Just like most of you, I'm looking for ways to increase my net worth and decrease expenses. I'm always scanning for ideas online. At one point in my life, I thought these gurus of ideas were onto something. One article suggested cutting out cable, I don't have cable. Another suggested, skipping the gym. I need the gym. I don't want to increase my health expenses because I'm crippled with disease. This other idea really made me laugh, 'wash with cold water'. Now really, do you think your water bill is the main thing that's keeping you from financial freedom. Some of the lists are downright extreme ! Don't give cards or gifts for birthdays? That would be a great idea, I guess, but its 2010. When was the last time you sent a card?
The one tip that so many "advisors" encourage us to do is to keep track of our budget. Where are we putting our money? I guess they want to tell you to cut out that morning cup of delicious fancy hot chocolate, the one with the extra sprinkles. The question is, where is your money really going?
We are fortunate enough to have a technology as a guide to helping us find the answer. There are loads of new apps and gadgets to track your expenses. I used to carry a notebook around with me documenting every water bottle I bought or every time I bought a bag of potato chips. Those things seemed great at the time, but at the end of the month all those little scribbles in my notebook meant nothing. I never did anything with those numbers except look at them.
I did a search online and found some great FREE budgeting software. Some may say, get an iPod and you can do it automatically. In the spirit of keeping costs down, I don't have an iPod. So now, at the end of the day when I get home I gather all of my receipts and I turn on my old laptop and document my expenditures. I can actually see where my money is going in percentages. I can see if I'm spending more on going to the grocery store or eating out. I can see percentages for entertainment vs building my business. Now, instead of writing on the back of an envelope or squeezing things in a notebook, I am able to get a visual on how much I'm spending and where my money is going.
Throw out those napkins and tiny notebooks! Do something that's environmentally conscious and convenient!
Check out these websites on how to get started:
I started with this family budget guide. If you want something that is relatively simple to use, but basic you can try this one:
Family Budget Planning Guide
I really like Outright! It's graphic and convenient. I documented the cashflow from my business and it immediately showed me in graphic form the profit and expenditures. This program is great! You can even add your own bookkeeper as an administrator. I believe this will take the hassle out of filing taxes to some degree.
I'm sure there are more ways to keep track of expenses, if you have any ideas please add them in the comments!