Challenge Week 1: Plug the Small Leaks!
Controlling your money flow starts with a good review of your spending habits. So our first challenge is to take a few minutes to review your spending habits. You can do this by looking at your debit card transactions on your online statement or other spending records such as your check register and/or receipts.
Look back over the last few weeks, then write down the 2-3 things that you could have done without, answer our online and post a comment on what you discovered. Here are a few examples to get your started:
- New pair of sneakers
- Music downloads
- New purse
- Eating out
Remember what Benjamin Franklin once said, “Beware of little expenses, a small leak will sink a great ship.”
Don’t forget to post a comment about what you found right here on One For Your Money to be entered for a chance to win a $25 gift card!
What’s the Difference between a Want and a Need?
When reviewing your spending, it’s helpful to consider the differences between real needs and wants. When you think about it, people really only need four things to survive: shelter, enough food and water to remain healthy, basic health care and hygiene items; and just enough clothing to remain comfortable and warm. Everything beyond that is a want.
But let’s face it, few if any of us want to live that frugally, and good money management doesn’t mean that you have to deprive yourself of all the things you may desire. It’s really about finding the right balance between what you want to spend your money on and what you can afford after you have taken care of your basic needs. Everyone has different goals and priorities, so what works for you may not work for someone else. Asking yourself some of these questions may help:
- What are the things that I never regret spending money on?
- What are the things that would be nice to have, but really are not that important to me?
- What are my fixed expenses each month such as rent, car payments, health and car insurance, or cell phone charges?
- Is there a way to decrease my fixed expenses each month (i.e. lower cost cell phone contract) so I have more money for saving and/or spending on the things I really enjoy?
- How can I reduce the amount I spend on groceries each week and still maintain a healthy diet?
- Are there ways to reduce my commuting costs (i.e. take the bus, ride-share)?
- What is the amount I can comfortably afford to spend each month on eating out and/or entertainment?
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