How to Set Up a Budget for Everyday Living
A cup of coffee on your morning break, a daily paper picked up at the newsstand, drinks after work with friends and suddenly you're hitting the ATM for another $20 in cash. Day after day these expenses add up to a hefty sum that you probably don't include in your monthly budget. If that sounds like you, then you had best set up a budget for everyday living for you and other members of the household. Then you'll know exactly where your money is going and how to save.
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Instructions
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Write down every purchase you make by cash in a notebook, or use a smart phone app. If you make an ATM withdrawal, that money has a tendency to dribble away without your knowing what you spent it on. Write down specifically what you purchased with a debit card, not just the amount.
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Keep track of credit card purchases for lunches, snacks and dinners.
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Keep track of money spent on entertainment, such as movies, bowling or drinks with friends.
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Note how much you spend on gasoline, or public transportation, each month or every time you fill up the car.
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Put all your grocery store receipts in an envelope for a month.
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Divide your purchases into food, transportation, grocery store, personal care products, personal services -- haircuts and nails -- entertainment, magazines and whatever other categories you feel are appropriate.
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Ask other members of the family to do the same thing.
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Total the purchases. Take a deep breath. It might come as a shock that you spend $50 a month on your daily bagel and cream cheese midmorning snack. Or that your son whizzes away nearly that much on soft drinks after school.
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Reduce the expenses where necessary. Reduce each category by a set amount, say 10 percent, or scrutinize each purchase to eliminate or reduce the expenses. Bring the bagel and cream cheese from home and you'll save $40 a month, for example. Batch your errands and you'll save five to 20 percent on transportation costs.
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Divide the reduced totals for each person by 30 days, or by 22 days, if they're expenses you incur only on work or school days. That's your new everyday living expense budget.
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Tips & Warnings
Give each adult member an envelope each week with their expense money. Use your judgment with children. Young children probably need to be given the money each day, while older children can manage with a weekly sum.
References
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Comments
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