every month on a rotating basis? Do you spend money on clothes during a certain part of the month without realizing it? Be honest with yourself about what you should and shouldn't spend money on. It can help you determine how much of your money you could have put to better use.

Reason 2: You understand your debt (if applicable).

If you have debt, tracking your expenditures will allow you to understand how you got into debt in the first place. Understanding where you veered off course can help you design the best strategy for helping yourself to get out of debt, and tracking your investments will help you make it happen.

Reason 3: You can check your investment progress.

How much of your money went into investments? Will the percentage you put into your investments allow you to meet your target retirement goals?

Did you save at least 10% of your pre-tax income this year? Saving at least this much and also obtaining your employer match will most likely help you maintain your current lifestyle in retirement. If you want to have the best chance at building a multimillion-dollar portfolio for your golden years, save more than 10%.

Considerations for Next Year

If you're a little bewildered because you made a lot more money than what your current accounts reflect, let's walk through some "retraining" tips you can implement for next year.

Tip 1: Make a commitment to save and invest regularly.

We already mentioned that experts suggest investing at least 10% of your income into ane employer-sponsored retirement account — and get the match.

Many individuals feel as if they'll need between 55% and 80% of their preretirement income to maintain their lifestyle in retirement. The most common employer match is 50 cents on the dollar up to 6% of salary. Most employers — 82% — that offer traditional 401(k) plans match a portion of their workers' account contributions but just 28% allow employees to vest immediately, which means that all of the money is yours.

How much will you need to save to get to the "right" amount? You can find out with a lot of great retirement calculators online.

Don't forget to save in tax-advantaged accounts. When you put money in pre-tax funds, you reduce your taxable income and you get to keep more of your money.

Consider using the following types of tax-advantaged accounts to your advantage: municipal bonds, which are debt securities issued by a state or local government, can be a great option if you want to incorporate a less risky element to your portfolio. You lend the government money the government entity pays you with interest when the bond comes due. IRAs are another great tax-advantaged option other than your 401(k). They can grow tax deferred until retirement.

Tip 2: Get diversified.

Once you make a commitment to invest regularly, have fun and mix it up. Add several types of investments and financial instruments to your tally. Staying diversified reduces the risk of all of your investments tanking at the same time, which means you more easily mitigate losses.

Consider using index funds (or mutual funds, if you want a professional involved) to make sure you're diversified. You can also arrange for your funds to reduce risk by shifting your portfolio balance from equities (more risky) and to bonds (less risky) as you approach your later years.

Tip 3: Live below your means.

A total of 54% of U.S. consumers live paycheck to paycheck, according to the Paycheck to Paycheck Report.

Unfortunately, you can't build wealth if you're constantly spending more money than you invest or save. Many people who meet their money goals spend less on things that depreciate or don't buy items that they don't need at all. When you put massive effort toward paying off your credit card balance every month, having an emergency fund that covers between three and six months' worth of income, have housing costs at less than 25% of your take-home pay, stick to buying only the essentials, you'll likely have money left over to invest and save throughout the year.

It's Worth Taking a Look at Where Your Money Went in 2021

It might be really, really hard to look at where your money is going because it's hard to face this kind of thing head-on. You may want to consider getting an app to help you track your money. Some apps help you do more than track your money — you can even put it into spending categories so no pennies go to waste.