Tuesday, May 27, 2008

From Pennies Dollars are Made

One of the things I am going to start doing is tracking every penny spent. I know a lot of people have been doing it and using it as a great tool to track spending. I find it also serves as a "guilt-o-meter." Do I really want to write down that $.85 I spent on a candy bar? The shame alone will keep me reaching in my wallet and pulling out those 3 quarters and a dime on my way to Snickers induced happiness.

So far today I have spent $.50 on a much needed vacuum for the car. I foolishly and somewhat hilariously left the windows open in my car overnight... near blooming cottonwood trees. In the morning my seats were literally covered with little pollen plant caterpillars! Since I seem to be slightly allergic to it, I figured this rated a medical necessity. I am not going to document every penny I spend here, of course, but I will be looking for trends and ways I can cut. In this case I didn't have a choice since I don't have electrical hook-up outside of my apartment, so it was off to the car wash.

While at the car wash I started contemplating how I am going to track my success rate. I've decided to add a counter to the side of the blog to help me track how I am doing each month. The way I see it there are 3 categories of money that are going to help me reach my goal: 1) Making more income. This is obvious: coming up with ways to make more money that adds to my $900 a month. 2) Cutting expenses. This includes measurable amounts of money that I can stop spending. 3) Spending less. This is different than cutting expenses in a way - it is part of it but more nebulous. For example, I wanted to get my car washed today but didn't. By the end of June I will be in a house where there is a hose and place I can wash my car myself. Until then I am not going to spend money on washing my car. Yet, I don't feel quite right about including those types of savings in my monthly goal tracking. I might usually get my car washed twice a month - let's say that would run me $20.00. But I don't feel quite right about counting that money because it isn't really measurable, it wasn't in my old budget. Here's a better example - I love Starbucks Vente Vanilla Lattes with Soy. Usually runs me about $4. Yesterday as I drove by Starbucks I breifly considered getting a coffee, but then chose to go home and make my own fresh ground French press pot with vanilla soy instead. It probably cost me about $.30. But I don't feel like I can count the fact I didn't buy the latte towards my goal - otherwise the math gets weird. For example, if I thought about getting a coffee every day for two months, but didn't - that would give me an additional $240. Yet, I never got a coffee every day, so the $240 isn't real money.

Instead I am only going to count clearcut measurable monetary amounts. I will, however, still blog about my tips and techniques and goals for saving spending dollars.

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