This article is by staff writer Holly Johnson.

Recently, an old friend emailed me for help with his family’s financial woes. The confession that followed wasn’t pretty, and included tales of student loans, car loans, unrestrained spending, and empty bank accounts. It was all bad news, which I found rather surprising considering their relatively high income. So, of course, I asked about their fixed expenses. What were they?

We emailed back and forth for quite a while, and he gave a few more details of their situation. For example, their house payment was only around $900. Affordable. Car payments and student loans consumed around $450 each month. Not shocking. Then there were the expenses that everyone must contend with — things like groceries, gas, school supplies, and insurance. It was all rather boring.

Follow the money trail

So, what was the problem? This is a couple who easily pulls in six figures and lives in an incredibly affordable part of the country. Their fixed expenses were relatively low, but they were constantly coming up short on funds. Why? Obviously, something was going on, but they couldn’t put their finger on it. And neither could I.

“You guys should track your spending,” I suggested. “That’s the only way to see what you’re spending your extra money on.”

He agreed, and I said that I would check back with them in 30 days. So I waited, and waited, and waited. A month later, I emailed to see what they had discovered.

“We gave up,” he said. “It was too depressing.”

“Depressing?” I asked. “More depressing than being broke?”

Apparently so.

“The kids are always needing something,” he said. “And we hate staying home on the weekends. We want to go out and have fun.”

“But you’ll never know where your money is really going unless you track it,” I said. “Maybe you can just start over at the beginning of the month.”

“I guess we don’t really want to know,” he said.

It’s hard to argue with that.

Sometimes the truth can hurt

Although he didn’t give any more details, I think it’s pretty clear what happened. They started tracking their spending and were totally appalled at what they found. I’ve been there. When my husband and I started tracking our spending years ago, we discovered that we were spending over $1,000 on food each month … for two adults and a baby! And that was on top of the other ridiculous ways we were wasting our money. My friend was right; it was depressing.

But, unlike my friend and his family, the severity of our situation actually forced us to change. Tracking our spending made us take a hard look at ourselves and what we really wanted out of life. And we didn’t see our failure as a prison sentence; we saw it as a call to action. We used the information we gleaned from tracking our expenses to transform our lives, pay off debt, and completely redesign our future.

But my friend and his family just can’t do that right now, and that’s okay. The truth is, they’re not ready yet. It seems like most people need to hit rock bottom before they feel compelled to take drastic action. And, one thing I’ve learned over the years is that you can’t make people changeThey have to want it. They have to take it for themselves. And until that moment comes, you just have to watch helplessly from the sidelines.

How to track your spending (and why you should)

My friend’s situation is tragic, but it doesn’t have to be forever. I’m sure that he and his family will eventually tire of their situation again at some point and hopefully try again.

But what about you? If you want to get in touch with the reality of your own situation, tracking your real spending is an excellent way to do just that. Sure, you may think you’re only spending X number of dollars on your hobbies, groceries, and transportation costs, but are you? Track your spending and you’ll know for sure. Here’s how:

  • Commit to the cause — Before you get started, you need to commit to your own cause. Because if you don’t, no one is going to do it for you. Tracking your spending can be an eye-opening experience, but it’s one that won’t work without the full cooperation of your family members. In other words, don’t do it halfheartedly. Remember, you have to want it.
  • Keep receipts — You’re probably going to hate what I’m saying, but you really need to keep receipts for all of your purchases for an entire 30-day period. This can be quite a hassle, especially if you’re not used to doing it. However, it’s an essential part of the process. Embrace it.
  • Track your spending online — In addition to keeping track of all those receipts, you’ll also need to keep track of your online spending. This can include bills that are paid online, online shopping, and even credit- and debit-card transactions. The goal is to get a clear picture of all of your spending, so it’s important to include every single transaction you make during the entire 30 days.
  • Tally everything up — Once you’ve gathered your receipts and online transactions in one place, it’s time to tally them up. Start by lumping similar purchases into categories that make sense. Your categories will vary depending on your specific situation; but they’ll probably include things like groceries, restaurants, gas, clothes, medical bills, hobbies, and home maintenance.
  • Be honest with yourself — If you track your spending for the full 30 days and are shocked by the results, try not to make excuses for your behavior. Remember why you started tracking your expenses in the first place and try to learn something from the experience. If you don’t, you’re just resigning yourself to the life you’ve been living up to now. Remember where that road leads. Nowhere.

