You say you know where your money goes and you don’t need to track your expenses to keep up with it? I issue you this challenge: Keep track of every penny you spend for one month and I do mean every single penny. For the next 30 days you should record every expense no matter how small. In fact, it’s the small expenses that will be the most educational for you. I personally do this using Quickbooks, but any kind of tracking method can work for this exercise… even a simple notepad.

At the end of the month you should then take your recordings and group them into similar categories, ie. groceries, gas, eating out, clothing, personal items, snacks etc. and add each of them up. I guarantee you will be shocked at what the itty-bitty expenses add up to on a monthly basis. Take the total you spent on just one unnecessary item for the entire month, multiply it by 12 (for months in a year) and you will probably be surprised how much you spend annually on just bottled water, for example. That amount is also how much you could have saved or put towards debt.

That, my friend, is the very reason all of us need a budget and everyone should monitor their expenditures wisely. Many people feel that only rich people need to put effort into managing their money, but the truth is that smaller incomes need to be monitored and managed just as much if not more.

If you can get control of the small expenses that really don’t matter to the overall scheme of your life, you will be one step closer to financial success and independence.

The little things really do add up quickly. In corporate America, many people on a typical work day spend money on coffee, lunch and snacks. For simple math’s sake we’ll say \$15 or \$450/mth. If they could decrease that cost to \$11 a day that monthly bill would now only be \$330. A savings of \$1440 for the year! Just by saving \$4 daily on those items.

It really IS the little things that can save you big. You still eat lunch every day AND that was only one place to save money in your daily living. There are a lot of places to cut expenses if you look for them.

Set some specific long term and short term goals. There are no wrong answers here. If it’s important to you, then it’s important period. You can’t successfully reach a goal if you don’t have one to begin with.

If you want to be able to make a down payment on a house, start a college fund for your kids or even just keeping your bills paid in a timely manner then that is your goal and your reason to get a handle on your financial situation now. To me, saving money is the same as making money. If I can save \$300 for the year on my cell phone and I only had to spend 30 minutes on the phone with Sprint, then I equate that feeling as the same to earning \$300. And if it only took me 30 minutes then I feel EVEN BETTER about it.

Take the 30-day challenge and see for yourself. It will give you the opportunity to truly see where your money goes each month and make wise decisions about those expenses for the future.

Will you take the challenge?

1. Something I never, ever spend money on is snacks and convenience items. I never really have; I’m not really into it. I think it helps that I don’t work near a store, but even when I did it wasn’t something I spent a lot on. It sure does save money!

• @Tushar – That’s great. Not only do you save money, it’s much healthier! I can’t say I’m that disciplined. I do occasionally grab a snack at a convenience store.

• Good for you! Snacks and things like bottled drinks are a HUGE waste of money and many people don’t realize how much they spend on them. Most of these items are also bad for your health and the environment. 60 million plastic bottles are used EVERY DAY in the U.S. alone!

2. I think we fall into routines of doing things like picking up a Starbucks etc. I used to do that once a week. I now do it once a month.

• @Krantcents – I’m definitely guilty of this habit. I allow myself Starbucks on the weekends. It’s a great excuse to ride my bike – I seem to only want to ride my bike when I’m accomplishing an errand. 😉

3. I do a to-the-cent budget every month, so I know that we waste thousands of dollars a year on unnecessary stuff, lol. Whenever we feel like it is unnecessary and doesn’t make us happy, we cut it. Sadly, that means we still spend too much on food…

• @Crystal – Same here. I know exactly where our money goes – sometimes it’s easy to cut out the excess, and sometimes it’s hard to get rid of the coffee (or chocolate) for myself!

4. That’s a big challenge but it’s quite effective on how and where your money goes. I sometimes do lose track and this is a nice process to manage my money.

• @KC – I use quickbooks so I automatically micro-manage my money. But then I know exactly where it goes and where I spend too much! 😉

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