Posted on February 7, 2008 at 12:53 am You say you know where your money goes and you don’t need it all written down to keep up with it? I issue you this challenge. Keep track of every penny you spend for one month and I do mean every penny.You will be shocked at what the itty-bitty expenses add up to. Take the total you spent on just one unnecessary item for the month, multiply it by 12 for months in a year and multiply the result by 5 to represent 5 years.That is how much you could have saved AND drawn interest on in just five years. That, my friend, is the very reason all of us need a budget.If we can get control of the small expenses that really don’t matter to the overall scheme of our lives, we can enjoy financial success.The little things really do count. Cutting what you spend on lunch from five dollars a day to three dollars a day on every work day in a five day work week saves $10 a week… $40 a month… $480 a year… $2400 in five years….plus interest.See what I mean… it really IS the little things and you still eat lunch everyday AND that was only one place to save money in your daily living without doing without one thing you really need. There are a lot of places to cut expenses if you look for them.   Set some specific long term and short term goals. There are no wrong answers here. If it’s important to you, then it’s important period.If you want to be able to make a down payment on a house, start a college fund for your kids, buy a sports car, take a vacation to Aruba… anything… then that is your goal and your reason to get a handle on your financial situation now.

Posted on September 23, 2008 at 11:42 am I do both. I budget money- what needs to be paid and when- It helps make sure I get my bills out on time. I also write down what I spend- to the penny- I only do this one week a month- it pretty much keeps me on track the rest of the weeks!

Posted on September 29, 2008 at 1:51 am KrisNY - I agree with you 100%.  I ran budgeting courses for long-term unemployed people in Australia, and I was constantly amazed at the people who budgeted for their rent, food and fuel expenses, but took no notice of what they spent on magazines, DVDs, snacks, lottery tickets etc.  I had one person who actually said to me "Is THAT why I never have any money left!" 

Posted on September 29, 2008 at 12:23 pm I work with people to help them get rid of their debt very quickly. Even though I can help them within their current budget as long as they have discretionary income, I frequently show people what it would do to their payoff time if they were able to increase their discretionary income by even $100 a month.  It is incredible how quickly you can pay things off when you have the right tools at your fingertips. 

Posted on September 29, 2008 at 8:01 pm This is an excellent point. My own budget is so tight it scares me sometimes. But I have to know where every cent is so that I know what I need to work on each day. I really is important to have a clear budget. I just wish more people would do this.

Posted on September 30, 2008 at 4:00 am I totally agree with you.It is small stuffs we do which costs us a lot. Our plans and spending has to be done in a necessary basis and spending the money lavishly is not affordable when we have long goals to achieve.

Posted on October 21, 2008 at 11:46 pm If you keep your books on Quicken, QBooks or any other accounting software and print out a year end profit and loss report, you can see where your money went.  You can even prepare budgets with these software products and then do a budget comparison report each month to see where you stand. At the end of the year, you can see your spending and make adjustments for the new year.  Find some simple software that works for you and use it to stay on top of your spending.

Posted on November 2, 2008 at 4:41 pm I'm too scared to do this and ask my husband to do it too. I know we are spending too much for what we earn, but I'm hoping a long lost relative will die and leave me lots of money. That's not very likely is it? In the meantime, maybe I'll have a go at keeping track of the pennies as they fly away from me. Or I could get a proper job. I'm a poet, I have a part time job which gets it $100 or so a month. The govt gives me money to look after our son. My husband earns (and spends) good money. I know what I should do, I'm just to scared to do it! Any advice?

Posted on November 3, 2008 at 5:58 pm I used to keep a tally in my head... which functioned much like the government. I knew where the break even point was, and I knew when I flew by it! I am hoping to get that corrected now though. 'Hoping' is the keyword.

Posted on November 4, 2008 at 6:55 pm I track every penny I earn or spend every day. I have been doing this for 5 years now. I set up a simple spread sheet on my computer and update it every night before I go to bed. It only takes about 2 minutes a day to enter all the data, the way I have it set up and I didn't have to spend $100 on some program.  I 1st started doing this because I was tired of not having and/or knowing where my money was going. It seemed a little neurotic at 1st, keeping track of every penny, but now I am so glad I do it. I have turned my financial life completely around in the past 5 years. I spend less, save more. Knowledge is power and I now have the power to be in control of my money, not the other way around. I highly recommend that everyone tracks their expenses at least weekly, if not daily. I think most people get into financial trouble because they are either too lazy or are too afraid to really know what is going on. Dollars are like teeth; if you ignore them, they will go away!