Back to the present. Tax season has passed. Whether you received a fat check from Uncle Sam or had to pony up some green, one thing is for sure – you want more money. Alas, a bonus or raise won’t materialize for most until the winter months. So how can the common man line his pockets with a little extra cash during the year?
Personal budgeting is essential to maintaining a healthy cash flow year round. The average American follows a pretty common two step process. Splurge then conserve. This is not an economical way to live.
Following tax day in my first full year of employment I began a 12-month assessment of personal expenditures. I kept every receipt for 365 days as well as an itemized log for every purchase – no matter how small. The following April I analyzed the results. A few key figures slapped me in the face.
Coffee - $2282
Lunch - $2100
Mobile Phone Surcharges - $275
As I triple checked my math I could only think one thing, disgust. I spent more on coffee that year that I did on clothing. More on fast-food than vacation. Frankly, it sucked. However, my little financial experiment yielded long term rewards – almost an additional $4000 pocketed the following year.
Two daily trips to Starbucks were replaced with a coffee pot and a thermos. Stale, overpriced food court pressata was replaced with butcher fresh bagged lunch. My co-workers thought my vintage Dunkin Donuts thermos was funny - I was laughing all the way to the bank.
Three years after my original experiment I still keep records of my expenditures. While not as meticulous as a daily log, there are no gaps or question marks in regard to how my money is spent. If you’re looking to save a little green this year, the first step is awareness. Write down what you spend for at least a week, preferably a month – the results might be just as surprising.
Get a personal budget worksheet from About.com
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