Home & Garden

Janet Patton: Smart spending starts with saving smarts

In junior high school, I took home economics, where I learned how to sew, make Bisquick cobbler and balance a checkbook. All useful information, as far it goes, but a girl can't live on cobbler alone.

These days, keeping a checkbook in balance is more challenging than ever, when the margin between black and red can be tighter than a hipster's skinny jeans.

Which is why I love thrifty people.

When I see someone in a grocery checkout with a fist full of coupons, I don't get frustrated. I get nosy. Where did you find those great deals?

My eyes generally glaze over at investment-advice articles, but "Five easy ways to save $5" will get me every time.

I love a good coupon blog or a penny-pinching newsletter. (I draw the line at more extreme cheapskate techniques I've seen. Cutting up old T-shirts for reusable toilet paper? No thanks.)

I comb publications for techniques that go beyond the usual, like a dieter searching for Weight Watcher Points tips.

But it turns out we really need the financial equivalent of "eat less, exercise more."

In other words: Spend less, save more.

Sounds easy, but it can be surprisingly hard to find financial fat to trim. So that's where this monthly column comes in.

As a wife and mother who works full-time, I know a few tricks. But there is so much more to learn — from experts and from you. So send me your tips or your questions, and we'll get some answers on what works and what doesn't when it comes to "home economics."

One basic problem: Many people don't know how much money they actually have to spend.

You might have a good idea of what your paycheck will be every two weeks, and you might even have a household budget.

But there is often a big hole that goes overlooked: your pocket.

"Mystery cash" is what University of Kentucky home resource management extension specialist Robert Flashman calls it.

"What's in your pocket and you spend on a day-to-day basis, what you get from ATMs, and have no idea what you spend it on," Flashman said. "A lot of people don't track that at all. They know what they pay for rent, for insurance, for a home mortgage, for utility bills, car payments. ... They have a pretty good handle on all that. ... But it's the day-to-day expenses they have no handle on, and that's a good chunk."

Flashman said people routinely dribble away as much as 20 percent of their income on everyday items.

"I try to have people track their expenditures, what they spend out of their pocket for about two weeks," Flashman said. "The problem is particularly those who use ATMs, they take $20 out, $50 out, and it's cash in their pockets and doesn't show up."

So you forget you spent it. A cup of coffee here, a vending machine snack there, lunch or dinner out several days a week. That doesn't sound like much — but it adds up quickly.

Just think: If you had 20 percent more to work with, your household margin might feel downright roomy.

So here is some homework:

■ Do Flashman's spending journal. Write down what you spend, then sort out what you can live without or do cheaper. Is it really so much work to make your lunch? Pack a thermos of coffee or a refillable water bottle from home? Stick a granola bar in your desk? Didn't think so.

■ For extra credit, go cold turkey: Put a $20 bill in your wallet and don't break it all week. Then put that $20 somewhere safe. Building a financial safety net, for many people, means they have the resources to take advantage of options.

Next time we'll look at ways to stretch those resources.