We all could use a little extra cash and let’s face it we aren’t getting raises at our jobs anytime soon, so we need to come up with creative ways to put more money in our pockets.
Most people may not believe this but it is absolutely true that you have extra money right now and you don’t know even know it. To prove it here is a good technique you can use to find that extra money you currently have and what to do with it once you find it.
This technique that I call micro managing your finances is a way to see what you spend, when you spend and how you spend it. You get a better account for where your money is actually going. Ever have twenty bucks in your pocket and then at the end of the day you are left with just a few ones and maybe some change? Then you ask yourself where the heck did that twenty go?
Well that is where micro managing your finances comes in. In order to implement this you will need a notebook and a pen to start. I am sure you have them around your house somewhere. For the next thirty days Everytime you spend money you are going to write down when you spent it, how much you spent, where you spent it and why you spent it.
It doesn’t matter if you spend a penny on some candy or a thousand dollars on a new LCD TV set. Write it down. This is how you micro manage your finances.
At the end of the thirty days go back to the beginning of your notebook and starting on day one take a highlighter and highlight every item that you feel you could have avoided. For example say on day three you stopped at a fast food place and bought a medium French fries. Ask yourself was that necessity? If not, highlight it to mark it as money that could have been saved.
Once you have highlighted all the items add up all of the dollar values to get your total amount of money that you spent on items that were not a major a need. Example of a need is say getting the car fixed. An example of not a need would be buying fuzzy dice to hand off your rear view mirror. You get the point.
Now that you have your total you know exactly how much “extra” money you have. Break that value of the number of paychecks you receive in a given month and then from each paycheck deposit the calculated amount into a savings account. So for example, say you were able to find $100 for the month and you get paid twice a month. That means you can take $50 from each check and put it into your savings account. At the end of one year (using these numbers) you will have an extra $1200 in the bank.
Of course there will come that time when a dire need comes up, say the water heater breaks in your house and you need that extra cash. You can do one of two things. You can borrow the money you need from yourself and then pay yourself back by increasing the amount of extra money you deposit over a period of time, or you can see where you can cut back in your budget for the given month, such as your shopping bill, walk instead of driving to save on gas, reduce the heat or air conditioner in your home to cut energy costs and other ideas to make up for the money you will need for your heater. The choice is yours. Either way by the end of the year your savings account should still total the monthly amount of extra cash.
If you want to save money you need to micro manage yourself and your finances. You will be surprised to see where your money is going and once you redirect the wasted money away from those $5.00 latte grande’s into your savings account instead, you will be well on your way to financial security.
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