You’ve heard the advice – if you want to manage your money better, you must budget. But writing it all down is easier said than done, isn’t it? Don’t despair! Just because you can’t write down your whole budget, doesn’t mean you can’t manage your money. In fact, there’s a good chance you’ll find it easier to tackle each area of your life one at a time, than try to tackle everything at once.

Get yourself a pen and paper. Pick one major category, something that you know is costing you money – e.g. your car, the kids, food, entertainment, clothes. Write down everything you have spent on that category recently – say, the last 3 months. Check your credit card statements for transactions. If you picked clothing as your category, go look in your closet to refresh your memory of what new things you bought in the last two or three months. If you can’t remember exactly how much you spent on something, a guess is good enough.

As you write things down, you’ll start to get a picture of whether you have a problem in this category. Congratulations if you decide that every cent you spent was essential, and you got your money’s worth! However you may realise that there are opportunities for saving: maybe you’re making too many impulse buys, or purchasing too much of your food at expensive convenience stores instead of at the supermarket. Jot down these ideas as they occur to you, so you don’t forget them later.

When you have finished one category, pat yourself on the back. You did it! You may need to discuss any savings ideas with your partner or family, to get their cooperation. Or you may have to do some research on how you could reduce the spend in that area – but now you have a good picture of it, you know what you’re looking for, so you’re already one step ahead.

Once you have completed a category, give yourself at least a week before you start on the next one. During that week, every time you are about to spend some money in that category, think consciously about it.

- Do I really need this?
- Could I get it cheaper somewhere else?
- Could I substitute something cheaper for this?

If you do decide to buy, make a note of your purchase.

At the end of the week, review your notes and list of expenses. By now you should be getting a handle on how good you are at managing your spending in this category. If you need more time before starting on the next category, take it.

Keep going like this, one category at a time, until you have covered every area of your life. It may take a little longer, but by taking it slowly, you will create new habits that will stand you in good stead for a lifetime.

Thumbnail photo from Stuart Pillbrow on Flickr

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