Tuesday, December 29, 2009

2010 Beginning Challenge!

So, the first thing I want to challenge everyone to do for 2010 to help get a hold on your finances is to start tracking your money. EVERY PENNY including debit card and cash should be tracked... this way, you can see how much of your money is going where!

There are a couple of ways you can choose to do this, but how far you go with it is up to you. The old fashioned way is to keep a small notebook in your wallet and write down every time you spend money. For example:

1/1/09 $2.97 Starbucks Hot Chocolate
1/1/09 $54.75 Groceries at Smiths
1/1/09 $32.38 Gas at Chevron
1/1/09 $1.29 Icee at Chevron

You get the hint! Tracking your money this way helps you see what you are spending on and at the end of a month you can divide it into categories, add it up and see how much you spent on each thing. You would be really surprised how much money you chose to spend on frivolous things!

Now, the extra mile works even better. Most home computers come with some kind of money tracking software. You may have Quicken or Microsoft Money. Any version will work... and it doesn't matter if it is an old one! What I love about this kind of software is that you can set up categories such as gas, mortgage, groceries, eating out, etc., (the more specific the better), and at the end of the month you can run reports where it shows you how much and what percent of your income you are spending on each category.

An important thing about using this software is to first set up how much you have in each of your bank accounts and then to record every deduction and every expenditure. Just knowing you are going to be accountable will sometimes help you spend less! Anyway, this will be a great start to 2010 because it will help you keep it on your mind and be more responsible for your money.

If you don't have any software on your computer, Quicken offers a free online money management tool. It has been rated a top pick on Money Magazine, received an Editors Choice Award from PC Magazine, and was picked the best budgeting site by Kiplingers Magazine. Just click HERE to get started on Mint.com. They can "download and categorize your balances and transactions automatically every day--making it effortless to see graphs of your spending, income, balances and net worth." Give it a try!

Do you have a favorite way of tracking money? Please comment and share. :)


Emma said...

Tim and I have been using Quicken. I was hesitant at first but Tim fought for it. I'm so glad I let him win this one. In the past year we have paid off a credit card, our car and our TV (I'm embarrassed to say we bought a TV on credit - it's a long story - at least it was no interest). By the end of Feb we will have another credit card paid off and we will be well on our way to me staying at home with the kiddos and into a house! However you do it, work together and have a game plan. Talk about what you want vs need and make some cut backs where you can. Every little bit adds up.

Higleys said...

We were just thinking of that. I know I spend less and when I have to account I don't buy as much junk cause I get to embarrassed to have to admit it. Good for the pocketbook and waistline:)

MaryBeth said...

Rick and I use an online system called Mvelopes (www.mvelopes.com). It has literally saved us. We've gone from over 50,000 in credit card card debt to none in just about five years. We used to have to take pay day advances through the bank and the fees for that were shocking, but tracking our money has stopped that.

As far as the frugality of it, it does cost us $40 every three months to have this program, but the money that we've saved as a result more than pays for it, so we feel justified in spending it.

R Clan said...

I always try to do something like this but I just have a hard time sticking to it. If I could get hubby to help out with this it would make things a whole lot easier. I just need my whole life to get in order. I really am trying to figure out the Happiness project as well. This would definitely have to be one of them.