Where to start?

Living frugally, where do I start? I think that I already live quite thrifty, I for example pay attention to what I spend, I use home made cleaning products, I try to limit our waste … but as I mentioned in my previous blog, there’s still a lot of room for improvement.

I think that a good way to start (or continue) living frugally would be by first of all focussing on my spending. I have a sense of how much money my boyfriend and me spend each month, however I have no idea where our money exactly goes to. We can save a lot of money each month but I don’t know the exact amount we give on food, clothes, going out … We’ve created a budget for most household items (such as groceries) but we don’t really reflect back on the accuracy of our estimates. So maybe I have a completely wrong sense of our expenses. It is possible that in my mind several purchases are forgotten or are considered as futile (such as that box of chocolates that I bought yesterday), giving me a completely false sense of being thrifty and could have a big impact on my financial future.

So I think it would be good to start tracking our expenses. Just writing everything down and dividing our expenses in different categories, to get a view of our spending habits (we will definitely need a separate category for chocolates). It would be a good exercise to see where our money goes to, and it will help us to budget our expenses in the future!

At the moment I am figuring out which tracking system would be best. I can for example write everything down in a notebook, use a spreadsheet application on the computer, or use an app. I think I prefer using an app because it allows me to add my expenses on my Smartphone wherever I am.

A quick browse on the internet shows that there are numerous apps that can help me with this, I can enter my income and expenses, divide them in different categories and get a nice overview of what I spend each month for each category. Some apps can even help me to create a budget and tell how much money is left per category. The only ‘difficult’ part is finding a good app since there are so many to choose from. Based on a first quick search me and my boyfriend like dollarbird, spendee and accounts 2, but there are many more so in the following months I will test several money tracking apps including these three and see which one fits best to our needs. I will of course write a review on these apps in the next few weeks. I will also keep you up to date on how tracking my expenses works out for me. My boyfriend and I are very curious to see whether we spend as much money on food, clothes, going out, electricity … as we think we do, or whether we spend much more than we thought.

Regards,
Frugal Fiona

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3 thoughts on “Where to start?

  1. My usual approach for personal budgeting is to first calculate your actual monthly spendings for each category such as food and utilities then subtract 10% or higher if you want (Of course, theres nothing you can do about fixed costs like rent). The new totals will be the budgets that you will set for the next month for each of the category. Now try your best to meet the budget that you have set for yourself. If you can’t meet the budget, you can try to either increase your budget a bit or try again for the next month if you can limit your actual spending.

    If you can meet the budget, try to meet it consistently for the next mont or two. Then when you are comfortable with that spending habit, you may consider to challenge yourself once again by lowering your budget further.

    It’s also useful to categorize your expenses based on “needs” and “wants”. Needs are of course your basic necessities so you cant lower the budget in that category too much in one go. On the other hand, you should focus on lowering your budget for your wants.

    Liked by 1 person

  2. Thank you for your reaction. It’s really interesting to read your recommendation. For now we first have to get a better/exact idea of our spending per category. Once we know that, we can create a budget per category. When we have an exact budget per category it’s a good idea to subtract 10% of that budget and try to meet it.

    And yes, it also be good to make a distinction between “needs” and “wants” 🙂 . I will keep that in mind when tracking our expenses. I think we can definitely lower our budget for our “wants”.

    Liked by 1 person

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