7 signs you aren’t as good with money as you think you are

You don’t know how much you earn or spend.

Mike Nudelman/Business Insider

If you don’t know how much money enters and leaves your bank account each month, you’re setting yourself up for overdrafts, overspending, and debt.

Solution: Start keeping a record of your income and expenses. You can use an app like Mint, LearnVest, or You Need a Budget, an Excel spreadsheet, or even a pen and paper, if that’s your style. Knowing how much money it takes to sustain your lifestyle is key.

Once you know how much you earn and how much you spend, some simple arithmetic will reveal how much you can afford to save, invest, or spend on high-tech headphones.

Bonus points if you’ve progressed beyond tracking your income and spending to establish a monthly budget. (For tips, check out these real people who keep diligent budgets.)