Chronicle Your Spending
The phrase "knowledge is power" may very well be cliché, but it certainly has more than a grain of truth to it when it comes to saving. Probably the very best way to understand -- and most likely change for the better -- how you and your family are spending money is to know exactly where every penny goes. To do that, many financial experts suggest keeping a so-called money diary for at least a week, though a month would be better.
In it, you record every cent that leaves your wallet or bank account to pay for bills, food, utilities, entertainment and everything else. While it may seem like a pain to keep this sort of record, the results are almost guaranteed to shock you. Who knew you spent $50 per month on bagels or lattes? Once you have a clear picture where your money goes each month, it's much easier to prioritize and actually come up with a budget that reflects what's truly important in your family's life. Sharing what you find in a money diary with family members is also a way to trigger a conversation about what is most important spending-wise as a unit, a vital exercise if everyone is to pitch in and help save.
Go the next page to discover why generic can be better.