Spend less than you earn

by Marcel 15 February 2012

It's actually quite simple, Spending less than your income will save you money and a lot of stress. But, of course it's easier said than done...

My way of keeping track of income/spend is the following:

- Create a simple spreadsheet listing all of your monthly bills in one column. (rent/mortgage, gas, insurance etc.) these are costs that will not fluctuate all that much.

- Then create a second column showing your income.

Something like this:

Date Costs Income Description
2 30   Internet
5 35   Phone
10 600   Rent
11 50   Gas/Elec.
27   1500 Salary
28 100
30 25   Bus pass
Totals 840 1500  

This is a very simple example, but you should get the idea. Once you have this finished you know exactly what you have left for the month, in this case 660 euro.

With the left over amount you still need to buy groceries, clothes etc, work out how much you need per week, say 100 euro and add a little more just in case. In my example we'll reserve 450 euro (per month) for groceries/clothes and other things.

monthly Cost Description
  440 Groceries
  100  Clothing
 50 Other
Total 590

That leaves you with 70 euro to put in your savings account. It doesn't sound like much, but after a year you'll have 840 euro in your savings account which is 840 more than you would normally have. Most people find that once the savings account starts to grow they find more ways to save their money and it grows much faster. Also, don't forget the extras like bonuses, birthday gift money, tax returns etc

Not only do you know exactly what is coming in/going out but you also know where you could save a few euros, that magazine/newspaper subscription you don't really have the time to read, cancel it and save 10 euros for savings, or an extra treat every now and again.


Budgetting | Savings

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