Welcome back! I hope you have been working diligently at paying attention and keeping a record of your daily expenses. Have you had any surprises? Were there things that you found yourself spending money on that you never even gave a thought to? It’s all these little dribs and drabs of money sifting through your fingers that add up. It doesn’t seem like a lot when you are buying one little thing at a time, but when you tally it all up at the end of the month and multiply that by 12 for what you are spending on all these frivolities per year .... Yikes!
In this day and age, it is often not actual money that we are parting with. Most people today have become even one more step removed from their spending awareness. Just pull a little piece of plastic out of your wallet, plunk it down and, voila, you have whatever you want. It barely seems that you’ve “lost” a thing. It’s just so easy to be unaware of how much is going out.
This first step in stemming the constant flow of too much money going out is to become mindful of your daily spending habits and just where your money is going. If you have done your “homework” from my January blog, then you now have a better idea of that. The next step is to write yourself a budget. This is where you can begin to trim some of that fat. Do you really want to keep spending all that money or are there some things you can forgo in the interest of saving money? Once you have a clear picture of where your money is going and how much you no longer want to spend (aka waste), you can allocate a certain amount to each line item of spending every month. Now you will have an accurate outline in black and white of where your money is going (and where you don’t want it to go!)
Here is a budget form that I created to help you plug your expenses into as many categories as I could think of. I have also left some spaces for those that you may have that I haven’t come up with.
Now I would like to introduce you to an old timey but timeless way to keep your spending in line and on budget each month. It is based on going back to using good old American cash money for your daily expenses. This is what I did throughout most of my years of raising my family. I did not know it at the time, but since the magic of the internet I have learned that other people do this too and they call it quite simply and accurately “The Envelope System.”
It is very inexpensive to get started and implement as all you will need is a $1 box of plain white envelopes. Then you simply divide your budget into spending categories and label the envelopes accordingly (e.g. food, gas, clothes, entertainment, health and beauty, household needs, etc.),
and place the amount of money that you have allocated for the month into the appropriate envelopes. This gives you a great visualization of how you are doing. You can actually see how much money you have left to last you until the end of the month. When the money is gone it’s gone. No more spending for the month. Can you “cheat” and take money from another envelope if one of them is empty too soon? Sure! But just who are you cheating? Yourself, of course! And, if you want to stay on budget, now you have less to spend in the category of the envelope you “stole” the money from. You will get better at knowing how much to put in each envelope for the month as you become more practiced at it. And hopefully you will also get better at finding ways you can save more money in each category too!
As I continue these blogs I will delve more deeply into just how to find those ways of saving more money in each of those categories. You can also attend my monthly meetings at the Red Hook Community Center for more tips and tricks on saving money through the magic of frugal living. (See the Events and Classes page).
So until we meet back here next month, I bid you adieu and happy savings!