Mind Your Spending

People have short-term memory loss when it comes to their money. How many times have you withdrawn $20 from the ATM in the morning to find yourself later in the day down to nickels and dimes and asking yourself, "What did I buy?" One way to rein in overspending is to keep track of where you are spending money. Most of us aren't blowing our dough on Rolexes at Kay Jewelers. More likely than not, your money is being siphoned off by small- to medium-sized impulse purchases. Let's say you whiz through the Dunkin' Donuts drive through on your way to work everyday and order the value combo No. 2. At $2.89-plus-tax a day, that's nearly $714 a year—and that's counting two weeks off for vacation. Keeping track for a few weeks can be very illuminating, but if you just can't bring yourself to do it, then pull out your bank statements. If you live and die by your check card, all the gory details will be spelled out for you in black and white. Want tome more overspending advice? Add up how much you spent eating out, at the movies, or at the shoe store, and do it every month. Set a short-term goal, such as paying off your car loan six months early. You don't have to stop eating out, going to the movies, or buying shoes. But doing so less often will help you achieve your financial goals. Achieving those goals will be gratifying and will reinforce the notion that less is more satisfying.