Budget Limbo: How Low Can You Go? Ways to Save Money


Does anybody else ever feel like any time you acquire a little extra money, you always have something come up that wipes out that extra savings? If you own a home or a car, I’m sure you can relate. After some expensive and unexpected expenditures this month, I’ve been inspired to play budget limbo. Basically this means that I will be going through every category in my budget and squeezing out every last cent that I can to see just how low I can get my budget to go. I try to view this process as a game as opposed to an exercise in deprivation. Squeezing out the excess is important to me because not only does it help when I have unexpected expenses, it allows me to do other things that I want to do, like pursuing my dream of working for myself or accruing extra money to start traveling again. Why give even an extra $5/month to the phone company if I can save that money and use it for something else more fun (or not fun, as the case may be)? This week, I’m going to concentrate on the groundwork; in the weeks to come I’ll have some more specific tips to save money.

This week, I have one tip. If you implement only one of the suggestions I make in this series, this should be the one: the best way to save money is to PAY ATTENTION. It’s really easy with direct-deposit and auto-pay to stop paying attention; resist the temptation. I know this seems like an obvious tip, but lack of attention is how a lot of people get into trouble with money. This is why the number one recommendation by money experts to those struggling financially is to keep a spending diary; it forces you to pay attention. Where is your money going? You might be surprised.

I don’t write everything down by hand but I do use Mint to import and categorize my transactions. It let’s me quickly see where I stand with my money. Not only does Mint have its web interface, there’s also an iPhone app that makes it easy to access your info while on the go. In addition to Mint, I use a spreadsheet that I complete each month as I pay my bills. At the end of the year, I average what I spent each month in each category and set that amount as the budget for next year. The spreadsheet makes it easy to spot glaring errors. If last month’s bill is half of this month’s, that’s cause for investigation. Maybe there’s an error on the part of the billing company or maybe it indicates something going on with your home. For example, if your water bill is twice what it usually is, you probably have a leak you need to find. Not only does this spreadsheet help me know what I’m spending, it also helps me keep up with paying my bills. If there’s not a number on the sheet for this month, that means the bill hasn’t been paid. This is especially helpful since I’ve opted out of receiving paper bills. I keep my budget in Google Docs so it’s easy to access anywhere, but you could also use Excel or any other spreadsheet program. Here’s a template to get you started.

Beyond tracking your money, just pay attention to where your weaknesses are. How are you wasteful with your money? Maybe it’s being lazy and getting takeout after a long day, maybe it’s forgetting to take the clothes out of the dryer and restarting it multiple times to get the wrinkles out (both weaknesses of mine). Find ways to eliminate those holes – like making food ahead and freezing it for easy prep or setting a timer to remind yourself to fold the laundry.

Homework for this week: pay attention to your money. If you don’t already track your spending, start. Figure out how much money you are bringing in each month and how much you are spending. Create a budget; compare this month’s bills to last month’s bills. Where do you stand financially? Are you spending a lot of money on things you didn’t realize you were?

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