How's it going? I hope you're getting excited to start your Spending Fast. If you missed them, check out Week 1 and Week 2!
Now we're starting Week 3. By now you have chosen your "necessities" and decided how much you're going to spend on each one every month. On the sidebar of this blog I have created/posted a non-budget-money-tracking-template which I have been using and find SO helpful! Go download it for free. Seriously, go. I'll wait. After that, read through the instructions.
Ready? Good. See how it is divided into major spending categories, and then into specific ones? Hopefully your all of your necessities are listed. Insert the your pre-determined "necessity" amounts in the "Projected costs" column. As you spend throughout the month, insert those numbers and keep a running total. I have divided the "Actual costs" into two columns so that you can account for the 2 pay periods in the month.
Have you heard of the Hawthorne effect? From 1924-1932, the company of Hawthorne Works Western Electric Company did a study to see if their factory workers were more productive in low light or higher light environments. The interesting result was that the workers' productivity seemed to improve study occurred and slumped when the study was concluded. Although illumination research of workplace lighting was the basis of the experiment, the results found that the workers' production rates didn't have a lot to do with lighting; but more with the fact they knew they were being watched. Once they weren't being studied anymore, they stopped working as hard. Makes sense right?
Your money works the same way. It seems to grow when you're watching it. If you keep track of what you spend or don't spend, you know how much you have all the time, and can spend based on fact. However, if you're like I used to be, and don't monitor your money, you may go shopping thinking you have $500 in your account (but forgot to take into account the groceries, the boots, and the computer you bought the day before...) when really you're broke.
Your money works the same way. It seems to grow when you're watching it. If you keep track of what you spend or don't spend, you know how much you have all the time, and can spend based on fact. However, if you're like I used to be, and don't monitor your money, you may go shopping thinking you have $500 in your account (but forgot to take into account the groceries, the boots, and the computer you bought the day before...) when really you're broke.
I find that using some method of tracking my spending, like my spreadsheet, is a total Spending Fast. life saver! Because I can see all of my transactions in one place, I can see where my money is going, and how much I have left, faster than my bank's website can tell me. One of the only difference between the wealthy and those who are drowning in debt, is that the wealthy watch their money and know where it goes.
Seeing how much or how little you're saving will also be a good motivator for future months. If you always go over budget in one category, or are consistently under budget, fudge your numbers so they fit your lifestyle. Again, you have to be realistic so if $10/week for groceries doesn't work for you, then you need to increase your numbers. The goal is to save as much as you can, and you can't do that if you're not properly planning.
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