The truth is, tracking your spending is the easy part. Learning that you’ve been completely reckless? Now, that’s hard.

On the other hand, you can’t change what you refuse to recognize. You can’t tackle a problem that you don’t even understand. Tracking your spending will probably be the most painful part of your journey. Likewise, it’s the most important. Because when you see your own spending on paper — in black and white — you can no longer blame the kids or your busy schedule. You can’t complain that you “just need a raise,” or point to high taxes, the government, or anything else as the source of your woes.

We often create our own prison cells, either out of habit or laziness or because we fail to plan. And when we do, it’s easy to blame everyone else and think that escape is impossible. And that’s why tracking your spending is a crucial piece of the puzzle: It forces you to come face to face with the biggest threat to your financial future.

You.

Have you ever tracked your spending? Did it change your life?

This article is about Basics, Budgeting, Choices, Consumerism, Planning, Shopping

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This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D.’s non-financial writing can be found at More Than Money.

Here it is, 2:22 on a Tuesday afternoon. I’ve been up for more than 48 hours straight with only brief naps snatched here and there. I’m exhausted — but I’m happy. What’s the deal? Am I a proud new papa?

Well, as most of you are aware by now, I am a father of sorts. This morning at 9 a.m., after nearly a year of effort, I launched my latest project, a 52-week guide to building wealth. Like this site, the course is called Get Rich Slowly, and I think it’s the best work I’ve ever done.

Get Rich Slowly: The Course

What’s so good about Get Rich Slowly: The Course? Let me tell you!

My premise is that if people managed their personal finances as if they were running a business, they’d be more successful. I mean, we all get that a business is supposed to make a profit, but what most people fail to realize is that the same idea holds true for individuals. In fact, the more profit we make, the more likely we are to realize our dreams. (I actually shared some of this material here at the blog as I was refining it: opportunity funds, big wins, the power of profit, and so on.)

This course includes:

  • My 120-page Be Your Own CFO guide. It’s packed with practical information, all presented in a way I’ve never seen done before. I have high hopes that it will help a lot of people.
  • A weekly email series. Once a week for an entire year, I’ll send out short, powerful messages meant to motivate readers to action.
  • There’s also the collection of 18 interviews I conducted with some of my favorite financial experts. I spoke with Gretchen Rubin about money and happiness, Jean Chatzky about how to get better at spending and saving, Mr. Money Mustache on the simple math of early retirement, Tess Vigeland about the psychology of money, and many more.

There’s lots more, of course. Over the past few weeks I’ve been working non-stop on the website, on spreadsheets, and on a variety of downloadable material. I’ve done my best to create something that people will find useful at all stages of financial development. I think I’ve succeeded.

For those of you who are curious, here’s a sneak peek inside the Be Your Own CFO guide, including the introduction and table of contents:

Be Your Own CFO
You can read more about the GRS course here.
Note: Want to see more? This morning, Lifehacker published my guide to salary negotiations that’s one part of this course. (Yesterday, Productive Flourishing wrote, “The two additional resources on Roth IRAs and negotiating your salary, if applied, are worth the price of the whole product alone.”)

Whenever I work long and hard on a project, whether it’s a speech or a big blog post or a book, I get nervous. What if nobody comes? What if nobody likes it? What if they don’t think it’s as good as I do? Fortunately, the early response has been favorable. That’s a relief. It means I can sleep easy now. Good night!

