Good Economics-Only a Note Card Away

Bill Staton

Physician's Money Digest, May 31 2004, Volume 11, Issue 10

How much money do youwaste every month and year?My guess is between $300and $500 a month and$3600 and $6000 a year at minimum. Ofcourse, physicians earn a higher than normalhousehold income. Therefore, theyprobably waste more as well.

Getting Back to Basics

oikonomikos

oikonomos

I teach a junior achievement appliedeconomics course at a nearby school. Thefirst day of class we talk about what economicsmeans, why it's important, andwhere the word comes from. Economicscomes from the Greek word or , which refers to "managingyour household." The first recorded use ofthe word economy was in a book aboutthe construction of a monastery, whichwas written around 1440.

Although today economics includesthe economic system of a state or nation,the word still refers to managing yourfamily's income and expenses in an organizedmanner. And when we think ofbeing economical, we think of the wordthrift. That's because becoming financiallycomfortable requires being thrifty—but not cheap. There is a big differencebetween the two concepts. Eliminatingwasteful spending is one way to bettermanage your household and reduce theworries you have about money.

Highlighting Spending

There is a simple way to spot the leaksin your financial ship. For the next weekcarry around a note card and pen.Outside of your ordinary bills write downevery expense over $1 and what themoney is spent on. It doesn't matterwhether you use cash, a credit/debit card,or a check. You will quickly begin to seewhere a lot of your money is going on adaily basis and easily discover some obviousleaks you weren't aware of.

At the end of the week—don't do itbefore then—categorize your expenses.Create expense categories such as trips tothe mall and ATM withdrawals. Then addall your expenses up. Now you've got agood handle on the money you're wasting,most likely without even knowing it,and you can immediately take steps toeliminate that waste.

Bill Staton is chairman of StatonFinancial Advisors, LLC, a moneymanagement firm. Join his freeweekly "Dollar-Bill Club" and receivea no-obligation trial subscriptionto his weekly "E-Money Digest"by e-mailing him. His newest book, coauthoredwith his wife Mary Staton, Worry-Free FamilyFinances (McGraw-Hill Trade; 2003), is available atwww.billstaton.com and through all bookstores. Hewelcomes questions or comments at 704-365-2122,704-365-1910 (fax), or bill@billstaton.com.