With the problems in the housing market right now, it's easy for some people to forget that any money owed to someone else is debt. There is another kind of debt that isn't as obvious, and this kind of debt is often what gets people into trouble financially.
If you can't think of a better word, you could call this kind of debt "self-serving debt." It comes from the money we spend every month on things that don't have to come with a monthly bill. Consumer debts are things like car loans, mortgages, rent, and credit card bills. It's hard to forget about those, especially since we get statements at the end of each month that remind us. Quiet debt is different. It has to do with the things we buy during the month that we need or think we need.
Many people are surprised by how much they spend on things that aren't usually considered debts over the course of a month. Things like buying groceries, gas, entertainment, or clothes with money. The list is long, and it's different for each person. But one thing is true for everyone: these costs can add up.
People who often run out of money at the end of the month might want to make a quick and easy list of their expenses to figure out how much they are spending each month. These lists don't have to be accounting masterpieces; they just have to show what is bought each day.
Keeping track of daily expenses is easy if you buy a small notebook that fits in your pocket or purse. When you make a purchase, you can write it down in the notebook. It's important to keep track of all purchases, no matter how small. You can add up the entries at the end of the day or at the end of the week to get a better idea of how much money you are spending. This gives you a good estimate for the month if you multiply it by four.
But information is just the beginning. Once you know where your money is going, you can start to think of ways to cut back or get rid of some of those purchases. This is the hardest part for most consumers. It's never easy to be financially responsible, especially when we have to train ourselves not to buy the things we want.
Even something as simple as lunch could be an example of this. If you spend ten dollars on lunch every day, Monday through Friday, that's fifty dollars. Two hundred dollars a month is equal to fifty dollars a week. That's a lot of money for some people, and most people could easily put it away.
Spend some time looking into how you spend your money, and you might be surprised at how much you can save each week and month.
