Sunday, May 27, 2012

Manage Your Money - Step# 1: Identify Your Expenses

"Fighting something that you cannot see is a losing battle."

Lesson number one. Identify all your regular monthly expenses.

When I first started managing my money, that was 10 years ago, I never thought it possible to write all of my expenses. Maybe you fell the same way. Let me tell that it's very possible, and if you really want to manage your money, you have to. In a battle, this is like sizing your opponent. You can't just charge forward without knowing what your up against in.

Grab a pencil and a piece of paper or open a Microsoft Excel spreadsheet. But before you start working on your list, just a few of guidelines:

(1) Write only regular monthly expenses
(2) Be as detailed as possible
(3) Modify your list over time

Below is a 'basic' example of a monthly expense list to give you an idea.

(1) Rice (for Asians like me)
(2) Food (minus the rice, of course)
(3) Purified water for drinking
(4) House expenses (soap, detergent, insecticides, etc.)
(5) Vitamins
(6) Milk and diaper (specially for those with children like me)
(7) Tuition fees (specially for those studying or with children)
(8) Gas (for those with cars)
(9)  Electricity bill
(10) Water bill
(11) Telephone and mobile phone bill
(12) Car/house amortization
And so on and so forth.

Your list could be very different from the sample list above. It's OK as long as these are all your regular monthly expenses.

Don't worry if you couldn't list all of your expenses the first time. This list is normally updated from time to time.

Now play your favorite music - I am playing 'Soldier in the Rain' now - , and start working.


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