Ok, so we all like going out for a coffee.  I love it personally.  I don’t actually have an office, I have a coffee shop for an office.  It saves me money.  But if I didn’t have to use it and I had an office somewhere then I wouldn’t use a coffee shop at all: here’s why.

So a Latte has about 250 calories for a full fat.  4 of those a day and you are half way to your recommended daily intake.  But that’s not the biggest problem with a latte.  The problem is really financial.

Consider for a moment that you are rushing into work and you decide that on the way you are going to stop to get yourself a drink before you nip into the office.  You have your routine, it’s dead easy. You go into the office carrying your foamy morning starter, and settle down with the newspaper or to the morning’s emails.  It’s a bit like an athlete warming up for a race, and this is how you warm up ready for the day ahead of hard work.  The telephone calls.  The hassles.  For you, it’s the only pleasure that you have in life.

Wrong.

It’s not a pleasure, it’s a deadly sin.  Well not actually a deadly sin precisely, but it is going to do your bank account no good.  That latte in the UK costs about £2.00.  Get one of those every morning and it will cost 5x £2.00 x 45 weeks of the year.  That’s a staggering £450 a year!  Now, add to that the possible nip out to the deli for lunch every day, and you will be tipping your financial scales as heavily as your bathroom scales.  Over £1000 a year?  Groan!  That’s bad.

So, here’s a solution.  Set the alarm clock 10 minutes earlier.  Seriously.  Because if you do that then you can spend the time making a flask of coffee and a much more healthy snack and/or sandwich.  Total cost will be about £1.00 a day, which is a much more reasonable figure.  Can’t face that as a morning routine?  Then do it the night before!

If you don’t believe what I say, then start budgeting and watching the cash flow.  If you were in small business accounting using their software everyday to look after your figures, then you probably wouldn’t have too much of a problem picking up on these numbers. But if you are like me then you will probably want to consider something more practical and user friendly.  There are a variety of excellent home softwares, and it’s worth consider some of the excellent free home accounting software that is available online, though you need to be careful of potential security issues.

There are plenty of people, that think a budget is not really necessary, and perhaps your one of them.  Sure, you may be getting along without one, but maybe you’d like to be doing a little better financially.  Maybe it would be nice to have a little money left over in the bank account at the end of the month.  Perhaps you could use a little extra money to take that nice vacation your spouse keeps talking about.  A better school for your kids?  A nicer house, or maybe finally you can replace that old car without going in too much debt.  Taking control of your expenses and revenues, and understanding in detail where all the money is coming from, and where it is going to is essential to making changes in your life.

Now that I’ve convinced you a budget can be a good thing, the next step before starting is to get the right perspective.  First and foremost, you need to be brutally honest about the numbers you put into your budget.  While the revenue side of things, is usually not too hard.  Your pay check is what it is.  It’s the expenses that can be tricky for some people.  If you spend $300 per month on going to the movies.  Or you spend $500 on cigarettes  and booze each month, then you need to record that accurately into your budget spreadsheet.  No one else has to see this but you.  A personal budget is not about right or wrong, it’s about understanding where the money goes to each month, and ultimately deciding if those things are a priority for you.

It’s always good to start with you actual living expenses in the beginning.  So, grab those utility bills, credit card statements, phone bills, and check book to get started.  There are certain expenses that are avoidable for living, and those all need to be recorded.  Remember, in the initial stages, it’s important to be as accurate as possible.  Once that’s all completed, then you can start thinking of prioritizing and making alternative choices when it comes to your money.

What you will likely find, is that spending less money doesn’t always mean doing without.  Sometimes yes, but not always.  Perhaps your cell phone plan has got more features on it than you use anymore.  Come renewal time, it would be a good idea to pick a plan that more closely reflects your use.  For instance, do you have a land line, and a cell phone?  Many people these days are dumping their land lines altogether.  When everyone in the house has a cell phone, it does seem to make an extra home phone superfluous.

If your doing a budget these days, then chances are there’s a reason for it.  Either your income has been substantially reduced, or your considering a lifestyle change that will require more funds.  Either way a budget can be a big help.  When taking on a major financial purchase like a new home, car or boat, it may be a good time to keep the little daily expenses in check.  Give your credit card a break, and cut back on the little stuff for a while.  One final point to keep in mind.  Once you have a budget plan worked out, be sure to stick with it.  That’s the whole point isn’t it.  It will take a little discipline, but after a few months or weeks it should become habit.