Each of us has a limited amount of money to spend. Being able to manage spending is critical to achieving financial success. More importantly, when you spend wisely you have more money available to save and invest. That means a brighter and richer future for you, your family, and your friends.

  • Tracking Fixed Expenses. First account for all your fixed expenses. Fixed expenses are the bills toward which you pay the same amount each month, like rent, car payment, and insurance. Write down the fixed monthly bills. Better yet create an Excel spreadsheet adn enter them there.
  • Next, account for the fixed expenses you pay annually: car registration, gym membership dues, or anything else you pay each year. Enter these expenses into your budget by taking the annual payment and dividing in by 12. For example, if your gym dues are $240 each year, your monthly payment is $20
  • Tacking Variable Expenses. Most of us have cash that vanishes each month into unknown voids, like stops for pop or a burger. To really get a handle on spending, write down every dollar you spend–every latte’, every burger, every bus or taxi fare–everything. Keeping a “money diary” helps you understand where your money really goes.

If you’re like most people, over time you’ll identify areas where you tend to overspend, and possibly other areas where you want to spend more. You may be able to pinpoint those times when you have no idea where your money went.

Once you become aware how you spend your money, you can start building a workable budget.


Budgetting is simple. From your income:

  • Set money aside into savings accounts and investments first.
  • Pay your necessary expenses (needs).
  • Leftover money is yours to spend as you wish (wants).


The goal of creating a budget is to save money for the things you want now, while making sure you have enough for later. Saving money is the cornerstone of a financially secure lifestyle. Setting aside money each month builds a foundation for establishing future wealth while still leaving you able to enjoy time with your friends now. Putting away your hard-earned dollars will free you from the emotional stresses of everday bills.

Maybe you want a computer or new clothes. Well, saving allows you to purchase the luxuries you want. The best part is that you can afford it!

Life is about experiences. By saving money for the things you like to do, you’ll be able to partake in more activities and holidays, adn invest in those things you dream of having.


Having real goals in mind makes the choice to save–rather than spending–much easier. Try saving money according to what you want to do with it. Divide and allocate your savings into three specific categories: emergency (contingency) fund, fun fund and long-term savings.

Emergency Fund. Your emergency fund is your first priority. Emergency funds should equal six months of your living expenses. Ths is, if your bills are $500 per month, you need to save $3000 for emergency purposes. Unexpected problems may arise, and your emergency savings fund helps reduce your worry. For example, say your car breaks down and needs expensive repairs. If you have no money saved, how will you get to work? Take the bus? Walk? Bum rides from friends? If you have emergency savings funds, you’ll get back in the driver’s seat with little or no stress or panic.

If saving six months of living expenses sound too difficult, here are two ways to save more:

  • Earn more money
  • Cut down expenses

Easier said than done, right? But that’s really as straight forward as the answer gets. Cutting down is something that can be done immediately and should be addressed first. Increasing income may take a bit more time and resources than cutting expenses, but the combination of the two really create a power-house opportunity to achieve financial security.