Apr 13 2009
Step Into a Budget: Thirty-days of Spending
The past few weeks I have been talking about living within your means as well as living
below your means. For those of you who are needing to reduce your debt load, and even for those who may not have debt but feel like they could be spending money more wisely, I suggested completing a thirty-day spending analysis.
Purpose of Thirty-day Spending Analysis:
- Recognize what most of your spending habits are
- Begin the habit of tracking expenses daily
- Find places where changes can be made
Materials:
- notecards for each family member
- writing utensils
- calculator or spreadsheet program
Procedures:
Step 1: Have each family member place a notecard and a writing utensil in their purse or wallet.
Step 2: Explain that everyone needs to take out the notecard and record ANY purchases made - no matter how small or how big. Don’t stop doing anything you would normally do during this time. Make sure each purchase is dated.
Step 3: As each notecard is filled up, have family members place them in an envelope located in a central location.
Step 4: At the end of 30-days make a comprehensive list of all expenditures for the month, either on paper or in a spreadsheet program.
Step 5: Note by each item what general category it can be put into - groceries, gas, entertainment, etc.
Step 6: Add up all expenses by category.
Step 7: Determine the order of importance for each category within your budget - for example the mortgage category would be more important than the entertainment category.
Step 8: Find the total amount of spending for all categories, as well as the total amount of income for the month.
Step 9: Subtract your total expenses from your total income.
Step 10:
A: If there is less income than expenses — Starting with the bottom category (least important) determine what expenses can be cut. As you find places to cut, keep a running total so you can check your progress against your deficit.
B: If you’ve cut every expense you think you can — You can’t continue to spend more than you bring in. The only option is to find a way to bring more income. If bringing more income isn’t an option, then you may need to take another look at your spending list and make more drastic cuts.
C: If your expenses are slightly less or equal to your income: Congratulations! That means you are living within your means. Now you can work towards living below your means!
Okay, so now what? You’ve completed your look into your spending habits. How can you go forward? You can now use that information to help you in setting up a budget.
Over the next week I will be discussing various possible budget programs and philosophies. Stay tuned! 
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Photo Credit: Luismi 1985
This is a great idea. I have heard of this type of activity many times. I just need to stop procrastinating and do it.
@Janell07 - Procrastination - the budget killer.
Seriously though, this is a good way to get a handle on your current financial health - a good thing for anyone to do.
My biggest indulglence is books. Can I live without them? When they’re cheap, I just indulge in more books. Is there hope for me?
Laughing. Maxie
This next weekend is my 40th reunion and this will be the first time I have attended one since high school. In high school I felt like the biggest ZERO on the planet, but have wanted to go back and “show them” that I actually am more than a zero. My daughter gave me a very nice gift from SAKS for Christmas but it did not look right on me. I took it back and have been getting some very nice items that I really need with the gift card given in exchange for the gift.
Today I went to see if I could find something for this trip back to my hometown in Ohio and planned to use some of the remaining $50. However, I found a blouse on sale that was regularly $169 for under $100. This blouse was a high ten on the scale of 1-10. I am not used to denying myself anything reasonable that hits a 9-10, but this was an over-the-top 10 since that is only how high the scale goes. But when tax and everything was added, it turned out to be $111. I only have $50 to spend and could have justified spending $10 more dollars even though every last dollar is counting these days.
I actually walked away from the blouse. I still want it and have it on hold, but I walked away. If there is a way I can get it, I will, but not for $111 dollars.
I need to live within our means and this was a tough choice.
Thanks for listening.
@maxiegirl - I hear you on the books.
If it weren’t for the library and the internet, I don’t know what I’d do. 
@lynnrd — Go Mom!
I know how difficult a decision that was for you to pass the sweater up. I’m very proud, and I bet your DH is very proud as well. 