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Many people have a small book in their car or purse and they jot down smaller expenses to keep track of them. I applaud these folks but, for some, this is not workable.
A few days ago, I heard of another method - use your kitchen or office calendar to mark down expenses as they happen - coffee runs, clothing, movie rentals, take-out food. This way, not only can you see how much spending you are doing but you can also see when it is happening. You can get a good snapshot of the month and how much is going down the drain.
Every one of us has wasted money. You’ve bought the wrong car, spent money eating out when you can’t afford it, paid too much for insurance, paid big time on credit cards, thrown out food and have a closet with items that you never wear. Being frugal is making the best of the resources you have now and in the future.
You’ll probably goof in the future. Learn from those mistakes and move on.
♫ “Out on the road today, I saw a ‘Deadhead’ sticker on a Cadillac.
A little voice inside my head said, “Don’t look back. You can never look back.” ♫
~ Don Henley
If you try to take up too many of the frugal suggestions in this blog or any blog, you may only do them a few times before giving up entirely. To avoid frugal burnout, add a few suggestions each week to your routine and build up your lifestyle changes on a gradient basis. Perhaps this week, you will turn down your thermostat at night and check the sales flyer as you enter the grocery store. Make them a habit.
I worked on a contract job in the nineties. I knew the contract was up in the fall so I looked for - and set up - another job. Yet a few others who worked on the same contract waited until the day it was finished and then threw up their hands in surprise that they didn’t have work. I puzzled over that for many years.
I heard a financial advisor on the radio today and he said that some people wait for the bird to suddenly die and fall out of the sky and land on their porch. Other people go out hunting.
Which one are you? Waiting for opportunity to knock or going out and creating your future?
What does that mean? If life isn’t happening the way you want, do something – however small – to get it going in the direction you’d like it to go. Put aside even $25 a week as a cushion. Make yourself more hirable. Look sharp, be on time and do the best job you can. If you have a business, promote like crazy.
Be proactive.
If you’re lucky your children will grow up to be rich and never have to worry about money. And if you’re really lucky they’ll support you in your old age.
For the rest of us it’s worth passing on some sense of how to handle money to our kids. I remember when I was young it was thought that you should work hard and learn the value of a dollar. I did. Recently I found out that the dollar is now worth about 35 cents.
We’re faced with a situation where the value of our currency is going down and incomes for the most part are a bit stagnant. For this reason we need to be even more clever with the money we earn. And this should be passed on to our kids.
We always had paper routes or some such part time job when we were kids. Our allowance was 25 cents a week, or not at all. Our mother was a single mom with 4 kids so not always a lot of extra money to go around. We earned our own spending money.
Every dollar your kids earn as their own spending money is one extra dollar you can use to pay down a bill, or save for a better car, or whatever is needed to maintain a decent standard of living.
Teach your kids to earn their own spending money, and to handle it well, and everyone wins.
-Phil
Sometimes we get into a rut in our financial thinking. If you change, it means you were doing something wrong, right? You really don’t want anyone saying, “I told you so.”
Wisebread has done a marvelous listing of the top 100 Personal Financial Blogs. If you look on the right-hand side of this chart, you can view the latest article from that blogger. Some of the articles are a little dry but you can just skip past those ones. Get inspired.
Maybe you’ve tried some frugal tips. You’ve changed your lightbulbs to CFLs. You’ve trimmed your food budget. You’re taking shorter showers. But you’re still treading water making minimum payments on credit cards or just barely hanging on.
Some people aren’t willing to take serious steps to change their situation. Think big changes. Sell one of the two cars or go car-less and try car sharing. Sell your too-expensive house or move into a cheaper rental. Rent out a room. Work opposite shifts to your significant other to avoid childcare costs. Dump the cable, sell the TV and get a second job. Start eating meatless meals half of the week.
Be brave.
A friend of mine and I were discussing the difference between planning and plain ol’ budgeting. She said she knew a guy who plunked his expenses weekly into a Quicken program and figured he was doing financial planning. Uh, nope. That would be categorized under record keeping.
Here are a few definitions on Financial Planning with their accompanying links:
- In general usage, a financial plan can be a budget, a plan for spending and saving future income. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. …
en.wikipedia.org/wiki/Financial_Planning
- Comprehensive strategy to integrate an individual’s or family’s financial goals, including risk management, investments, tax planning …
www.frbatlanta.org/invoke.cfm
- A coordinated process for identifying, planning for, and meeting goals related to financial needs for individuals, families, and small businesses.
www.woodmen.org/inside.cfm
- A process of money management that may include any or all of several strategies, including budgeting, tax planning, insurance, retirement and estate planning, and investment strategies. …
www.mcgeenet.com/glossary.aspx
Above, I’ve deleted the business-related ones. Essentially, rather than looking into the PAST and what you have spent (which is a good start), you want to plan for the FUTURE. Where are you now and where do you want to be? What are the steps that you need to take to get there? First, you need to know where your money is going. Frugal Village has a great budget worksheet here. But understand the difference. Do the worksheet and then write down your goals. Then write a program so that you can achieve those goals.
Formula: The amount of wasted money one has is directly proportional to the degree of disorganization one has.
I guarantee that if I look at someone’s office, home office, kitchen, bedroom, or whatever, and it’s a mess, then they are wasting more money than someone who has maintained an orderly environment.
To save money one has to know where it is being wasted. To do that one needs to be organized enough to be able to see the wastage in whatever level of confusion their life may be in.
So, start by cleaning your desk, if necessary. Then clean and organize your office, then kitchen, etc. If these spaces are already tidy I would bet you’re already staying on top of wasted expenses a whole lot more than those that aren’t. Once you’ve tidied up your life, then you can put in some organization that will help you track where your money is going. From there it’s an easy step to figuring out where you can save.
-Phil
Last week, I wrote a blog post about perseverance and success. My brother, Phil, wrote me an email when he read it over:
On your previous post, I agree that perseverance is important, but the other half of the equation is training/education. You look at anyone who is successful and they really ‘know’ their stuff. They immerse themselves in learning everything they can about their product or service until they know it so well they could then teach others.
True. When I started the Aquafit course in February, I was an water fitness klutz. Couldn’t coordinate in the water. Teach? Egad! I went to a class a week ago and I was easily doing the exercises. I have a long way to go in terms of teaching with ease and competence, but I’m on the way. I’ve had to learn a pile of material including anatomy (muscles, joints, tendons), water properties and co-ordinating a class.
Learn and practice.
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