It doesn't take rocket science to figure out if you spend more than you make you're soon going to get into trouble. Everyone knows that. The reason people spend more than they make is because they aren't in touch with their money. Not just figuratively, but literally.

Being actively involved in any endeavor makes you more effective at handling the situation. This includes managing your finances. As you know, I think personal finances need to be divided into two main areas: the long-term stuff, such as saving for retirement, and the day-to-day stuff, such as spending at the grocery store. Some of us seem to be preoccupied with the long-term stuff. Whenever I speak, I usually receive a question about where it would be best to invest money.

I think this is great. The problem is, the person that usually asks that question is the one who comes up afterwards and tells me how deep in debt he is. We need to focus on the day-to-day finances so we can save money to pay off debt before we worry about where to put money we don't even have.

This does not mean getting an online system that's going to automatically download all our transactions and only using it once a month to look at our bank balance. That is not unlike joining a gym and never using it and expecting to get in shape.

We need to take a more "hands-on" approach to our day-to-day finances. Not only look at where our money is going, but seeing the consequences of our spending. This will dramatically bring home a point and change our behaviors.

One of my favorite people in the speaking business, Julie Alexander; she helps companies maximize workplace morale and she talked about employee engagement in her latest newsletter. She referred to a study at Yale University that concluded the biggest competitive advantage will go to companies with highly engaged employees. Just think, if you were highly engaged with your day-to-day finances, how much better off would you be? Do you think that the Joneses might then be trying to keep up with you? Remember, more engagement gives you the competitive advantage!

What are you going to do today to be more in touch with your money? Please let me hear from you in the comments below.