Look at every expense as a potential source of leaks. It’s the day-to-day spending habits that are the real gushers. Tracking your spending, however daunting and unpleasant it may seem, is worth the effort. Once you know where your money goes you can see the leaks more clearly, and it becomes clear what you need to do to plug the leaks.
Start with whatever records you have. Use monthly statements, checkbook registers, receipts and other records to see where your money goes. Carry a small pad with you and record your daily spending habits. Write down every cent you spend, what was purchased, and the reason.
Once you know where your money goes, examine your spending habits. Look for ways to replace spending habits with savings habits. Does most of your money go for things that are important to you? You may want to spend more for family recreation activities, for education, or for your retirement or other future goals.
Does “Spendy” sound like you?
Spendy goes through the drive-thru for a cup of coffee and a bacon and egg biscuit on the way to work. Midway through the morning, he runs across the street to the coffee shop for a cup of his favorite blend.
Later Spendy meets up with friends for lunch at a local restaurant chain. On the way home from work, she runs into the store to pick up a few things for supper, along with a magazine that catches her eye and a soda for the drive home.
With the exception of lunch and the groceries, Spendy never spends more than a few dollars. But the total for the day is at least $20. That amounts to more than $100 a week for a grand total of over $5,000 per year. Cut it in half and Spendy saves $2500 a year.
Find ways to reduce expenses to an acceptable level.
Your first reaction might be to give something up entirely. While sacrifice can help you get results fast, a more moderate approach is usually more successful.
Instead of giving up the soda and snack item you buy at work every day, buy them in bulk and on sale, and take them to work with you.
Maintaining a leak-free budget is a never-ending job. With practice you learn to spot trouble at the first drip instead of when the pipes burst and you have a mess to clean up. Consider becoming a member of Georgia CA$H. There’s no charge for the quarterly newsletter.
Questions??? Call me in Columbus at 706.653.4200 or e-mail the Columbus Extension office at firstname.lastname@example.org.
By Joanne S. Cavis, CFCS
UGA Cooperative Extension
Family and Consumer Sciences information to inspire you to save money while you engage in Life-Long-Learning . . .