We’ve touched on tracking your expenses on a monthly basis to estimate how much you should realistically allocate to each category of your budget (food, housing, student loans/ debt, clothing, entertainment, etc…). In her book, The Money Book for the Young, Fabulous & Broke, (I know, laugh it up…!) Suze Orman offers a powerful tool to track your monthly expenses by category that will take the guess work out of it. The link to this PDF file is below.
If for some reason the link doesn’t work, go Orman’s website: http://www.suzeorman.com/igsbase/igstemplate.cfm?SRC=SP&SRCN=yfb1&GnavID=21&SnavID=59&TnavID= and search “cash flow worksheet.” This will download a document to track your income and expenses, and will let you visualize where your money flows each month (or each week, if you’d like).
This is a powerful tool to get a rein on your expenses or to observe your spending habits. If you’ve ever been on a diet and used (or heard of people using) food journals to track what they eat, you know that using this tool will make you think twice, if not seven times, before the next time you spend money on non-essentials. Just having to write it down makes a difference.
Rules accompany using this worksheet.
1) Be honest with yourself. Don’t curb your spending during the month you track your expenses. Don’t go spending crazy, either! The goal is to get a realistic and representative snapshot of your monthly spending habits.
2) Keep your receipts and file them away (if they’re debit or credit card purchases). I keep all my receipts and file them by month, anyway. This makes it easy to find a receipt for an electronic item that broke (a phone, or an iPod, for example) and will help take the stress out of proving a warranty that’s still in effect. Just a thought…
3) Take action once you’ve recorded your expenses by category! Create a monthly budget! Aim to NOT meet the budgeted dollar amount allocated to some items. I’m not recommending deprivation. I’m just recommending reining in expenses so that you can do more responsible things with that money! And trust me, we’ll get into allocating responsibly in the weeks to come.
No comments:
Post a Comment