Frugal progress. . . .

There was a fair bit of interest in my zero-based budget, which I wrote about in more detail last Monday. This type of budget, in which each dollar is given a 'home' before it ever reaches your checking account, has helped me live within my means, and also increased my savings (right now, I'm saving for 'regular' expenses like tuition, and the rest of my money goes toward credit card debt).

I created a spreadsheet below that shows the recent history of my spending and saving rate. You can see that in October of 2007, just before I really got serious about living within my means, I was spending 106% of my monthly income. In November, I began tracking every penny that left my life, and I managed to 'only' spend 103% of my income. As I continued cutting unnecessary expenses out of my life (cable, expensive auto insurance, and clothing, among other things), my expenses relative to my income shrank even further. December is a bit of an anomaly, as I somehow made much more money, but also spent more, for obvious reasons.

In February, I began using a zero-based (or zero-sum) budget, and you can see the result: I managed to spend 89% of my income! And, my savings increased from $0 to $181! During each month since then, I've experienced a decrease in my spending as a percentage of the money I bring in (plus, I've challenged myself to increase my income, which helps). At the same time, I've added new sub-accounts to my ING account, to which I send money before my grubby little hands can make a lunge for it.

I thought this might be interesting for those of you who are considering this type of budget for yourselves. As I mentioned in a previous post, it's wonderful to track your spending---but telling your money where to go before you get it is the crucial second step to increasing savings and becoming more financially secure. It's certainly worked for me.