How many times have you heard yourself say “It’s only an extra 2 dollars, 10 dollars, 50 dollars, 100 dollars”? Be Honest. Recently I spoke with a former coworker about how she couldn’t manage to save any money. Since we were on the phone talking about something completely unrelated. I really couldn’t do the whole track your spending for 30 days; gather all your bills, etc. I did however have time to ask her what services or products she spends money on monthly. Such as, Gym Memberships, Premium Cable, Pedicures, etc. As she was going down the list of items she spent money on. I heard her say, well its only 20 dollars. Heck she even said it’s only an extra 100 dollars. See the problem here? “It’s only” adds up. The calculator in my head added up to $178 and that was just what she could remember in the 2 minutes we talked about this. You know it is probably ONLY another $50 to $70 more. We always underestimate the amount money we actually spend. My question to you is how much money are you “It’s only” spending. Here are a few tips to find out where your money drains are.
- Calculate all your income- Write down all the sources of Income for your household that you receive in a 30 day period. This is paramount to finding out how much your money drains amount to monthly.
- List your expenses- Next thing you want to do is, list your regular monthly expenses. List all of your regular monthly expenses such as rent or house payments, car payments, credit card and loan payments, gas, food, utilities, cable, internet and others. Try your best to be as exact as possible. . This will give you a good idea of what your basic expenses are.
- Track your spending– Spend the next 30 days tracking every dime you spend. It seems a little tedious but this is something you must absolutely do if you want to find if you are losing money. You can use a wonderful free online software Mint.com or you can buy a little $ .50 notebook to carry with you. If you use both cash and your debit card. Then you want to do both track your spending with Mint.com and use the note book for cash purchased.
- Assess the results- After you completed step 1-3, It is time to see interpret your results. Compare how much money you’re bringing in to how much money you are actually spending every month on bills and “It’s only” purchases. Are you living beyond your means? Do you have any surprises? Are putting any money in your savings account, How about investments, and retirement?
- Put this information to use- Now that you have all this information laid out in front of you. It should be easy for you to pinpoint exactly where your money is going and where you can make changes. It may seem overwhelming at first; I am not suggesting that you make all these changes at once. However, you can start with one or two changes and go from there.
What changes will you make?
Andrea is the Chief Chick of Smart Money Chicks. After filing BK twice (once because she panicked, second time because the pro messed the first time up), she realized that it all could have been avoided if she understood more about how her Finances worked and the options available. At that point, she wanted to help as many as she could never make the same mistakes again. Our Promise is that all the content you read on here is created or edited by Andrea
Excellent tips!
This is so timely, just today I have decided to get back into the habit of budgeting, planning and saving. Been working on it all afternoon. This was a good reference point for me.
I’ve been guilty of this as well as the saying, “I was going to spend that $20 somewhere else so I might as well…” That $20 could’ve been saved, but in my head, I’m like it’s not that much.
But as you mentioned, the $20.00 adds up and at the end of the year could be a small nest egg. I really needed to read this. Thanks for sharing.
Thanks for the words of encouragement. Yes our words have to be positive else we live up to our own low expectation by spending what we can’t afford.