P.S. I forgot to mention: This course is backed by a 100 percent money-back guarantee. If it doesn’t help you, you don’t pay for it. Check out the course over here.


This article is by staff writer April Dykman.

More than four years ago, I wrote a post for Get Rich Slowly about how to stop buying clothes you never wear. I wasn’t sure how it would go over, to be honest. We don’t discuss fashion much in our little corner of the Internet, and I also worried about being judged for my sordid, non-frugal past.

But it was a problem I’d had struggled with, and it was a problem that cost me a lot of money over the years. And in the 100+ comments on the original post, many of you said that you’ve struggled with the same problem.

So here we are four years later, and I’m happy to report that my wardrobe is even smaller and more functional today. And since I’ve picked up new tips these last few years, I thought it’d be helpful to update my original post.

But before we talk about the state of my closet today, here’s an idea of where I started…

Three closets, no space

When I graduated from college, my first apartment came with three closets — two in the master bath, and one in the hallway. I easily filled them all.

Part the problem was that I held onto things I didn’t wear or like all that much — you know, just in case. Another part of the problem was that I would buy new clothes without much consideration. For instance, I owned five winter coats, and I live in Texas.

So, far too often, things were worn once, then eventually made their way to the no man’s land that was the back of my closet. Or worse, I never wore them at all. The price tags were still attached, making it even harder for me to part with them because there was a reminder of how much money I wasted hanging from the label.

The crazy thing is that, even though I owned plenty of clothes, I somehow lacked the basic foundation for a work wardrobe.

The closet clean-out

The wasted money and the jammed closets finally got to be too much. Maybe it was the fact that I was learning about personal finance or the fact that I was reading about minimalism and the ease of a small wardrobe, but I’d had enough.

I decided to do a total closet cleanout. I donated, consigned, and gave away about 75 percent of my wardrobe.

It wasn’t easy. I felt a lot of guilt for wasting that money in the first place. But by the time I was done, it was like a weight had been lifted. There was space in my closet, room to breathe. I also could see what I really needed in my wardrobe, and as I started to fill those holes, it became easier to get dressed in the morning. And I was able to shop with a list, knowing that what was on that list would get a lot of use.

One small closet, plenty of space

That’s the Cliff’s Notes version of the story, but the change wasn’t as instantaneous as it may seem.

Even after cleaning out my closet, I’d still buy things that weren’t really my style. Or I’d buy things that fit well enough, then never wear them. Sometimes I’d return those purchases, other times I fell into old habits and kept them around. After doing a few more minor closet cleanouts, though, there was less and less waste.

Then my husband and I bought a house. The master bedroom has two small closets — a his and a hers. My brother-in-law jokingly asked if my husband would really get his own closet or if I would claim some of his space, and I just smiled. I was actually excited about the size of my closet — it was the perfect size for my small, well-curated wardrobe.

How to only buy clothes you’ll really wear

In my original post, I talked about how to clean out your closet. So if your closet door is bursting at the hinges or if you just have a lot of stuff you don’t wear, head over there for tips on how to get rid of it.

When you’re done cleaning out your closet, you’re probably going to feel a lot like this guy. But resist the urge to go clothes shopping right away. Here’s what to do instead:

1. Think “meat and potatoes.”

One of my favorite bits of advice came from designer Michael Kors: “70 percent of the clothes you own should be meat and potatoes. 30 percent should be icing and fluff — that’s color, pattern, shine, accessories. Too many women get the proportions the other way round, then can’t figure out why they can’t get dressed.”

Take a look at your closet, and figure out if you have enough meat and potatoes. Do you have enough basic black pants for work? Or a pair of nice dress shoes that will go with virtually everything?

If you don’t know how to identify gaps, look at a list of wardrobe essentials and see what you’re missing. (Some must-have lists aren’t very realistic, but I think Alison Gary at Wardrobe Oxygen has great advice for both women and men.)

