Keep up with 'lost' money in your budget

Most unaccounted for cash is spent on groceries.

http://www.flickr.com/photos/spiderpop/ / CC BY 2.0

About $21 per week in cash spending can't be accounted for by the average American, says a survey commissioned by Visa.
Most of the 1,000 adults surveyed couldn't account for money spent buying groceries. Others couldn't account for money spent during a night on the town and dining out.

Worldwide, people don't know where 20 percent of their cash purchases went.

In younger adults 18-24, $2,500 is unaccounted for per year in the U.S. The poll has a margin of sampling error of plus or minus 4 percentage points.

Since the poll was commissioned by Visa, and only unaccounted for cash purchases were considered, it's likely Visa hopes we'll start putting more purchases on their credit cards. But another way to keep from losing track of these purchases is by using The Easy Budget. It works whether you're spending cash, debit, credit or check.

Does The Easy Budget work with all currencies?

Q. I notice that the cover of "The Easy Budget" features a big dollar sign. Is the budget workable with other currencies?

A. Certainly! Since I get paid in dollars, and dollars are what I spend, I wrote the book from that perspective. But you can substitute any currency: pounds, euros, pesos, yen. For that matter, you could use this system if you traded in pelts or beads. And it will still work long after folding money is a distant memory.

You can buy the book on Amazon.co.uk here.

Photo used under Creative Commons license: http://www.flickr.com/photos/poolie/ / CC BY 2.0

What do you do with found money?

How you budget found money is, of course, up to you -- and it depends somewhat on how much it is. Ten dollars in your Christmas card from grandma can probably be put into Miscellaneous or Entertainment. It would seem silly to divvy up such a small amount; you'd have only tiny amounts in each category. A larger amount, however, might be divided into your various categories -- or put into savings.

If the money is something you'll have to report for taxes, don't forget to take out about a third of it to pay them. Put it in an interest-bearing account to make more money while you're waiting to pay the IRS.

The exception to splitting a large amount of found money into your various categories would be a need to make a major purchase, such as a car. In such a case, use the found money to buy the needed item, and if a large amount is left over, spread it over your budget or save the rest.

Creative Commons photo courtesy: http://www.flickr.com/photos/51486173@N00/223052548

Why do you have zero in Miscellaneous?

Q. I noticed in the picture of your own budget in the e-book that you dedicate zero dollars to the Miscellaneous category, and you also have a category labeled Biz that has zero dollars even though you have money in those categories. Why is that?

A. My own Miscellaneous comes out different from week to week because some of the monthly bills I pay come from that category. Some of those bills are irregular, making my budget come out wrong. I just put zero there, and count things out once I've been to the bank. Using this method, I end up with more in my pocket than my budget shows, so I just add however much extra money I have to Miscellaneous.

As to the Biz category, I take 10 percent of any money I make from freelancing and re-invest it there. Since I don't take any of the money from my regular paycheck for that category, it says "0" at the top.

The Easy Budget e-book available now

Finished your Christmas shopping? It's time to start on your New Year's resolutions, and atop that list should be getting into better financial shape. It's not as hard as you think.

"The Easy Budget: How to Always Have the Money You Need" helps you figure out how much money you need to set aside for all your expenses, whether they occur annually, monthly or weekly and allocate the money to go into various categories such as Food, Transportation, Clothing and Entertainment. Once you get started, finding ways to save becomes a positive addiction.

This 10-page e-book is downloadable straight to your computer, iPod and more. Order now from lulu.com for only $3.50.