Frugality 101: Where to begin?

July 31, 8:41 AMCharlotte Frugal Living ExaminerMelanie Weaver

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Alright, folks; now that you've taken to heart some of the great reasons to be frugal, you're ready to start cloth-diapering your kids, washing out Zip-Loc baggies, and dumpster-diving for discarded produce from grocery stores, right!?  Relax!  As with any major lifestyle change, developing frugal habits takes self-examination, time, and learning from the countless mistakes that you'll inevitably make.  And, you may decide that the above practices are too extreme for you; that's absolutely fine.  Frugality is a process, and sometimes we have to pick and choose the things that we are and aren't willing to do.

Quite honestly, the first step is relatively simple.  Observe.  That's right; just observe your current habits to see where you are on the frugal scale.  You can't change until you admit that you have a problem, right?  And you can't admit that you have a problem until you can see it.  So, the first step is to take a period of time, maybe a week or two, maybe even a month if your bills run in that cycle, and track your spending to see how it breaks down.

To do this, use a sheet of paper (or an Excel spreadsheet, or whatever works best for you) and list the following categories:

1. Housing.  This will include your mortgage or rent.
2. Debt repayment.  This should include the amount you pay on your credit card(s) and any car loan or loan for anything that  you currently have financed (furniture, electronics, a boat or RV, maybe a second mortgage).
3. Groceries.  This one's pretty self-eplanatory, but you can also include your toiletries and household cleaners here.
4. Misc. Necessities.  Here's where you'll include your various insurance payments (homeowners/renters, car, health, life), your prescription medications, and your phone or cell phone bill.
5. Entertainment.  This one will include eating out/takeout (coffee included), non-necessity buys (clothes, toys, home decor), recreational activities (vacations and trips, amusement park entry fees, trips to the movies, etc), and (gasp) cable TV and sattelite radio, magazine subscriptions, and things of the like.
6. Additional expenses.  If you don't know where it goes, list it here.  We'll tackle it later.  Be a little more detailed with this category, though, since it's a "gray area."

This probably sounds a little daunting, yes?  Don't make it that way...just jot down the date, what you did, and the price.  Detailed breakdowns can come later, but for now, you only need to focus on what major categories eat up most of your income.

So, what are you waiting for?  Get crackin'!