How to prevent money running through your fingers
October 30, 2009 – 5:22 amI know this experience will resonate with some of you. The cash I drew from the bank on Monday was completely gone by Thursday and I had no real idea what I spent it on. Sure, I could guess, but that is just what it is, a guess… More importantly, until I got this are under control, it made my budgeting very inaccurate.
From my own experience and research, roughly 50% of “pocket money” expenditure is never accounted for. So, say $40 was drawn from the bank each week, $20 of it could be being completely wasted. That totals over $1000 per year.
So, what can be done to address this situation?
One way to get in control of this expenditure is to equip yourself with a little note book and perform an audit of a all pocket money expenditure over a one month period. This should be done for everyone in the household who spends cash. Set aside a page for each day and write down every cent spent that day.
At the end of the month go though the book and put all the expenditure into the same categories as in your budget and consolidate the figures. You may well be amazed just how much difference this may make to your future budgeting.
I personally perform this exercise once a year and have been doing so for several years. The first time it really opened my eyes to just how much effect getting that single area under control had on my overall financial wellness.
Have an awesome week.
Article by : Malcolm Guest author
