Wednesday, November 16, 2011

Log those expenses!

Now that you have taken your Day Vacation, the next thing you need to do is know what you actually spend money on. A simple notebook will do and  every time you spend money on something, log the date, what you spent money on and how much. While a tedious project for sure, it is also a necessary one and you need to keep track of it for a whole month. I actually do this every month so I have a whole year I can reflect on and make monthly averages as a whole year of logged expenses gives you a great understanding of your spending  habits.

One month of expenses however is enough to get you started at reviewing and understanding your financial situation. Comparing your expenses to your income gives us the stepping stones we need for direction and clues us in on problem areas we can cut back on. If you have a spouse that also spends money make sure they bring home  receipts for you or know in detail how much and what they spent on they can inform you of, so it can get logged.

Many people in the extreme poverty levels, use cash rather than check books or credit cards so it is important all those cash items get logged as you will not have proof of spending otherwise. A whole month is necessary in order to  give a full picture of spending patterns, so this is not an  item in which to get lazy on! It needs to be complete and accurate!