2. Dress for the life you live right now

The life you live right now includes factors like lifestyle and even the climate where you live.

For instance, an attorney in her 20s has very different clothing needs than a 35-year-old stay-at-home dad. Also, “it’s important for the largest part of your wardrobe and seasonal fashion budget to reflect the dominant seasons where you live,” writes style consultant Angie Cox of You Look Fab.

If you buy the majority of your clothes for a fantasy version of your life instead of the reality, you’ll end up owning a lot of clothes and having nothing to wear.

3. Figure out your “uniform”

This is a new tip I’ve picked up — the idea of a personal uniform.

“If your wardrobe contains sequins, camouflage canvas, distressed denim, glazed leather, monkey fur, plaid kilts, and gold lamé cocktail dresses it may be fun to look at, but it’s not as fun to dress for the every day,” says Gary. “Having a signature style is easier on the wallet, easier on the soul when getting dressed each day, and better for your personal style.”

That doesn’t mean that you have to wear the same thing every day. It just means figuring out what looks good on you and what you like to wear — the items that are always in the wash or at the dry cleaner’s are a good place to start.

Since I work from home now, my uniform has become straight leg jeans, a nice, drapey tee with a scoop neck, a long necklace, and flats or sandals. When I buy those things, I know they won’t sit in my closet unworn.

4. Consider fit and fabric

I used to own 15 pairs of jeans, but I only wore three pairs. The ones I didn’t wear were made of stiff fabric and looked okay on me but not great. The three I did wear were made from high-quality denim and made me feel like this.

My take on this is still the same. For fit, clothes should never gape, pull, or fit the person you want to be 10 pounds from now. Either don’t buy those things or, if a tailor or seamstress can solve the problem, have them altered.

As for fabric, you really don’t have to be an expert. Does it feel good and drape nicely, or does it feel cheap, like the sort of thing that will fall apart in the washing machine after one wear?

5. Watch out for high prices (and low ones, too!)

Sometimes it makes sense to pay more for quality. However, if you find a great pair of pants for $30, they are a better buy than the designer pants that cost $200 and fit you kinda funny. So as long as something is within your budget, price should be a secondary concern.

Also, beware of the clearance rack. I’ve taken many things home with me because they were a good deal, and then I barely wore them. Today, I ignore the discount and only buy something if I absolutely love it the minute I put it on. It has to feel great and look great and work in my existing wardrobe, or else it doesn’t come home with me.

6. You can always return it

If you get home and decide you don’t like something after all, return it as soon as possible. I like to shop online, so I’ve become very disciplined about returning items I don’t want within a week, long before the return policy expires.

And you have to do what works for you, but I don’t buy anything on final sale anymore. That bit me in the bank account twice, and after that I decided that if there’s not a return policy, I’m not buying it.

7. Be a little ruthless

Another source of extra stuff in my closet used to be gifts, like a sweater given to me by a loved one.

This situation is hard because I feel like a jerk for getting rid of their gift. On the other hand, I don’t want to hang onto something that I know I’ll never wear.

So, I donate it. I still feel a little bit bad about it, and I worry about some scenario where they’ll ask me about it later, like, “Oh, show so-and-so that necklace I bought you last Christmas!”

But, I’ve had to learn to be a little ruthless. And besides, the gift always goes to a good cause, and hopefully to a closet where it’ll actually get worn!

Those are my tips, but I’d love to hear from you! Have you struggled with buying clothes you don’t wear? Do you have any tips for how to only buy stuff you’ll really wear?


This article is by staff writer Lisa Aberle.

No matter what I do, we’re still spending more on food each month than I want to be spending. Two of my weapons in the battle to lower my food bill that I haven’t talked about yet are Aldi and bulk-food stores.

