The one biggest mistake that a household can make is to operate with out a home budget.
I hear it all the time, you say you know where your money goes and you don’t need it all written down to keep up with it?
So I issue you this challenge.
Challenge – Keep track of every cent you spend for one month
Yes, I do mean every cent.
Why you need a Home Budget
Most people are shocked when that realize what the small expenses add up to.
Take the total you spent on just one unnecessary item for the week, multiply it by 52 for the weeks in a year and if you want to really hurt yourself multiply the result by 5 to represent 5 years.
For instance I have a friend that gets a Coffee every single day.
He spends $7 per day on this coffee, average of $42 per week, for a TOTAL $2184 per year. He complains that he can’t get ahead.
Do it for just one unnecessary expense, and that is how much you could have saved AND drawn interest on in just one year
That, my friends, is the very reason all of us need a budget.
Controlling your spending
If we can get control of the small expenses that really don’t matter to the overall scheme of our lives, we can enjoy financial success. When it comes right down to it, the little things really do count.
Cutting what you spend on lunch from 10 dollars a day to 5 dollars a day on every work day. So in a five day work week saves $25 a week… $100 a month… $1300 a year… $6500 in five years….plus interest.
Little things matter
See what I mean… it really IS the little things. Don’t worry you still eat lunch everyday AND that was only one place to save money in your daily living. All without doing without one thing you really need.
There will be a lot of places to cut expenses if you look for them from your home budget.
When you sit down to set your home budget, make sure you set some specific long term and short term goals.
There are no wrong answers here. If it’s important to you, then it’s important period.
If you want to be able to make a deposit payment on a house, start a Uni fund for your kids, buy a sports car, take a vacation to Aruba… anything…
Then that is your goal and your reason to get a handle on your financial situation now.
