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Live On Less Money






Where Does All the Money Go?

You can't begin to get your monthly expenses under control until you really know how much money you are spending, and what you are spending it on. Most of us think that we have a pretty good idea how we spend our money, but have you really sat down and tracked it?


You aren't really going to come to terms with your spending habits until you see them in front of you in cold black and white (and maybe red!) You may not realize how those small expenditures are adding up, or you may be shocked to see what percentage of your income is going to pay for a few big expenses.


Track Your Expenses

The only way to really see where the money goes is to track every single penny that you spend. You don't have to do it forever, but you probably need to be fairly meticulous about it for at least a few months to get a real handle on where the money is going.


So, get yourself a shoe box for your receipts and a little notebook to carry with you where you can make a note every time you spend cash. And don't fall into the trap of thinking that it's too insignificant to "count"... every penny counts in this exercise!


At the end of the month, tally up your spending into different categories. The categories can be whatever makes sense for you, but some standard ones include housing, transportation, communications, food, entertainment, childcare, etc. Since we're trying to track spending habits, you need to count anything you charge to a credit card as an expense (even though you haven't really paid for it until you pay the credit card bill). If you have outstanding debt, you also need to count payments toward those bills. We've created a simple spreadsheet that you can download to help you in this process.


Once you see what you are really spending your money on, it will become much easier to find places where you can cut back.




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