Monday, March 1, 2010

Money Monday - Back to Basics Part 4 - Track Your Spending

I'm very happy that we'll be getting TWICE as much as I expected from out income taxes this year. That puts us back in the race to having $15,000 saved by July! In fact, I believe our basic emergency fund will be complete NEXT MONTH, two months earlier than we expected.

Anyhow, in continuation of the Back to Basics Series and in honor of the first day of a new month, we're going to TRACK OUR SPENDING this month!! If you want to refresh yourself on the last few weeks, follow the links below.

Week 1  - Organize a Space
Week 2  - Balance Your Checkbook 

Week 3 - Stop Using Credit


Starting today, write down every dime you spend...Every PENNY you spend. Keep track of all those drive through coffees and every milk and bread stop.


Don't be surprised if you're shocked at what you have before you at the end of the month. You'll likely be baffled at the amount of money you spend on groceries and fast food runs. Don't be discouraged. Facing these realities is part of the early and necessary steps to financial freedom. 


At the end of this month, figure out all the categories you'll need to start a budget based on this month's spending. Your budget will change monthly. You'll have to look ahead regarding, gifts, special events, and quarterly bills such as car insurance or taxes. Also, make sure you give yourself (and your spouse) a FEW dollars to blow on whatever each month. And by A FEW, I mean $20 bucks each (max) until you make some headway on that debt!


When you start budgeting, expect failure!! I said it. You will fail for the first couple of months. You'll wonder why it doesn't work and you'll be angry and want to give up. DON'T!! Just trust me...Months 3-6 will start to clear up and you'll get into a groove. Don't expect to cut your grocery budget in half or quit eating out altogether in the first months. Make modest adjustments until you become comfortable with following a budget.
Please trust me on this. If you want to succeed, you MUST TAKE BABY STEPS!


But for this month - all you're doing is tracking spending!

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