Saving money begins with tracking and cutting back on spending |

Saving money begins with tracking and cutting back on spending

LINCOLN, Neb. – Saving money can be challenging, but it starts with tracking your expenses and seeing where you can cut back, a University of Nebraska-Lincoln Extension family economist says.

In an ideal world, people should save 15 percent of their income, but Kathy Prochaska-Cue realizes this is not a perfect world. In this economy, it is difficult to save money, she acknowledges.

That doesn’t mean people should not try, however. Trying to save should start by tracking expenses, she said.

“You need to track where your money is going and figure out where you can cut back,” Prochaska-Cue said.

Most people don’t track their expenses, but they can start by just keeping a record for one or two months. Write down what money is being spent on and then determine where money can be saved.

For example, many people spend too much money eating out and seeking entertainment, she said. Meals can be eaten at home and people don’t have to spend money to entertain themselves. People can have fun by going to public festivals, museums or parks, or they can invite friends over for a potluck dinner or a game night.

Clothing is another area where people can over-spend, Prochaska-Cue said. Often people don’t need as many clothes as they think they need or do not need to get the more expensive brand names.

Utility expenses can be cut by lowering the temperature on the thermostat a couple of degrees then wearing a sweater.

Once expenses are cut, an emergency fund should be created, she said. Put money into a liquid account such as a money market account to cover expenses that might arise in the next six to 12 months.

Beyond that, Prochaska-Cue advises putting emergency fund money into a certificate of deposit with higher interest rates. A series of CDs can be purchased with staggering maturity dates to allow for the availability of funds, she said.

The bottom line in reducing expenses is determining needs vs. wants, Prochaska-Cue said. One positive side to the down economy is that it has taught people to be more cautious in their spending.

“That has been the big change within families,” she said. “We realize our needs probably aren’t really needs.”

More information about financial well-being is available at

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