If you have been less than successful at previous budgeting attempts, consider keeping a spending journal. Often the culprits of overspending are hidden in daily nickel-and-dime purchases. A Starbucks here. A trip to Target there. When we are able to reconstruct our spending over 4-8 weeks it allows us to see the big picture of where our money is going.
Recording With Your Cash Envelopes
Keep track of your spending by documenting cash purchases made with your envelope funds. When I was keeping a spending journal, I would save receipts for purchases right inside the respective envelope. At the end of the week, I’d have a few dollars and several receipts which could be tallied up and examined.
Recording Discretionary Spending
For most folks, this area of spending is where they are seeing the largest budget-busting activity. These are purchases that are not in any specific budgeting category, and may come from a “discretionary fund” you have. Resolve to keep a notepad with you to jot down all discretionary purchases. At the end of the month you can evaluate where your money is going and be mindful of spending traps. Moving on to month two, you will likely see improvements in all areas because you are more aware. Continue your journaling until you feel like you have all discretionary spending under control.
Another option. Consider eliminating this budget category altogether and instead assign every dollar a specific job. That doesn’t mean you can’t go to Target or Starbucks, but it does mean that all spending will be deducted from a specific category and will consequently give you less to spend later.
Have you ever kept a spending journal? Leave your thoughts in the comments!
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