How Much Do You Spend? By Terry RiggMost 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
details of where your money goes, you keep track of every penny in some sort of ledger. This is by far 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 ledger with you and write down this information as you make purchase. Naturally, if you have a family they will also have to do 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 things you need and some of things you want. It's as simple as that.
Since you already know what your regular bills are going to be each month, 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 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 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 beauty shop twice a month change it to once a month.
