Posted by Lending Club :: January 2, 2009 @ 9:12 am

Everyone is worried about the economic collapse, about the failing banks and the dropping stock market. I am too, but what can I do about it? Nothing, so instead, I try and focus on the things that I can change. One of the most basic things I can do is to change my spending habits.

Although you have been told to lower your spending or to spend more wisely many times, have you ever actually monitored your own spending? How much do you actually spend every month?

Ever since I started traveling outside of the US, I decided to keep track of exactly how much I am spending. Using some resources from my favorite personal finance book, Your Money or Your Life, I began keeping track of the money I spent, categorized by the type of expense. At the end of the month, I tabulated all of my expenses, broken down by category, and looked at how each category affected my happiness and feeling of satisfaction. Was I glad I spent 75 dollars to eat out in one week? Or did I feel more satisfied cooking dinner for a dinner party? By noting my spending and answering some questions about my habits once per month, I developed a personal spending plan for myself.

Over the next few articles, I'll write a detailed strategy for creating your own personal plan. You will learn how to track your spending, how to decide which purchases were worth it, and how to push yourself towards good spending habits. Stay tuned!