One thing I don’t like to do is stop at several different stores, so I don’t shop at all stores every week, or even every two weeks. Both these stores are small, and I prefer to shop at these stores instead of Walmart or other huge stores. (Does anyone else get exhausted by the sheer number of decisions, people, and products in the huge stores?)

Positives about Aldi

Aldi and I go way back, but it wasn’t a pleasant start. As a college student, I shopped there because it was cheap, but I didn’t always like the food. I think they have really improved their products since then, however, plus I like several things about the store. But first you have to find one. Aldi stores are found in 32 different states in the US. There are two within driving distance from my house.

Once inside, it looks different than your normal grocery store. Everything about the store has a streamlined approach. First, you “rent” a shopping cart. You must put in a quarter in the shopping cart, and you get your deposit back when you return the cart to the corral. No runaway carts to ding your car in the parking lot, and no employees needed to drive the carts back to the store. Second, you’re charged for shopping bags, so most people bring their own. If you forget your own bags and don’t feel like buying theirs, you can grab empty boxes from the shelves.

The stores have a small footprint, which cuts down on their utility and construction costs. The smaller store has another benefit too: It doesn’t overwhelm me. Still, it’s large enough to have a wide variety of products. Most of their items are Aldi-specific brands that may taste different than the brands you’re used to; however, as I mentioned, I think their products have improved. If you don’t like a product, they offer a double guarantee on most items. In other words, they replace the product for you AND they refund your money.

According to their website, they staff each store with three to five people at a time. This means the staff members need to be efficient — and they are. I have never seen faster cashiers. Since you bag (or box) your own groceries, the (seated) cashiers can concentrate on ringing up your items at lightning speed.

Most stores don’t have a phone system, so no one has to answer the phone. They have very few shelves, but instead keep their products in boxes. That speeds up the restocking process, for sure.

This streamlined approach allows the store to operate with a lower overhead. But the customers aren’t the only ones who get to take advantage of all the cost-saving measures. I’ve heard that Aldi employees are paid above the industry average (though I couldn’t confirm this).

Negatives about Aldi

They don’t accept checks, credit cardscoupons, or WIC. In addition, while my Aldi has good produce, I’ve heard stories from other locations that tell of produce that doesn’t last as long or taste as good. But that’s not necessarily true. The last time I bought a fresh pineapple, I paid one dollar for it at Aldi and it was as delicious as any pineapple I’ve had. Complaints extend beyond produce too, if you believe the comments on other Internet Aldi articles.

Also, they don’t have everything. Some stores sell beer and wine; some don’t. Many times, they don’t have trendy foods like coconut milk or greek yogurt. (Wait … are those trendy foods? You know what I mean, right?) They also seem to stock a lot of processed foods.

Shopping at Aldi is like an initiation into a secret club. You’ll know what I mean if another shopper gives you a quarter to take your shopping cart.

Aldi seems to be polarizing: People seem to love it or hate it. Have you shopped there? What do you think?

The bulk-food store

My second weapon is a bulk-food store. I’m not talking about buying in bulk, like getting giant jars of pretzels from Sam’s Club. Instead, these small stores get the food in huge packages and then divide it up for you. While I think these usually small stores may be rare, such stores have been within a couple of hours of all the communities I’ve lived in. Yours may be masquerading as a health-food store.

Not all products are less expensive here; but I have found that spices, oatmeal, and nuts are good buys. Speaking of oatmeal, our family consumes a lot of it, so I buy it often. At 89 cents per pound, this store has been my least expensive source for oatmeal. In addition, they sell specialty items that are difficult to find elsewhere in my rural community — things like different types of gluten-free flours, nutritional yeast, and coconut oil can be found here.

But the “bulk food” concept is found in other places too. I have also seen bulk bins in the standard grocery store. I like these because you can buy as much (or as little) as you need, which cuts down on food waste. And the price is usually the same.

By buying certain products at these two stores, I am spending a little less on my grocery budget. Do you “store hop” to save money? Have you found that some stores have some products that are consistently less expensive?


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