I’ve referred to my shopping budget several times on this blog, and I’ve received a few requests to share more about my budget planning process. So, that’s what I’ll do today.
At the start of 2011, I decided to take a closer look at where my money goes. You see, I am a fan of shows like the Suze Orman show and Til Debt Do Us Part, which both recommend that we be able to account for every dollar we spend. At the start of the new year, I decided to do just that and the results were shocking! I was spending a lot more money on clothing and eating out (among other things) than I thought I was.
Things had to change. To track my spending, I started using an excel spreadsheet from Debt Free Adventure and personalized it to suit my lifestyle. In this spreadsheet, I have a category for everything that I spend money on from fixed expenses to variable expenses. I set a projected spending amount for each category (clothing, dining out, health care, entertainment, and so on) and keep a running tally of my actual spending in each category. At the end of the month, I want my actual spending to be equal to or less than my projected spending.
|Snapshot of the budget template from Debt Free Adventure|
I’ve become very committed to this process. As soon as I can, I enter any amount that I spend in the relevant cell, even if it is a pack of gum at CVS. A few months ago, I spotted a White Haute Watch Find at TJ Maxx, but I waited until the next month to purchase it because I’d already maxed my clothing budget for that month. Now, I have made adjustments to other categories to free up cash for special clothing purchases, but that’s rarely necessary.
Tracking my spending in this manner took some getting used to. It also took about two months for me to establish realistic goals in terms of projected spending. But, now that I have the hang of things, I enjoy knowing exactly where I stand financially at every moment in a month and also meeting these short-term financial goals.
If you’re looking for a method to track your spending, try this approach. If you have an alternative approach, please share.