Failing to plan is planning to fail - especially when it comes to money management

It all starts with a budget.  Most of us hate the "B" word but it will be the most important step in getting an idea of where all your money goes every month. 

Budgeting is really not difficult once you make up your mind to get started.  An Excel spreadsheet will make it easier to track, sum up and modify your budget as you go. Best to make it a family affair if you are still talking to your spouse about money! Start with the biggest items like mortgage or rent, car expenses, food, credit card payments and don't forget your "Latte Factor" - those unnecessary little expenditures on which we waste our money.  David Bach who coined and trademarked the phrase has a great site with a calculator to help you with this part. See Latte Factor.

Just for one week, track every single expense. Keep all  your receipts and enter them in your budget sheet. You may be surprised at how the seemingly "little" things add up. Keep going! A month of keeping track is even better.

Now that you see where the money goes, you can start planning on where you can save and invest. Even a little savings will make a difference if you do it long enough on a regular basis. Try saving just 1 or 2 dollars a day to start.

Even a small sum like $50 a month can build a nest egg of over $100,000 if you start at the age of 21 and stop at age 65, starting with an initial sum of $1000 and assuming a 5% rate of return. Try out some possible scenarios on the calculator below to see how you can benefit from regular saving and investing.
Calculator: Advantage of early investing

Keep it up! If you get a raise or unexpected money put that in your "nest egg" fund and forget you have it. Some other ideas for saving:

• Walk instead of taking the car for short trips. You will gain an extra bonus of better health!
• Take your lunch to work or "school" ( yes, I am talking about all  you college and university students) 
• Check out the free online movies instead of going out and paying to see the same movie
• Make extras when cooking so you have a quick meal ready in the freezer instead of ordering pizza

Send me your ideas and comments for other ways to save and still have fun!