Notes From The Frugal Trenches – A Downshifting Journey

A reader Claudia emailed me asking if I had ever posted how to have a jar system for budgeting, I suddenly realized I hadn’t exactly explained it in much detail, so I thought I’d begin a series! I honestly think that people worry about this, worry that they’ll feel overwhelmed or worried about their spending habits and lack of savings. Let me tell you, as soon as you admit where your money is going and see those numbers, you are encouraged to start small. Those teeny tiny changes really really add up to big savings, so don’t feel overwhelmed just follow these steps that have worked for me!

The first step I used was to look at all the areas you spend money. It can be easy to forget, so have a look at your bank statements, credit card bills, write down in a notebook what you are spending and where (try doing this for 2-4 weeks), look around your home. To help you, here are the categories I either have or I’ve identified for friends:

• Mortgage/Rent
• Water
• Electric/Gas
• Television – in the UK remember the license fee plus any additional package you have
• Telephone – landline and mobile/cell
• Internet
• Taxes
• Giving
• Food
• Eating Out – include coffee/hot chocolate runs (can you tell this is where my weakness is?)
• Gifts
• Clothing
• Make – up
• Car costs – tax, maintenance, services, petrol
• Insurances – house, car, life, contents
• Vacations
• Mini-breaks
• Things for your home
• Child-care
• Health – dentist, prescriptions, insurance, co-pays (this is where I worry about my US readers…!)
• Beauty
• School Trips
• Hobbies and Sports – gym memberships, children’s activities
• Debt Repayment
• Credit Card Bills/Repayment
• Miscellaneous – basically where you are spending cash and have no clue where it is going!!!

Okay now you are ready for the final part in STEP I

• On a sheet of paper, put your take home pay (after tax) at the top of a page 
• List all these expenses beneath – as close as possible, write down what you estimate you are spending in each of these categories each month
• Now add up what you are spending
• Take what you are spending away from your take home pay and that becomes what you are currently left with at the end of the month!

Step II will be looking at areas where you can reduce your spending and increase your savings! Remember, it is, I believe, always possible to make some cutbacks, however small!

Honestly come step II, you’ll feel like dancing in the supermarket in joy and jubilation that you have a financial plan.

I leave you with some supermarket dancing! Happy Weekending