Audit Yourself to Cut Expenses (Frugal Friday)

This past week I spent some time listening to talk radio. I never do that, but I was alone in the car and hubs had left the radio on. The discussion was about the current budget talks. Oh my! Not going to get into a political discussion here, but I will say that it got me into a rather contemplative mood.

Our economic climate is distressing, to be short. But, my mind kept going back to individual responsibility.

How we operate as individuals effects how we operate as a community.

  • Am I compassionate toward the poor?
  • Am I responsible for my own actions?
  • Will I stand by my commitments?
  • Will I pay my debts?

We have become a credit culture, spending money we don’t have. And cultures are made up of individuals. How we act independently matters.

So, how can I impact the national debt? Besides being an active participant in the political system, I can be more responsible for the monies at my disposal. And to do that, a self-audit is often necessary.

Audit Yourself

A self-audit is necessary to see where you’re spending your money and what you can do to cut expenses. It’s a great practice to get into — and “should” probably be done at least once or twice a year.

If you have Quicken or some other accounting software, an audit can be quick and easy. Simply generate a report to show where you’ve been spending your money over the last quarter, 6 months, or year. Then go through each line to see what in the world you’ve been buying.

Otherwise, look over your last few bank statements and take a walk down memory lane. Where did you spend your money? Look at your bills? What are you paying for on a regular basis?

Pay Your Stupid Tax

Brace yourself! You may end up smacking your head a few times. You’ll see some really dumb expenditures. Even the most frugal among us can experience buyer’s remorse. As Amy pointed out,

Purchasing that cute shirt at a discount seems rational, until you get it home and realize it doesn’t fit… and then you never bother to return it.

Dining out with a free meal deal is fabulous, unless you have to spend outside your budget for the rest of the meals to get one “free.”

It’s smart to build a stockpile with items that have been purchased for a few cents,unless you’ve purchased so many that you end up throwing them out.

This walk down your Financial Memory Lane may stress you out a bit. This is actually a good thing. Recognizing mistakes is the first step toward changing your behavior.

Dave Ramsey calls these financial faux pas, “paying a stupid tax.” Yes, it was a dumb purchase, I’ll pay my tax and move on. Just shelter yourself from that kind of tax in the future.


Consider your spending.

You can do that by asking yourself some probing questions. As you examine your regular expenses, consider how you can operate differently. Look at cable, utilities, memberships, subscriptions, items that you pay to maintain, storage costs, cleaning expenses, and all the other line items that are recurring costs.

Ask yourself:

  • Is this necessary?
  • Could we live without it for a season?
  • Could something else replace the function of this item for less money?
  • Am I paying for stuff I don’t use?

Being honest with yourself about your spending habits is not a fun thing. We have to come to terms with mistakes. Pride sometimes has to die. But, it will make a difference in your budget, in your life, and yes, even those around you.

How we operate as individuals effects how we operate as a community.

If you are a military or other federal employee facing a possible furlough, you will want to go read The Happy Housewife’s tips for making ends meet for the duration.

How do YOU save money?

Share your money saving tip in the comments or link up your money saving post below. (Please link back to lifeasmom.com so others no where the party is.)

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Comments

  1. I love that you included pictures of Target clearance. I’m guilty of snatching my share of their “bargains” and then realizing later that some of what I’ve bought, I never wanted in the first place.

  2. Since I’ve moved every year for the past 4 years, I’m constantly doing a self-audit. When you have to choose whether or not to move something, you often realize that a purchase was a mistake. Or, you realize you already owned it and now you have an extra one. And, yes, it can be a painful experience, but it certainly puts a damper on consumerism (always good IMO).

  3. Like Betsy, we move frequently and that is one of the greatest motivators for keeping the “stuff” to a minimum. I have to watch that I don’t fall into the old trap that you “either have time or money” and pay for things I could do myself for much less when I am feeling stressed.

  4. You’re right. It’s so important to check yourself with every purchase. Even if it’s on sale. I’m guilty of buying a few pants just because they were $2 after using a $5 coupon at Target! Don’t really need 2 more jeans.

    Lately, I’ve had to remind myself to check the receipt before walking out the store. Even forgetting that simple routine has caused me extra time and miles just to return something or price-adjust.

    Thanks for the reminder- I feel convicted to act!

  5. Sold Advice. I’ve become much better at avoid impulse items (even if they are on sale).

  6. This is a great idea! We are still stuck at the recording expenses stage, though. Dumb, dumb, I know ! Somehow I can’t get that all together….

    So I just spend as little as possible and hope that works out. LOL

    Annie Kate

  7. Yes, I have smacked myself on the forehead a time or two. And I get determined to turn this habit around! I pick things up and set them back down a lot in stores, and I sometimes return items as well. My link is my tips on consignment. Currently weighing decisions regarding consignment shop and gas to drive to another town vs. the tax deduction on donating in my town.

  8. That is so great! We are planning on canceling cable because it is so unnecessary AND it takes away from what could be family time! I buy TONS of clearance things :) but never for myself always for my kids and for when they get older… so we have stuff for my unborn child for when he is two… not really necessary. It’s funny because I’ve always had to be a very frugal shopper b/c I never really had money but now that I’m married and we are doing pretty good I don’t question buying things as much as I used to, so definitely need to get back to that mindset. We are in the military and the things going on in the news could effects us and we are just grateful that we have our 6 month emergency fund plus savings and a budget that helps us see what we really NEED and not all the other stuff that we just want and could go without!

  9. I have to stay out of Target (or go straight to get what I need and straight out) to keep away from the clearance clothes racks to avoid needless spending!

    I posted about how I wash my hair with baking soda – about the cheapest way to do it!

  10. I love the idea of the “stupid tax”. You have to pay money to make money and in that case, you are paying for an education:-)

  11. Thanks so much for hosting! You are right…. even us frugalistas can make changes. Always good to check up on yourself! thanks:)

  12. I remember reading something about how money is wasted in items that should have been returned but never were – definitely a stupid tax!

  13. I linked up what we did this past February. A complete spending freeze. The only money we allowed ourselves to spend were on fixed bills and a small weekly allowance for groceries and gas. We did it and learned alot!

  14. I’ve been making an effort to be much more selective with clearance, yard sale and thrifted finds. I noticed how many of these I just got rid of in a recent yard sale! I’d rather use that money for better purposes.

  15. Thanks again for hosting all of these great tips!

    I am sharing Part One of my series on How and Why to Dehydrate. Part One is about saving money. Part Two is about Saving Time and Space. Part Three will be posted soon on Increasing Nutritional Value of Foods.

    Happy Savings!

  16. centsability says:

    We pay cash for everything other than cars and our home. We look for ways to fix up or re-purpose what we already have (good for the environment too!) rather than buying new. For instance, our second daughter was born 5 1/2 years after our first. The stroller manufacturer for my jogger stroller no longer sold the replacement tires we needed, so we took the stroller to a bike shop — they fixed the tire (by replacing the inner tube — doh!) and also tightened up the brakes for less than we would have even spent on a replacement tire, let alone buying a new stroller! We saved at least $100+ over buying a new stroller.

  17. I’ve been doing a bit of a financial audit on some of our “services” at home – phone, TV, Internet, car insurance, etc. – and I’ve discovered several areas where we could save money by making some adjustments. You get comfortable with the plan or company you’ve used for a long time and don’t realize that there may be better offers our there now compared with when you first signed up for that service! It’s good to audit and revisit your expenses once in a while!

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