Budgeting: Bad Habits and Ways to Save

Back in early 2008 I still lived with my in-laws.

Money was no problem and I guess I created this bad spending habit.

I was lucky to not pay rent and thus even more spending, and habit building.

I and my girlfriend moved out together that summer and we thought it was a cute cheap little place. The location is super too!

But only after a month or two living there we notice that our money is going too fast versus how much we make and pay in rent and bills.

So I wrote up a budget.

This budget wasn’t your regular kind of budget, they never work for me – it just seems like a long list of things that I have bought and to take the time to figure out if they are necessary or not was just too much.

So instead of doing it “old school” or “the right way” I just wrote up categories and then added prices and receipts together and guess what?

I found over $300 in wasteful spending. Maybe another $100 in things I didn’t really need, but still used (such as food from a fancier store instead of Safeway or Giant).

What surprised me the most was that I spend circa $150 on coffee each month!

One hundred and fifty dollars, that’s about 12 packets of Starbucks coffee that would last for over a year.

I got very upset about this and took the step forward and invested in a coffee maker.

I bought a good coffee maker that brews 12 cups for $99. A stainless steel “on the go” cup for about $20 and I now spend about $40 on coffee every 6 – 8 weeks.

While the first month with this investment cost just as much as the coffee did otherwise I now save over $100 each month.

This categorical system is so good to me, I also found out that candy, sodas, junk food and magazines all added up to around the $100 limit.

That’s a soda a day, one magazine a week and McDonald’s every now and then.

I also cut down my grocery bill by $50-$150 each month by going to larger grocery stores like Safeway and Giant instead of Whole Foods.

I hope this inspires people who gave up on budgeting to try out a categorical system instead.

All you need is a top of ten categories or so and you will quickly notice where your money goes to, where you need to cut down and save and it is pretty fun too.

If you load it up in Microsoft Excel or OpenOffice you can do statistic charts to see if your spending has gone up or down.

As I said, it has saved me over $300 a month. That’s over $3600 a year, which now I save for the future.

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