Tuesday, May 8, 2012

How to track your spending

Tracking your spending can be fun and enlightening. You would be surprised to see how you spend your money on a monthly or daily basis. 

The point to tracking your spending is to see how to adjust your budget or to plan a budget if you have not already. How much money are you spending on the following?

* food                                             * auto maintenance
* entertainment                              * gasoline
* misc                                             * cell phone minutes
* eating out                                    * hobbies
* movie rental                                * gifts
* doctor co-pays                            * books/magazines
* pampers                                       * alcohol
* clothing/shoes                             * tobacco

Now you can find out. For tracking monthly spending just get a box. It can be an old tissue box, or shoe box any type of box will do. Mark your box with the month and year. Place the box somewhere convenient where you will always see it.

As you come and go, drop all receipts in the box. No matter how small the purchase, save the receipt. When the month is over, sort your receipts, add them up. Viola! Now you can see where your money went that month, and make adjustments to your budget if need be.

You can also keep a spending journal for a day. I have posted an example of my spending journal for this past Sunday below. As you can see, I didn't spend much. Usually, Sundays are spent at home for the most part.

You can pick any day to do this exercise and it can be done a couple of ways. The first way you can keep your journal is by writing down everything you spend as soon as you spend it. Purchase a small writing pad and keep it on hand, jot down what you spend as well as the amount spent. This should include purchases made with cash, checks and debit/credit cards.

The next way you can keep your spending journal is by keeping all of your receipts from a designated day. At the end of the day add up all of your purchases and the amount spent.

It is very is important that you count every single purchase, no matter how small, these add up. By seeing your purchases in writing, you will be able to determine how and where you are investing your finances.

This is a great exercise to try. Is anyone willing to give it a shot and share what you found? Hope to hear from you.

Remember. "True empowerment  comes through stewardship"

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