FINANCIAL LITERACY - SPENDING JOURNAL

I'm not a money expert, or a financial advisor. The ideas I'm sharing are just a synthesis of things I've learned and try to stick to. 

Keep a spending journal. In addition to figuring out your monthly "nut" (see my lat post) its important to know Where the rest of your money is going. You might be surprised to see how quickly the little things add up, and how often you pay for things things that you don't really need. .

I use an ordinary spiral, lined notebook. And a pencil. I write down each purchase, no matter how small. .

A daily $2.00 coffee x five times a week = $10. That's $40 a month on coffee. That's $520 a year!
Buy a thermos, make your coffee at home, and use the savings to pay down your debt. Or fix a window sill. Or put it in a savings account. Or your kid's college fund. .

I use cash for almost everything, so its extra important for me to write things down each day. I forget where the money goes otherwise, and you probably do too. .

The first few months of my spending journal I taped receipts onto the page. It's good to know how much you spent at the grocery store. Even better to pay attention to what you are buying and how much it costs. .

Did you really need to buy a hardcover edition of a new book? Or the latest edition of a glossy magazine? Or that new pair of shoes? Maybe you did. Maybe you didn't. But you will be aware of how much they add to your weekly expenses. With that knowledge you can begin to make better choices and build a sustainable budget.