How To Do A Spending Analysis

Analyzing how much money you are currently spending is the first step to take when making a budget. It is also an eye-opening experience because most people don’t realize how much money they really spend. Many experts suggest writing down everything you spend for a month and then analyzing the results before planning a budget.

Save All Receipts
This may be hard to remember, at first, if you’re used to throwing away your receipts, but they contain valuable information that will help you to analyze your spending later. Another thing to remember for this exercise is to ask for a receipt at places that do not automatically provide one. Keep all receipts in an envelope for later analysis.

When you get gas at the gas pump, be sure and say yes when prompted to answer whether you want a receipt. Of course, you’ll have to remember to actually pull it out of the machine, too. At the end of the month, and through the following months, compare your gas receipts and you’ll automatically see which places have the least expensive gas.

ATM Receipts
If you use an ATM to get gas or to do your banking, be sure and get those receipts too. If you regularly get cash out of an ATM that charges fees, you’ll see right away how you can save a few dollars in one area and allocate that money to something else. If you get cash out of an ATM and wonder where it went later, we’re about to address that situation as well.

Keep a Notebook
Keeping a notebook to write down every dime you spend is a valuable part of a spending analysis plan. Even though you are keeping your receipts, forcing yourself to write down each expenditure will guarantee that you have all the data you need when you begin to analyze your spending. It may also serve as a safeguard against unnecessary spending because if you know you have to write it down, you may decide not to spend the money.

Vending Machines
Most people don’t plan to spend money at vending machines, but the companies that place them would be out of business if people didn’t patronize them, so the fact that vending machines seem to be everywhere is evidence of their continued success. Many modern vending machines even take debit and credit cards, which may actually be good for your budget. Even though you’re keeping a notebook and writing down every expenditure, if you use your debit card at a vending machine instead of cash, you won’t have to remember to write it down and it will be in your bank statement to review later.

The Analysis
At the end of the month, sit down with your notebook and all your receipts and record each expenditure within a particular category. For example, don’t record that you spent $45 at Walmart, but break up the receipt into categories, such as groceries, toiletries, etc. If you do this with each receipt, you’ll have a clear picture of where your money is going, and you’ll be ready to write a budget. You’ll also be able to see at a glance area in which you can cut down or cut something out altogether.