Authored by Abigail Beal in Personal Finance
Published on 01-08-2009
With a tough economy, just about everyone is adjusting their budgets. People are making their dollars work longer and harder. One of the toughest things is discovering that you are doing things that are hurting your budget.
Some things are sort of obvious. If you constantly eat lunch out or get fancy coffee drinks, you probably already know this isn’t good for your budget. The same would be said if you have a great fondness for Italian shoes. These are things you can easily cut from your budget and see improvement quickly. But what do you do when something else is hurting your budget?
The first step is to understand exactly where your money goes. For one week write down exactly every cent you spend in a little notebook. Carry this tiny notebook everywhere you go. If you buy a newspaper write that down. If you pay the mortgage write that down. Everything goes in the notebook. At the end of the week you’ll have a better idea of not just where you think your money goes — but where it actually does go.
Now that you have a record of your spending, examine it honestly. What seems out of kilter to you? There are many things in your budget that you can “shape up” and see some improvement. If you belong to a movie rental service — that is at least $10 a month or $120 a year. But if you rent movies from Redbox that is just $1 per rental and you can see the latest movies. That is a great savings and you can easily find Redbox at the supermarket. While it looks like “just $10″ a month, those little charges can add up.
Look at your monthly charges to see if you can improve any of those. Perhaps you can change your telephone service or other types of services. You may be able to switch to a lower interest rate credit card. Improving some of your monthly services can mean big dollars put right back in your pocket.
Are there any things that you are paying for that you are just not using. Any magazines that you subscribe to that you just aren’t reading? Do you belong to a gym that you don’t go to? Do you belong to clubs or associations that you don’t enjoy anymore? In some cases you may be “locked in” for a yearly rate — like for a club membership — but deciding to cancel now can only improve your budget for the future.
What have you noticed about your spending habits? Are you buying necessities at the last minute and spending too much for them? Do you like to eat out on certain days? Could you shop at a cheaper supermarket or learn to clip coupons? Coupons can be very useful, especially if you purchase many of the same items frequently. Visit the product’s website and often you can find a coupon for the product available there.