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Trouble Areas

Drinks and eating out.  These are my trouble areas.   We all have trouble areas.  These are the places where we tend to spend a lot of our money.  These things that we enjoy.  They make us happy.  And they eat up more than their fair share of our income.  I live in New York City and much of the socializing is done at happy hour, brunch, dinner and weekend parties.  For me, I spend a lot of money in these areas but I get to relax, take time out of my crazy day and relax with friends.  To me, it’s generally worth the expense.

Why does it matter, you ask?  If it’s worth the expense, why pinpoint your trouble area?  Because when things become tight financially or if you’re making plans to save for a specific expense, you know where you can cut back without excessive stress.  One thing we’ve learned during this economic crisis is that moderation is undervalued.  We can use our hard earned money to enjoy our lives but we can’t us it all to enjoy everything.  When things become really hard, look to your trouble areas and find ways to cut back how much you spend.  You don’t need to give it up all together, but become creative.  I know how much I tend to spend on drinks and eating out in a month.  I know that I can have friends over for drinks or plan a potluck if I need to cut back on my expenses but don’t want to give up time with my friends.  Find a cheaper version of your trouble area so that you don’t give up something that’s important to you.

Do you know what your trouble areas are?  Shoes?  Fancy electronics?  Are there ways to cut back or enjoy the items you already have without incurring more expenses?  Maybe you’re not sure what your trouble areas are.  Finding out takes a little bit of time but the control you gain over your life and your finances makes it worth the trouble.  Track your expenses for a month.  Don’t give me that look!  It’s just one month!   Estimate how much you think you spend on everything and then track the information for a month.  And I mean everything.  This includes that afternoon snack at the vending machine.  Yes, I know it’s only $0.75.  Write it down*!  At the end of the month, compare your actual expenditures with the estimates from the beginning of the month.  Are there any surprises?  Have you spotted your trouble areas?  Knowing this information gives you power to control how you spend and where you spend your money. 

* If you regularly use your credit card for expenses, most of your tracking has been done for you!  But don’t neglect the things you pay for in cash.  Just keep receipts or jot the information down in a little notebook.  Be as accurate as possible.  I’m serious about the vending machine.  That may be your trouble area!

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