How Much Do You Spend?By Terry RiggMost of us don't have a clue how much money we spend and whatwe spend it on. We spend it until it's gone and ... wecan find some more to ... ...
How Much Do You Spend?
By Terry Rigg
Most of us don't have a clue how much money we spend and what
we spend it on. We spend it until it's gone and hopefully we
can find some more to spend.
The conventional wisdom is that, if you want to know the details
of where your money goes, you keep track of every penny in some
sort of ledger. This is by far the most effective way to handle
this problem.
By keeping track of your purchases you will be able to make
decisions that could reduce your expenses. You can cut out
unnecessary expenses and put your money toward more important
things.
It is best to keep the ledger with you and write down this
information as you make the purchase. Naturally, if you have
a family they will also have to do the same thing.
Like I said this is a fantastic way to know where your money
is going. The problem is that most people don't stick to it
for more than a few days.
AN ALTERNATIVE
Keeping tract of your money is a means toward a goal. You
want to control your spending so that you can buy the things
you need and some of the things you want. It's as simple as
that.
Since you already know what your regular bills are going
to be each month, the only thing you need to keep up with is
your Household Expenses. This includes a lot of things like
groceries, car gas, clothes, etc. In order to do this you
will need to know how much money you have to use for this purpose.
The Budget Worksheet available at Budget Stretcher will allow
you to "brainstorm" your expenses to determine what you need
to spend your money on each month. You can print a copy of the
Budget Worksheet at:
http://www.homemoneyhelp.com/budgetworksheet.html
Here is how it works:
First, you sit down and try to think of everything you spend
money on and write it down. If you have a family it's best to
get them involved in this process. You won't be able to think
of everything at first but you will get a good idea.
Next apply an estimated dollar amount to each of these expenses.
Here again you are guessing. You have to be as realistic as
possible.
Now that you have an estimate of what you spend on your Household
Expenses each month you need to see if you have enough money to
cover it. To do this you simply total your regular bills and
savings and deduct it from your net income.
If you don't have the money to cover your estimated expenses, it's
time to start cutting back. Look at each expense and try to find
ways to reduce or eliminate it. For example, if you are visiting
the beauty shop twice a month change it to once a month.
There are thousands of ways to cut your expenses. The best place
to find ways to do this is to visit my Budget Stretcher Partner
sites. Here is a list of some of the best money saving sites on
the internet:
TheFrugalShopper.com
http://www.thefrugalshopper.com
GreedyFools.com
http://www.greedyfools.com/affiliates.php?partner=BudgetStretcher
BetterBudgeting.com
http://betterbudgeting.com
Debt Smart
http://www.DebtSmart.com
The Stay-At-Home Parents Page
http://www.geocities.com/sahmlomano/index2.html
Brighter Futures
http://www.brighterfutures.com
FreelanceByU
http://www.freelancebyu.com
Tidbits from the Pantry
http://www.humansrv.net
Usave2day.com
http://www.usave2day.com
MoneyMakingMommy.com
http://www.moneymakingmommy.com
You Save On Taxes.com
http://hop.clickbank.net/?terryrigg/wmdctp
Abbys Good Stuff for Free
http://www.anycities.com/abbys
Freebie Haven
http://www.121fun.com
If you have a family your next problem is going to be how to
sort your money. When you have your list of expenses you
will need to assign the responsibility for each of those
expenses to a member of the family.
I wrote another article that explains this process in detail
and provides specific examples of how to sort your money. You
can see this article by clicking on the below link:
http://www.homemoneyhelp.com/articles/sortmoney.html
As with anything else you will need to make adjustments. Even
if you decide to keep a ledger to track your expenses
circumstances change and you will need to adjust these figures
as well.
Knowing how much you spend is important, however, it is not as
important as having the money to cover your expenses. If you
have what it takes to keep track of every penny you spend I
would recommend that you do this for a couple of months and
use these figures to help you set up your household budget.
If you have tried using a ledger and find that it's just to
difficult I would use the method I've just covered.
The main reason budgets don't work is that they are just too
hard to keep up with. By setting up your budget to be as
simple as possible you are increasing your chances of making it work.
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