When you sit down and actually record where your money goes, there are always surprises. More money may be going to food and other expenses than you think. There may be areas in which you can easily cut corners that you won’t see until it’s in writing. Rather than sitting down and deciding how much of your income “should” go to expenses such as food, clothes, entertainment, savings, etc., keep track of where the money is actually going. Using a simple pad of paper, write down everything that you and the other members of your family spend money on every day. Do it for a full month.
After a month of tracking all expenses, add up the total expenses of each category. You can decide how specific you want to get. Standard expense items are:
- Housing (rent/mortgage)
- Utilities
- Telephone
- Medical/Dental Insurance
- Auto expenses
- Food
- Clothing
- Housewares
- Personal care
- Child/adult care
- Education
- Savings
- Debt repayment
- Entertainment
- Gifts
- Contributions
- Miscellaneous
With the numbers in front of you, you can create a spending plan. If you feel you are allocating too much towards one category and not enough toward others, see what you can do to change that. Continue keeping records until you feel the situation is exactly the way you’d like it to be.
Blog contributed by CU Content
