Go Ahead

he paychecks come in, and the payments go out. Cash you withdraw Monday evaporates by Wednesday. You don't live an extravagant lifestyle by anyone's definition. You even have a budget--on paper--that you stick to conscientiously. Still, at the end of every month you ask yourself the same question: "Where did all my money go?"

       If this scenario describes you, you have plenty of company. "I think when it comes to budgeting," says David Dayton of the Consumer Credit Counseling Service (CCCS) office in Kansas City, Mo., "everyone has a weak spot."
       Those weak spots differ from one person to the next, but the result is the same: You end up living paycheck to paycheck, with extra money seeming to vanish into some sort of budget "black hole."

       What budget categories trip you up? We asked three financial counselors to name the areas people most frequently overlook or underestimate.

       1. Periodic expenses. These are items you pay for only once in a while, such as a semiannual car insurance premium. Dayton says, "What many people do, if their car insurance is due every six months, is wait five months and then they'll panic." Instead, figure into your monthly budget an amount to set aside for car insurance, property taxes, income taxes, home or rental insurance, car registration, and so on. Then when the time comes to make your payment, you won't have to scramble for the money.
       The same holds true for periodic expenses that, unlike insurance, you don't get bills for, such as gifts, vacations, and even car repairs and maintenance. By setting aside funds for these in your budget each month, you avoid taking a hit when these expenditures roll around--or worse, carrying them on your credit card balance for months, even years, to come.

"One month I tracked how much I spent on coffee. It was $100."

       2. Eating out. Financial experts agree this is an easy one to let get away from you. "Whether it's buying lunch or taking the kids to get a Happy Meal,'" Dayton says, "we tend to rationalize and real quick, without looking, we spend $60 to $70 a month."
       Another food expense we ordinarily wouldn't think of as eating out is the spur-of-the-moment snack purchase. Dayton notes, "One place people drop a lot of money without realizing it is when they get gas. No matter where you go to get gas, they always sell pop, candy, and everything else. If you spend $2 or $3 on other stuff every time you fill up, you could easily be out $15 a month."

       3. The little things. Nancy Socol from the Boston office of CCCS of Massachusetts refers to these expenditures as "the ATM [automated teller machine] transactions. You get money from the ATM," she explains. "Then you buy a cup of coffee and a newspaper on your way to work, and then you go to the drugstore for shampoo and a magazine. It's odds and ends. People have no idea how much they're spending on them."

       Dara Duguay of CCCS in Los Angeles agrees that such purchases drain away more dollars than most of us realize. She describes them as "the want category"--the things you don't receive bills for and are paying cash for, here and there, like getting your nails done or renting videos.
       "You might think these are little things, but they're really not," Duguay adds. "For instance, I'm a coffee addict, and out here in California there's a coffeehouse on every street corner. It doesn't help that I'm a trainer and sometimes I have an hour to kill between presentations. One month I tracked how much I spent on coffee. It was $100; it was incredible. So even for purchases that you think aren't a lot of money, on a monthly and yearly basis they add up."
       The harsh reality is that to budget accurately for this category, you simply have to know how much you routinely spend on such items. But many of us rebel against the idea of keeping track of small expenditures. Still, Socol points out, "You don't have to do it forever. I suggest that you do it for a month to get a handle on where the money is going."

       4. Clothing. You might assume this is a clear-cut budget category for which you could allocate a set dollar figure. But many consumers don't get the full picture of how much they're spending on clothing, our financial experts say. "A lot of times," Socol points out, "people don't consider all the things that are clothing--socks, underwear, the kid's mittens. It's hard to have a feel for how much you're spending on these unless you keep records."

       5. Kids' stuff. Various child-related expenses crop up frequently that don't get figured into our budgets--for example, the soccer team fee or the cost of a class field trip.
       Another budget leak "is giving money to the children by the dole system, instead of by the allowance-based system," Duguay says. "In the dole system you give them money when they ask for it: $4 here, $7 there. By the end of the month, that may be a lot of money."

       These common budget weak spots may not match yours. To find out where yours lie, you'll need to scrutinize your spending patterns. If you do, make it a shared effort. Otherwise, "If you're tracking where your money is going and your spouse is not, it's not going to help," Duguay says. "It's like what we sometimes joke in this office: that the person who comes in is the one we don't need to see. We don't see the other ... who's across the street at the mall."

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