Growing up in my family home taught me a lot about living frugally. I have early childhood memories of the abundance of food our family enjoyed. All of this food largely came from my family’s farm. I remember the rows and rows of potato plants rising up from mounds of newly tilled soil. Tomato plants, green peas, cucumbers, onions, squash, there were so many delicious foods that came from my families garden every year. My parents didn’t seem to worry about financial success when they had all this abundance of nature’s bounty around them.
My father contributed to our family’s finances on a daily basis by doing a variety of home maintenance and car repairs. He chose to do this himself rather than pay someone else to do this work. My Mother sewed many of our clothes. Growing up in my family should have prepared me for many skills to live frugally. I had to wonder though if there is a difference between living frugal and knowing how to manage money. It seemed to me my parents never had any money to spare.
I realized only after I lived on my own for awhile that I had depended on my family’s resources, without really learning how to put those resources to use in my own life. I was different than my parents. I wanted to buy my clothes from a store. I wanted to live in town. I wanted shopping trips. I also wanted to manage my money with enough to go around to the end of the month, and from one day to the next. I wanted to have financial intelligence.
Here is What I Learned About How to Manage My Money:
— Keep a daily record (Mundis 94). I vowed to track my spending. I would carry a small notepad with me everywhere. Anytime I spent even .05 cents, I would write it down in the notepad. My record included what I spent my money on. I would find out where my money was going and how I was spending my money. I would stick with the daily record and not add anything to it until I was sure that I could track all of my spending. I would know exactly what I was spending my money on each and every day.
— Keep a weekly record (Mundis 97). In my weekly record I review where I have spent my money. For example, 5 dollars on coffee, 50 dollars on clothing, I made a weekly form to fill out tailored to my own needs. This is a form I could understand since I made it myself. This form would allow me to see my spending habits for one week. Along one side I put the areas where I had spent my money, such as, clothing, coffee, laundry, entertainment, groceries. I put columns all the way across with a total for each area of spending at the end. Once I had my totals for each area then I could add these combined totals for a complete total of spending for the entire week.
— Keep a monthly record (Mundis 98-99). The monthly record is an overall view of spending for the whole month. Again I made my own form, which was easy for me to read, for recording the amounts. I wanted to be able to see my spending habits, but I didn’t want to spend hours on a complicated budget sheet someone else designed. I wanted a financial plan simple, and tailored to my own needs. Once I had completed my first month of record keeping, it was easy for me to see many areas where I could make changes in my spending habits.
— Stick with a financial plan (Mundis 128-134). After reviewing my spending habits, it was time for me to decide how much money to spend on individual areas for the upcoming month. With my record in hand I was now prepared to make better decisions. For example, I lived one block away from a convenience store. After reviewing my monthly spending record, it was easy to see I spent close to 40 dollars a month at this store on snacks alone. I could cut back on some of these snacks and also I could purchase these snacks at various retail stores in the area, where the prices for these items would be much lower. Finally, this included my last form showing my financial plan for the upcoming month. At the end of each month I could compare my financial plan to my actual spending. Sticking with a plan would allow me to create a money surplus.
A Word About Spending Areas
Since this was my money, I decided how to spend it. I decided to have an area for entertainment, and shopping trips. Maybe I didn’t want to be rich, but I did want to enjoy life, not all fun costs money, but I couldn’t forget about the shopping trips. I would set some money aside for just the fun purchases, a new pair of shoes, or blue jeans, flowers, a vase, or a book to read, things I would personally find pleasure with.
I decided to be consistent about paying off debt. No matter how much or how little I could pay, I would never miss a payment. I would not make any new debt. If I couldn’t pay cash or figure out a way to save my money for a larger purchase, then it would have to wait. “Just for Today, One day, Do Not Incur Any New Debt. Not one. Don’t borrow $ 2 from a friend. Don’t accept a service you plan to pay for later. Don’t take a loan from a bank. Don’t charge anything on your credit card” (Mundis 83).