Are your Purchases Necessary?

I tend to  be overly zealous on budgeting, but I've found some people are horrified at keeping spreadsheets or categorizing items. So for those people, here is a simple way of perusing your purchases without writing everything down.

When shopping, separate your items between necessities such as fruit, vegetables, meat, milk etc. When you reach the cash out desk ask the cashier to subtotal after ringing up the non-essential items. These would be candy, non-nutritious items, treats etc. At the end of the month you can peruse how much you have spent and what could be cut back on.

For other items you might be keeping track off, clothing for example, simply highlight those items on receipts, using a different color for each category. Keep the receipts in an envelope for a month. At the end of the month you can add up the different categories and write them on the envelope. In a month or two you should be able to see a pattern and may be surprised at what you can cut back on.

For those who are prepared to set up a more detailed budget, see my previous posts on budgeting.

Budgeting
How to set up a budget

Starting a Budget

First Things First

Budget – The word brings to mind hours reviewing expenses, staring at numbers, and putting away the credit card.

Yes, it will be time consuming to start with, but the rewards are great. A budget doesn't mean you can't go out to eat, or take a vacation. These are things that can be added into the budget. The goal is to have control of your finances.

There are many “money” programs available and I have used Microsoft Money for years. This is no longer available, but take a look at other Personal Finance Software.

I started by setting up my budget on Microsoft Excel and by looking at MS Money reports (I use the category section when entering an expense), listed expenses for the prior month. If you aren’t using a money program, go through receipts, bank statements, or credit card statements. Many of these are available online if you haven’t kept any of the statements. If none of these are available start from today (or the beginning of the month).

Don’t be tempted to put everything under “other” or “miscellaneous.” I want to truly see where my money is going and in addition to listing the recurring expenses, I’m keeping track of everything I spend over $5. Drastic I know, but I’m on a quest. Also, if there are consistent expenses such as a morning coffee for $4.95 or five cokes from the vending machine, make a note of these, you may be able to save drastically by cutting down or eliminating these.

I haven’t listed mortgage/rent, insurance or car loans, but these are all areas that cost may be reduced.

Saving Pennies

Cost of living continues to rise. With many companies jumping on the “recession” bandwagon and, regardless if the company is truly in dire straits or chooses to use it as an excuse to put in place wage freezes or cut backs to line the pockets of the upper echelon, many of us are bringing home less money each year.

A Penny Saved is a Penny Earned is most commonly attributed to Benjamin Franklin. It is also noted that similar phrases were used by others, but for me it came from my Aunt Rene and those words have stayed with me since childhood.

So, taking those words of wisdom to heart, I’m on a quest to make the most of every penny/cent and waste neither money nor resources.