Get a small notebook to take with you. In it write down everything you buy for at least a month. Up to three months if you'd like. I was shocked to see how much our family spent on little stuff like vending machine purchases and magazines. I found that most of our money wasn't being spent on big things, but the little, "Oh, what's three dollars here or there."
After your time period is up, analyze your spending patterns. Put all your purchases in categories like groceries, entertainment, etc.
Now separate those categories into two categories: Fixed Expenses and Variable Expenses. Fixed are things like Rent and Insurance. The variable expenses are all those that you have in your power to change like groceries, utilities, and clothing.
Add up all the expenses in each of the categories. Write down the totals for each, i.e. Phone: $58 a month
Add up all your income for the month. Then add up all your fixed expenses. Subtract your fixed expenses from your income. Income: 3,000 - 2,100 fixed expenses = $900 The result is what you have left for variable expenses.
Now you can spread the leftover money into your other categories. Keep in mind yearly expenses like taxes. Consider putting 10% into savings. Take a look at where you can cut down. Enter the amount you have decided to spend in each category on your budget worksheet. And now you have a sanity saving budget.
Keep track monthly of what you spend in each category. I use Quicken to do that. Readjust your budget if you need to. Only you know where your spending priorities are.
Beth Dargis is a life and career coach who works with stressed-out people to help them achieve peace, balance ,and purpose.© 2003 Beth Dargis
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