Spend Less, Save More, Live Better -- Here’s How
..............................................................................................
By Jason Veinot

Have you ever thought to yourself, “Where in the heck does my money go?”
You know you need to save more, but just making the monthly expenses seems to take all you have.

Studies show that the average Amer-ican spends 35% on housing, 15% on transportation, 12% on food, 10% on insurance, 4% on clothing, 5% on utilities, 9% on household items, and 10% on entertainment.

That’s 100% -- and doesn’t include education, travel and emergencies.
No wonder people have less and less saved for retirement.

So how can you cut costs?

As the Chinese proverb states, “The journey of 1,000 miles starts with one single step.”

So let’s begin with that first step. Your new spending plan will take at least a month to put into place.

Using a notebook for you and your spouse, write down everything you spend and on what for one month -- and don’t change a thing!

Include bills, movies, food, bubble gum, those shoes you’ve had your eye on. Everything.

At the end of the month (or two) put your purchases in two categories -- fixed and discretionary.

Fixed are the monthly bills. Discretion-ary are the items you can do without. (No, those shoes are not a fixed expense).

Now sit down and have a serious discussion concerning where things can be cut back and changed.

Suggestions include increasing insurance deductibles, negotiating a lower cell phone or utility bill, coupon clipping, canceling subscriptions, buying store brand instead of name brand, or simply ordering water instead of the $2.50 Coke at every meal.

Once this slicing and dicing of expenditures has occurred, it’s time to implement a very advanced and technical concept of managing your new spending habits.

Go get some envelopes and write a category name on each such as groceries, savings, our one night out, gas, etc.

Determine what you can spend from each category and then, when you receive your income, place the appropriate amount into each envelope.

Once the money is gone, that’s all you get until the refill next month.

OK, it’s not that technical of a system, but it works.

At the end of the month, if you have been good at watching your spending, you may have money left over.

That money can be put into savings, spent on a reward for your hard work or carried over into the next month.

Just make sure that you make the plan realistic and not so strict that you set yourself up for failure.

Remember, all new things take time and patience to learn.

Good luck and congratulations on taking control of your money.

Jason W. Veinot is President of VFG Wealth Management and a local financial consultant. Contact him at 231-6622 or jason@vfginvest.com.