Unlike my first mistake, Failing to Utilize the Energy Tax Credit, my next mistake is one where I at least have a second chance. It’s not too late to fix this one for 2008.
2. Failing to Establish a Spending Budget
I tried to spend less, consider my purchases more, and get the best deals possible when buying things in 2007. While I did halfheartedly inventory my spending and try to get my costs down for each category, I did not establish a budget for these categories at all.
This means that things like restaurant spending and even the occasional clothes shopping spree can get a bit out of hand — I don’t even have an idea of a spending limit, I just go by what feels reasonable at the time. I need to get on top of this for 2008.
But how? Well, I’ve found a few resources which look promising:
* Spending Plan Worksheet (PDF) – This worksheet seems like a good thing to sit with and use to ensure you cover all your bases budgetwise. I like how it feels so simple.
* Flexo’s Excel Income and Expense Report Template – For years now I’ve been half-starting budgets in Excel, trying to determine costs. I need to collect my expenses more comprehensively in a template like his to predict my spending for 2008. Math-hater that I am, however, I don’t think I can actually keep these numbers up monthly going forward, so I plan to go with an online service instead for progress tracking.
* Yodlee MoneyCenter – I recently tried out this online service and am liking what I see so far. One thing I noticed was a nice little feature that lets me set goals for each category of spending. I would use this service to just import my history, but sadly it won’t allow me to import an entire year. A year from now, however, I think the Spending Reports option will be incredibly valuable for me, since I plan to keep up with categorizing my transactions here.
* Inspiration – Of course, when you’re embarking on an arduous task like collecting a year’s worth of expenses, it helps to have some motivation. One article I found compelling: Savings: Making a money-smart spending plan [Bankrate.com]
How do you handle your budget? Have any hints you can share?
Updated January 9, 2008 and originally published January 7, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.