Many people don’t realize this, but one very simple way to start saving money very quickly is to actually start tracking where you’re spending money on a day-to-day basis. Pennies add up. And every time you stop for a quick coffee or soda, pick up an extra magazine, or even buy a pack of gum or some candy, it takes money out of your budget. Most people have no idea how much money they actually spend by buying a little bit of this and a little bit of that every day.

In fact, if you make a habit of always paying things with paper bills but never any change, and just start sticking the change in one spot regularly, you may be surprised at how fast that money adds up.

If you need to reduce your spending bill, then you need to get a handle on where your money is going. And the only way to do this is to write it down consistently. Save every receipt you get, and sit down every day with those to add up how much money was actually spent that day. You may be surprised to find, that even though you only spend a little bit here and there, the total amount is much more than you expected it to be.

Keep track of every expenditure you have. When you pay a bill, write down the exact amount you paid. If there were any additional expenses added to the bill such as credit card fees, you need to note those down too.

If you track where you’re spending money every single day, and track exactly how much you’re spending down to a penny, you will start knowing without a doubt where all of your money is going. Once you have an idea of where the money is going, it will then be much easier to sit down and create a spending budget for your household. You may choose to create a budget for each individual person as well as the house in general, or you might just want to create a general family budget which is separate from the necessities budget for the house.

Trying to make a budget without first knowing where all of the money is going though will not work. In fact it will just be an act of frustration. Because money will be flowing out, or it will be short in one area or another, and you won’t be able to understand why.

By first writing down everything you’re spending you can get a much more accurate picture of where the money’s going. And you can also see where you may have some bad financial habits, so you can start working to correct those problems while also getting your budget working much more efficiently for your family.

One of the key elements in getting yourself out of debt is – organization. I’ve talked to many people who find themselves so anal and organized in parts of their lives which carry little impact on their future like keeping the garage floor swept at all times. Yet if you look at their finances it is chaos!

These people I have a special soft spot for… because it use to be me! My computer for example. For whatever reason I’ve always kept my hard drive organized and can find things quickly. But, walk into my office you’ll find papers stacked everywhere – this included the bills.

When I began my journey out of debt I discovered one reason for the debt was my total lack of organization. Who wants to face a mess? I told myself things were filed but the system existed more along the lines of… I’ll get to it later. Bills would be late many times because I did not pay attention to when they were due.

Listening to audio one day I learned a very simple concept that changed my life and not just in the money department.

This simple “idea” helped me get organized, on paper, in filing cabinets, with finances and in life overall.

The Organization Concept of Pain or Pleasure

If the truth be told we all would love to spend our days sitting under a palm tree on a sandy beach watching the waves roll in – that would be pleasure! For others pleasure may be going to a ball game, getting together with friends or movie night with the family. The simple enjoyable pleasures of life.

For myself the lack of organization played a pivotal part in my daily life resulting in pain. Once the connection was made between pain and pleasure being a part of the disorganization in my life… I tackled pain with focused intensity. Ever so slowly life started to become much more organized without much effort.

Most of us want to have pleasure in our life but I focused on pain! I vowed to start getting rid of the pain in my life. The less “pain” the more “pleasure.” The outcome has been transformational.

Let me give a few examples:

Clearing the Desk!

One of the first things I did was clear out my desk… on top and in the drawers. This also included the filing cabinets. If you’ve read any of those organizational books they tell you to only handle the paper once.

With a garbage can and shredder near by, each piece of paper got a look and a decision made on it – throw it, file it or handle it.

It wasn’t long before the discovery of long lost papers, notes and invoices less than 3 feet from my hand. We got rid papers wasting space plus causing clutter! Not everything went into the can or shredder, some items needed action!

When something financial, a bill, credit card, insurance, etc was “discovered” it simply went into a pile which would get a more complete review later on. This also went on with my hard drive as I purged, backed up and organized things to clean the clutter out as well.

As my wife and I (by the way she is organized) started going through all the bills and papers we took the time to write down the balance, due date, minimum payment, and interest rate. We did this for credit cards, insurance, monthly bills, etc.

As all the file folders took shape we went through each one broking them into current year and archived (past years). Handling things became easier. Everything had its place.

The next step involved going through each file and looking at “what we were buying.” This included each line item on phone bills, insurance policies, cable bills or any bill. If we did not understand a charge we picked up the phone to understand the bill completely. Then we asked the question… Could we get rid of feature or service we bought each month and never used or took full advantage of.

This one exercise saved us almost $250 per month

With things in place from clearing clutter we could look at our debt to get a true picture of where we were and develop a spending plan to start eliminating debt. We had an additional $250 to begin adding to balances.

When teaching others about finance and the pain/pleasure principal I use this example.

The old bank account!

My father opened a bank account for me at a credit union when I was a young kid. The account was 30 years old. For years I’ve needed to change the mailing address on the account. It still went to my mother’s house.

Following my “less pain” mantra I finally took action. I cashed in the 103.17 in the account. Now what was the pain? The pain was:

• My mother would ask me about the account
• My wife would ask me about the account
• I would ask myself about the account
• The envelop needed to be opened
• The information read
• The statement needed to be filed
• The money was just sitting making no real interest
• A statement for taxes needed filing
• Time wasted dealing with something giving little or no value

The way to get rid of the pain was to cancel the account and take the money to pay down debt.

The end result was less pain and more pleasure. I’ve continued to keep looking for ways to get rid of the pain in my life… try it! It could change your life!

Thrifty used to be considered good quality. In today’s spend and consume it all society the thrifty in society appear to be the outcast. Even with the US consumer slipping deeper into debt, the media barking signals of “Black Friday” coming we must all still consume to keep the economy going. If you did not realize it yet… the media is about making money providing “news” through their sensational eyes. Individual and corporate spending got us as a nation into debt. We cannot stop spending, but we become smarter buyers…

Don’t always buy new. Buying a used item may not give the same feeling of joy felt in buying something in a factory sealed box does, but is that fleeting feeling worth a few hundred dollars? There’s absolutely nothing wrong with most used products on the market. People move, upgrade, and get rid of stuff more monetary reasons.

Very rarely will you encounter a used product in poor condition. With the availability of internet auction and ad sites like eBay, buying used is easier and often cheaper than ever. Big ticket items especially should be examined carefully in the used market. Whether it be appliances, electronics, power tools or other items, you can find hundreds of these products at numerous sites across the internet, or in pawn shops or your local papers.

One of the keys to buying used is to anticipate when you may need the item. If you’re in a situation where you absolutely need an item quickly, you may not feel like you have the time to buy it used. This really shouldn’t be a problem with big ticket items, as there should not be any real emergency on acquiring most of them, but it’s something to consider nonetheless.

Use Cash Is this one ever a biggie. If you don’t have the money for something, don’t buy it, plain and simple. Every household in America should be cutting up every credit card they own knowing as we now do what havoc they can wreck on our finances. The trouble is that once you get into that spiral, it’s difficult to get out, and many of you are probably forced to pay for things with credit because your cash goes towards paying the credit each month and you don’t have any left over to get ahead. Whatever you do, get out from under those cards, be they charging 1% or 20% interest rates. Don’t settle, it’s your money.

Buy Generic Many grocery stores have their own generic food brand, and the majority of them are actually of very good quality, hardly a step down from the major brands that can cost two to three times more money. Give these brands a try at the very least if you haven’t already. Just the process of saving money may make them taste all the more better alone.

These are just a few tips to spend while still saving money. There’s nothing wrong with being thrifty and there’s nothing wrong with being a smart shopper. Millions of American families wish they had the same traits right about now.