Happy New Year and welcome back to the Money Shot! Here's a great way to start off the year, plus two resources full of helpful info to start 2009 off right.
Principle #3: Keep Track of What You Spend for 30 Days
Get a pocket-sized notebook and carry it with you everywhere you go for 30 days. Keep meticulous track (yep, to the penny) of everything you spend each day for thirty days. Whether you pay cash, charge, or buy online, write the amount down in your notebook the moment you spend it. (If you don't do it immediately, you may forget.)
For now, don't worry about what you're going to do with this information--just make the list each day. Soon it will be clear how useful it is.
First, it will give you an idea of exactly how and where you spend your money. Secondly, you will be able to see your spending categories and the amount you spend in each category. Finally, you will understand where your money goes in a month.
Mrspao mentioned she had done this and found it helpful. When I did it, it gave me a real sense of empowerment as I'd always lived check to check and had never been able to answer that monthly and perpetual question, "Where does the money go?"
This one-month exercise gave me the tools--and the precise information--I needed to regain control of my finances. In this case, knowing was more than half the battle, and in just a few seconds a day, I had a very powerful instument with which to tackle my seemingly overwheming financial fears: the instrument of knowledge.
A Good Book
The 30-day spending record as described above comes from a book I used when I was first addressing my debt and spending issues. Titled How to Get Out of Debt, Stay Out of Debt, and Live Prosperously, I highly recommend it to anyone who has debt, spending challenges, or is interested in viewing their finances in a more positive light. Available in paperback new or used on Amazon for virutally free.
A Free Book
Suze Orman's 2009 Action Plan is available for free download through 11:59 p.m. CT on Thursday, January 15, 2009. It has really helpful, straight-forward, step-by-step information for tackling your credit-card debt, starting a savings program, and basically just dealing with finances in our 2009 economy. Also available in your local bookstore (or on Amazon), but if you hit the link before January 15 you can get it for free--it's 200+ pages of info.