Tracking Expenses

This is the most fundamental task that you have to do - track where your money is going.

This may sound mundane but it is crucial. If you don't know where you money is going, how are you going to save.

Do you know how much you spent for food this month - inclusive of groceries and dining out? Do you tend to eat a lot of fast food? While fast food is bad for health - increases your insurance premium when your weight increases - consuming it often cuts deeply into your budget.

Do you pay yourself monthly?

For starters, take a A4 size paper and draw a line in the middle. On the left hand side, list down your income.

On the right hand side, list down your tax deductions and monthly retirement fund contributions. Then list down all your monthly expenses. Please make them as accurate as possible.

If you can do this in Microsoft Excel, then you can draw a pie chart which shows you the smallest and largest expenses in terms of percentage - this gives you a bird eye's view of your monthly expenses.

Or, if you can afford a financial software, Quicken 2008 Deluxe and Microsoft Money, is a good buy. Both softwares will help you manage your financial portfolio but examining your spending habits and making suggestions.

But if you cant afford them, Microsoft Excel will do fine.