How do you decrease your expenses?

Question  How do you decrease your expenses?

Answer  Cut down on your spending. A skit on Saturday Night Live makes the point very well. In this “commercial parody, a married couple are confused by their money woes, so a spokesperson presents them with Don’t Buy Stuff You Cannot Afford, a guide to prevent financial debt. [Season 31, 2006].”6  

Don’t Buy Stuff You Cannot Afford

Complete Answer   Other than income taxes, you get to decide what and how much you spend. In order to get control of your spending, the first thing you need to do is to know what and how much you are spending. You need to “Track Your Spending”. For example: How much does it really cost to “Take you out to the ol’ ball game?” It will include of course the cost of the tickets. Add to that parking, “peanuts and Cracker Jacks”, and a souvenir baseball cap so you can “root, root, root for the home team”.

There are a number of ways to track your spending. You may be naturally talented at remembering numbers. Great, that will save you a lot time if you don’t have to write things down. For the rest of us:

  • Some people carry around with them a small notebook to record their expenses.
  • Combining a debit card with a checking account is another way of keeping track of your spending.
  • There are a number of apps available for your smart phone that you can use to record your expenses.

Use whatever method or one that you make up, that works best for you. The important thing is that at the end of the month, you know exactly what and how much money you spent. Granted it’s a bit daunting and tedious, but with fortitude7 and a little practice you’ll become quite proficient. I starting by recording my spending in a small notebook. Gradually I progressed to using a spreadsheet on my desktop computer.

Helpful hints: You will have/receive a written record for most transactions; cash or credit card receipts, checks, and bill payment coupons. Most stores will offer a receipt if requested. For those few transactions with no written record; parking meter, vending machine purchases, or coin-operated laundry for example, make a mental note and record it when you have a chance. For those occasions that will involve a number and variety of transactions, attending a church festival or a day at the races with friends for example, count your money before you go and when you come back, the difference is what you spent. Will there be transactions you miss or amounts you couldn’t remember? Yes. Don’t fret, you will get another chance to be more accurate the next day and next month. I find it helpful to make it a daily routine to record my financial transactions from the previous day.

Financial Literacy Knowledge/Skill

Track your spending.

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Next Week’s Topic:  Where are you spending too much money?