Dec 29 2008
Frugal Friday turned into Mundain Monday
Well, since I did not get around to posting my Frugal Friday post on well, um, Friday, I thought it would be important to start today. It’s a little crazy around the house with the holidays, plus I’m a little sick so technically Friday did not even exist in my mind.
The first thing to consider in a frugal relationship is how will you take control of the money. Will you share the responsibilities or will one person be “in charge.” In my house I keep the finances straight. It’s a little tough. We both have debt and student loans to account for. But by knowing where your money is going will allow you to get a good idea of how to begin a sensible spending plan.
First take all of your credit card statements, bank statements, cancelled checks, receipts, or any other item that shows an expense from the last two years. Go through these items with a fine toothed comb. This step is a little taxing but trust me it’s worth it. You will realize where your money is spent and how much money you need to budget a month. While you are going through the expenses make a category for each expense you find. Rent, Mortgage, Taxes, Electric, Pets, Medical, Christmas presents, Birthday Presents, etc. After dividing every expense into a different category total each column up and divide each column by 24. This will give you a definite dollar amount you need to allocate each month to that category, whether you are spending it each month or not.
I know Christmas only comes once a year, but if you allocate a little each month you will have your Christmas money at hand. The same goes with birthdays. If you keep the money allocated each month you will always have it.
This again is the first step in understanding your money. This will not magically erase debt but it is a great guideline to follow. After you analyze where your expenses are you can begin to see where your money is going and find ways to save. Next week we will talk about whether bankruptcy is a good option or not for a couple.
