“I want to get my spending under control”

I have been hearing this a lot for a New Year Resolution from my clients. There are several avenues you can go when looking at this, I am going to give you several strategies, then I want you to vote on the bottom as to which is your favorite and which you are most likely to stick to.

With all three choices what you first have to do is figure out what your spending a week on gas, groceries, shopping, eat outs, extras, contributions, gifts, pet care, walmart, perscriptions/co-pays. Please note, this does not include your bills that you pay, it is purely spending, this can also be found on your Financial Statement under Miscellanous Living. All three methods are set up with the same concept just applied differently. The key here is to start your money on Friday, this is very important, Do Not Start the spending on Mondays, reasoning for this is most spending activity is on the weekend, You get your gas tank filled and get the week’s worth of groceries and do whatever else has to be done, it is much easier to be “broke” during the week. Now if you have a big commute and fill up more than once per week you have to plan accordingly. If you start the week spending on Monday, you think you have plenty of money, then all of sudden it comes the weekend and you only have half left and the gas tank needs filling and groceries need to be bought and there is no room for fun. Trust me start it on Friday’s everyone will be happier.

Cash in the Envelope method
This is an easy one, Once you figure your spending, you withdraw that amount of cash from your account on Friday. When the money is gone the money is gone and you will have to wait until next Friday for more cash. Cash is also more tangible, if you want to really “feel” the money, get it out in 5’s or singles, counting out real money is harder than bringing out the plastic.

Money Tracker–This is a worksheet I came up years ago and for years my husband and I used it to keep us under control, but it also gave us flexibility since a positive/negative balance moves onto the next week. What we would do is have a worksheet with Friday thru thursday down the side(you can do this yourself on a piece of paper or the computer if you would like). We would put our spending amount on the left side under the date, this is what we start with, then on the right we write down everything we spent money on that day, we subtract that from what we started the day with and put it on the next day balance side, then we proceed through the week. Since this is ongoing, you can add to your total if you have extra or subtract if you go in the red. It is interesting to keep track and see exactly where your money is going and if there is a pattern in your spending.

D2D Money Calendar–The unique thing with this tool is that it helps attack debt as well, since all your money is accounted for, and all your extra money is applied towards debt at each paycheck as soon as all bills for that pay cycle are accounted for and spending money is set aside. So you will essentially be living paycheck to paycheck but with some really great results. Now what we do personally is we have a “cushion” that we always maintain so we never run our checking down to Zero. Also since we pay off our credit card each month, we know 30 days in advance what the bill will be, so we have have 30 days to cut back if we went over to make up for extra we may have spent the previous month.


~ by debt2dreams on January 7, 2009.

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