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A Prioritized Spending Plan
One of the most important ingredients of a successful money management strategy is to know where our dollars are being spent. Track your spending for six weeks so that you can determine which items are appropriate, or inappropriate, to spend money on. Tracking your expenditures will help you to control expenses and resist impulse buying.
So keep track of your spending for six weeks - down to the most minute purchase or expenditure. At the end of that six week period, you will have a better sense of how you want to spend your money.
1. Buy a note book and carry it at all times.
2. Write down all your expenditures (checks, credit, cash - even money send at parking meters) at the end of the day.
3. Total your expenditures at the end of every week and categorize them, i.e., clothing, travel, auto, etc.
4. Prioritize the categories from the most important to you to the least important expenditures; i.e. savings first, then clothing, then auto, etc.
5. Decide which of the least important you could live without and eliminate them. Stop spending money on those items you've decided are less important.
6. Allocate a percentage of your money to pay yourself first, i.e., savings/investments.
7. Remember how you've prioritized your spending plan while you're spending and act accordingly. Ask yourself if a particular purchase fits your plan before you make your purchase.
8. This plan can be repeated as necessary, perhaps once every three months to help you master your money and gain greater control.
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