Write It Down

Pad and Pencil

After getting rid of all but one of your credit cards, the next step is to start keeping track of where your money is going. It may seem silly, but you’ll be shocked at what you’re wasting money on every day. Once you’ve seen this, you’ll be fired up to stop throwing money away.

Go to any discount store and purchase a small notepad. The 3×5 sized ones you can easily fit in your shirt pocket if you’re a man, or your purse if you’re a woman. Every single thing you spend money on, write it down. A pack of gum or a pair of shoes. Fifty cents or a hundred bucks, write it down. At the end of every day, total up what you’ve spent money on. I’ll bet after just one day you’ll already be surprised at how much you spend and what it’s for. Have you ever asked yourself, “Where does my money go?” Well, now you’ll know.

At the end of every month total up what you’ve spent money on by category. Food, entertainment, utilities, etc. You’ll be in for a shock, but it will help you cut out what you don’t need. You may think stopping for coffee and a donut on the way to work is no big deal because it’s only $3.00. But when you realize that by doing that every work day you’re spending $60.00 a month, it will seem like a big deal. Or maybe you don’t see the harm in $60.00 a month. Doesn’t seem like a whole lot, you’re probably thinking. But if you instead invest that $60 a month in a decent mutual fund from age 25-65, that sixty bucks a month will turn into almost $465,000! All of a sudden that coffee and donut don’t seem so tasty, do they?

This is just one example you’ll see where you’re wasting money and I’m sure you’ll want to stop it. When you see how much you’re spending on utilities, you may want to cut back on cable, cell phone service or just go around the house and turn off lights and adjust the thermostat. After all, a few bucks saved can be invested or thrown towards a debt you want to pay off. This is literally a time when a penny saved is a penny earned!