Welcome to my home! This is a debt-free learning community. Leave any self-doubt and judgments outside to make room for growth.
Today, we are going to discuss leaks in your budget. Basically, where do you have money disappearing that you aren’t consciously aware of?
Even though I keep a close eye on my budget this happens to me from time to time.
What exactly is a leak? This is somewhere low dollar amounts are being spent on a regular basis. Since they are tiny amounts compared to the big picture we have a tendency to pay no attention to them.
One leak I struggle with is buying my lunch. Almost everywhere I can think of has some kind of a lunch deal that is $7.00 or less.
If I were to buy myself lunch 3 days a week for one month at $7.00 guess how much I would be spending? I would be spending $84.00…on just myself?
For one stinking meal. Imagine how out of hand this could get if I also bought breakfast?
Dinner prices go up to around $15 to $20 a meal depending on where you go. Just for me, 3 days a week for dinner at $20.00 for one month I would spend $240.00.
So if I spent $84.00 for lunch and $240.00 for dinner that is $324.00 per month…for one person! Yes, put that in my savings account instead please.
Don’t be frightened or stressed over this story. What I want you to do is list out your expenses in a sheet of paper using the following categories:
- Groceries
- Lunch purchases (what you spend on your lunch break)
- Restaurant purchases
- Fun Shopping (clothes, mani/pedi’s, purses, etc)
Do this later tonight when you don’t have any distractions. Look at all of your bank statements and credit card statements you make these purchases on.
By the time you are finished with this task, you will be able to see which area you spend the most in. We are going to refer to this large amount as your biggest leak.
Do you think these purchases were absolutely necessary?
Stay focused for me when you do this. I don’t want you to look at all of these purchases as one big picture.
I want you to focus on only one, yes, just one to see how you can lower the amount going forward. For one month, work on creating a new habit.
To lower the grocery bill, start meal planning for the next month. For work lunches, start packing leftovers to take to work instead.
Eat out fewer nights per week. Find a new free activity to do instead of shop.
This could be building a fort in the living room with the kids, throwing the ball around for the dog, going to the park with the kids, etc.
Here is a hint when you start to do this. Choose an amount to start cutting that only requires you to make a change and not the entire family.
This one will be easier to master first. When you get the entire family involved it takes a little longer to master lowering that expense. You can do this, I believe in you whole-heartedly!
The best part about this task is you will start to see extra cash in your bank account or a credit card bill that is decreasing every month. Or maybe you will be able to afford to pay more off of another bill that you just want to get rid of permanently.
I know this task may seem easy to complete and a little under-whelming but this is a foundation task. Without this review, your budget will fail. We don’t want that.
As always, if you have any questions at all or there is something about your budget you want to understand better.
Please don’t hesitate to contact me through the contact form to the right or email me at ask@howtobudgetnow.com.
Remember, you are not alone, we’re in this together!!
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