Frugal living: where to start?

I get questions about frugal living and many of them are the same, so I'm going to try to answer a few of them in the next few posts. The most frequently asked question about frugal living is simply, "Where do I start?"

You start where you are. Overly simplistic? Maybe, but let me explain.

Some people ask their question in the form of a wish list. "I want to get out of debt and buy a house. Where do I start?"

Others say, "I just want to quit living paycheck to paycheck. Is that even possible? I don't make much money so what can I do?" 


Both of these people need t start where they are, and neither of them know where they are, so that's the first step. Find out where you are. Frugal living isn't about magic or wishful thinking. It's about getting a grasp on your life. It's about controlling your money instead of letting it control you.

Anyway, if you're not sure where you are, how can you get away from it? So start here:

Track your expenses every day for at least a week. All of them, from a cup of coffee to the mortgage payment. Don't overlook anything because it's a small amount. Every penny is important for this.

Look over your expenses. Sometimes this is all that's needed to open your eyes to where you are wasting money. If not, separate them into categories, like bills that need to be paid, impulse purchases, things bought from guilt (office party, gift for someone you've ignored, etc,). Make your own categories as you sort through your records.

Now comes the fun part. Pretend that you had access to only 75% of the money that you spent during that week. What would you have eliminated? This will give you a look at the things that are unnecessary expenses.

Now you know where you are and you can get to work getting to where you want to be. Cut out the unnecessary expenses and pay off bills with it or put it in a savings account.