Could you use an extra $500.00 per month? Is there anyone in the world who couldn’t use the extra money somehow? There are ways to accomplish this, and they do not include adding extra income to what you already make. They do not require a raise, and they do not require another job. What they do include is some effort, a little extra time and some research to find what works best for your family, budget and home.
Several years back, when I began to turn to a more frugal lifestyle, I did a lot of research, a lot of trial and error and a lot of budgeting. It is important to see where your money goes each month, so recording that, is almost a must, if you intend to see where that extra money can come from.
In past articles you have heard mention of recording your purchases and expenses through-out the month or months, in what I have called a trial and error period. In a notebook or on a spreadsheet on the computer, you need to record information on you expenditures.
Expenditures include such items as:
Monthly Bills (i.e. Mortgage, rent, electricity, phone, cell, Internet, etc.)
Groceries (i.e. Food, Toiletries, Paper and Plastic Goods, Drug Store Items)
Medical Expenses (Prescriptions and Doctors or Dentist Bills)
Insurance (Health, Medical, Automobile, Life)
Club Memberships (music, books, gym,)
Gasoline
You should record every purchase you make for at least two months, though I recommend three months. You might even notice items you can do without by the time you hit the second month, and you might see a fluctuation in your expenses by the end of your experiment.
In addition to what you are spending, you also need to record, where every source of income is attained from.
Sources typically include job employment income, social security, child support and alimony, amongst others.
Keep in mind, that even though one month you might have made an extra $50.00 in overtime, you might not make that much again, or you might even make more. It should still be recorded to get an accurate feel for what your spending and income habits look like.
After your “trial and error” period, it is time to sit down with your records and see where the money goes. What you are looking for is what you absolutely must have (these are typically your monthly expenses), what you don’t necessarily need, but want to keep (maybe monthly memberships, etc), and what you can eliminate and live without.
Just by sitting down and doing this trial and error period, you can almost certainly cut back on items that are not needed, and open the door for some extra cash to save each month.
For more more Back to Basic articles about saving money, be sure to visit the Frugal Living Blog.