Friday, January 1, 2010

Happy New Year! Now, Let’s Get Started…

… being frugal, of course! Where to start?

Keep Track

Starting or improving your frugal living choice can only begin when you know from whence you've come. That is, what the heck am I spending all this money on, anyway? So, you need to keep track. Start today! Write down everything you spend money on. I mean absolutely EVERYTHING! Some things will be easy. You've got your mortgage bill, utility bill, canceled checks. But what about the small stuff? Don't forget that quarter for the parking meter, that cup of coffee, or that tip that you paid for lunch. Cash is the most difficult to keep track of compared to ATM, checks or credit cards, and it does ADD UP! If they offer a receipt, take it! If they don't offer, ask for one. Keep ALL of your receipts. If you don't have a receipt, keep an index card, small notebook, or use your PDA to keep track of expenses without receipts.

Write it Down

So what do you do with all these receipts and records? Here's where you have choices, based on how comfortable you are with computer software. The simplest way to consolidate your spending is to make a chart. Use a piece of paper, a spreadsheet program, or software like Quicken. At a minimum, you will need a column for each week, with a list of categories. Write down all the expenses you've kept track of above in the appropriate places. Include the following:

  • Food (don't forget coffee, snacks for the kids, fast food, restaurants, etc.)
  • Clothes
  • Household Items (cleaning products)
  • Medical (prescriptions, over the counter items)
  • Automobile expenses (gasoline, oil, tolls, repairs)
  • Education (classes, other)
  • Entertainment (Books, movies, museums, travel, hobby items, etc.)
  • Gifts
  • Miscellaneous (anything that doesn't fit anywhere else)

Where is it Going?

Do your best to keep track of these expenses for a month. As the month goes along, you'll begin to see the trends in your spending. It may only take a week (or even a day!) for you to see how you can make changes to your spending habits.

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