Chapter 4 | What Are You Spending?
It’s absolutely essential that you are completely honest with yourself about how much you spend and what you spend it on.
You need it in order to make a careful and honest evaluation of your outgoing funds.
You have two ways to free up money for your financial goals: making more or spending less.
(Find out whether your employer offers direct deposit, You’re more likely to save than spend if you use this feature.)
What Are You Spending Every Day?
You either report what you spent last week — day by day, expense by expense — or you start fresh this week and record every expenditure going forward.
What Are Your Monthly Expenses?
You’ll want to go back through your receipts, checkbook register, and bank statements, and also use your memory.
To more quickly get a clear picture of your monthly expenses, dig out your bank statements, checkbook register, receipts, and so on. If you use online banking, go back through the electronic register of your transactions.
Prioritizing Which Items You Want to Spend Money On
Have a list of your expenses by category, with a priority attached to each one.
You are the only one who can determine your priorities.
Remember also, while you’re making these hard choices, that your goal here isn’t to make your life less enjoyable. Instead, it’s to find a path to realizing your dreams. Such a path may require you to make some sacrifices in the present in order to reach your goals in the future.
Occasional Splurges
So does keeping to a budget mean you can never go out for dinner again or spend a romantic weekend in a nice resort hotel? No, of course not. It just means that you need to budget for these things.
Look for ways to splurge but without necessarily spending as much money.
There’s nothing wrong with spending money to enjoy yourself — provided that this is what you want to do and that you’ve included it in your budget.
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