Budgeting 101, part 2
Last week I blogged about creating a budget to help you spend less. The first step was to write in your monthly and irregular yearly expenses into your budget worksheet.
Today we're taking the next step. Open up your budget and add in any expenditures that slipped through the cracks last week. It's super important to figure out every way your money flows out if you want to stem that flow.
Multiply each line item by 12 to get the yearly amount you spend on each category. Think the numbers are a little high?
Target two or three categories for reductions and aim to decrease your spending in these areas by...
...10 to 15 percent next month. If you are really gung-ho you can choose more than three categories but in my experience it is best to adapt your lifestyle slowly rather than attempt to change everything at once.
On a slip of paper write down how much you are aiming to spend in these categories after the reduction. Brainstorm ways you can reduce spending in the these categories. For example, does that mean limiting take out to three times a week? Once a week? Does it mean buying only one new pair of shoes a month? Or one every six months?
Write down your best reduction ideas on that same slip of paper and tuck it into your wallet. When you are on the verge of buying something, check that the purchase matches your budget goals.
If you make the purchase, subtract it from your total allowed amount for that category. The slip will remind you how much you have left in that category. If you don't want to use a slip of paper, use a blank checkbook register, as suggested by an anonymous reader.
Tell a friend - your accountability partner - which categories you are going to spend less on and how you are going to do it. It will strengthen your resolve and raise your accountability. Kind of like having a gym partner.
Good luck, and stay tuned for the next installment of budgeting 101 with the bargain hunter!
About The Bargain Hunter
Daily News staff writer Julia Scott loves to find bargains on everything from groceries to Gucci. Her tips will help keep your hard earned cash where it belongs - in your pocket.
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