How to save $100 a month – Tips from Ted

by Ted Michalos on January 16, 2012

The last posting we made suggested that in order to avoid having Christmas bills next year, you should try and save money each month this year. It’s a great idea, but we didn’t tell you how to do it. Well, that’s what this posting is all about.

We know you won’t like this, but we’re going to use the “B” word – we’re going to talk about budgeting.

We know, you’ve heard it all before, “just cut a little here and there and you’ll have your $100 in no time”. Believe it or not, it’s true.

The first step is to try and figure out where your money goes every month. If you don’t know how you’re spending your money then you can’t decide how to cut back. There are lots of websites that will tell you how to do this – the simplest approach is to write down every dollar (every penny!) that you spend. If you are paid weekly then I suggest you do this weekly for 3 or 4 weeks. If you are paid every two weeks then write things down for two weeks.

Once you’ve got your detailed list, go through it with a “critical eye” – did you need to spend every dollar that you spent? What part of this list can you do without? Now repeat the process. Write down everything you spend for the next week (or two) and actually cut out (don’t buy) the things you decided you can do without from your first list. Go through the new list with a “critical eye” etc., etc., etc…

In order to save money you need to get your spending to the point that it is less than your pay. Your goal is to come up with enough to save for next Christmas, but don’t stop there. If you can save even more that’s great! Use the extra savings to pay down debt (last year’s Christmas bills).

That’s all there is to this. That’s all budgeting really means.

Once you take control of your spending, you actually get control of your life. One of the worst things to worry about is money (the other is love, but we’re going to start talking about that!). None of this is easy, but it will be worth it in the end. Just take it one week at a time…

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