To reduce your spending, you first need to know where your money goes. 1
1. Keep track of all of your expenses for a month.
None are too small or insignificant: the daily newspaper, coffee on the way to work, an extra gallon of milk, that burger at the fast-food outlet. Next, categorize the expenses so you can see what you spend and where you spend it. Be sure to factor into your monthly expenses a pro-rated portion of the annual cost of your irregular expenses (e.g., clothes, gifts, car maintenance, insurance premiums).