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Log daily expenses and you have taken an easy step toward saving more. You can log daily expenses manually or with computer software like Quicken or Microsoft Money . The following article is based on You CAN Retire Young by Larry Ferstenou, Chapter 8.
One Easy Step to Saving MoreBy Larry FerstenouBased on You CAN Retire Young
If you aren’t already doing so, and most people aren’t, you can save more money and improve your future financial position by first finding out how much you are currently spending and where you are spending it. This can easily be done by tracking your expenses. You can use a computer and software like Quicken or Microsoft Money, you can use a small notebook and enter expenses into a spreadsheet, or you can easily do it all by hand on a sheet of paper.
To do the latter, draw columns and enter rent/mortgage, groceries, dining out, utilities, insurance, gas (auto) and so on across the top of the sheet in those columns. Then write each day of the week or month down the left side, leaving a row to total everything at the bottom.
Sample Expense Tracking Form
Record your daily expenses under each appropriate category so you only have to total the columns at the end of the week or month (whichever you prefer). Always get receipts so you can remember multiple purchases at the end of the day. Accuracy is important so you can analyze where your money is going. And remember, the less you spend, the easier this project is! To get a jump on tracking expenses, go through your checkbook and credit card receipts and record your main expenses for the past 6 to 12 months. Obviously that won’t include all of your expenses because you’ve probably used cash for many purchases, but it will be a start.
At the end of each week or month, total the expenses in each column. If you never tracked expenses, and if you do it right, you will be amazed at how much money you spend and in what different categories you spend it. This can be fun as well as enlightening. Once you know how much you spend and where you spend it, you can take control, concentrate on cutting expenses, and increase your savings percentage. Tracking expenses, together with a newfound philosophy on saving money, can be your guide to meeting future financial goals.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Larry Ferstenou retired over ten years ago at age 42 and is the author of You CAN Retire Young: How to Retire in Your 40s or 50s Without Being Rich (American Book Business Press, 2002). More information can be found at www.youcanretireyoung.com. Copyright © Larry A. Ferstenou, 2002–2003.
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