Create a Household Budget

Before you  can curb your spending, you have to know where your money is going.  A little record keeping is in order.  If you do not already have a household budget, this is the first place to start.  The internet is swarming with sites offering home budget worksheets.  I am particularly fond of vertex42.com which provides budget worksheets in MS Excel.  This site offers budget spreadsheets from beginner to advance, monthly versus yearly, with formats suitable for different types of households.  Most of these spreadsheets are customizable.  For those of you asking, “What in the world is MS Excel?”, this site also offers printable budget worksheets that allow you to do things the old-fashioned way with paper and pencil.  For those of you asking, “What are a pencil and paper?”, brace yourself because vertex 42.com also offers Excel spreadsheets for every aspect of your life from calendars to workout logs to baby feeding schedules to wedding budget worksheets.  Pace yourself!

Keep Track of Spending

The biggest budget-buster item each month is the Miscellaneous category.  Keeping specific records of your miscellaneous spending can help identify areas where there is room for improvement.  Write down every penny you spend – your morning coffee, the occasional pack of gum, money you drop in a donation bucket.  Try it for a couple, few months.  You’ll be surprised how much money you spend at a couple dollars a purchase.  Those pennies add up.  Time to start pinching!!

Keep Track of Prices

The most varying item on any budget is groceries.  Prices vary by store, by season and sales.  To get the best deals you have to know you are getting a good deal.  Most of us buy the same items month after month.  There is value in keeping track of the price paid for each item that you purchase regularly.  I have created a Grocery Spending Log that lets you keep track of item prices from one store to the next.  This spreadsheet allows you to keep track of prices from six different stores.  If you shop at more, you can add as many as you like.  Tabs across the bottom of the spreadsheet categorize the items that you purchase.  For each item enter the size and price.  The “price per” column allows you to compare prices from store to store even if the sizes sold are not the same.  It takes a bit of work to create the spending log but if you enter as you buy, you’ll find it is pretty much complete within a few months of starting.  There are several different ways that you can keep track of the items to be entered.  I find the easiest way is to use your store receipts.  Most stores clearly indicate the name of the item and even include the size purchased.  With this information it’s just a matter of some basic data entry.  To add prices from stores where you have not yet purchased you can print your spreadsheet (place sheets in a binder or folder) and take it to the store with you.  As you are moving through the store write in the sizes and prices for items in your log.  For those of you who never leave home without your cell phone, use the camera feature to take pictures of shelf tags which show the name, size and price of the item.  Many stores will also include the “price per” as well.  When you get back home simply add the data to your log.  Once your spending log is complete you will know what to buy where.  It also allows you to to know if a sale price is really a good deal.  It’s a good idea to update your log from time to time.  Compare your receipts with the prices in your log and make changes when necessary.  While the economy results in rising prices these days, some stores are dropping prices on items that shoppers purchase more regularly.  A little work and accurate information make for some good penny pinching!  Before you know it you’ll be able to lower the grocery amount in your monthly budget.