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Money Management - Head Matters

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9. Step 4: Save and Invest


Now, look at the amended expenses for these categories:

If Henry Makes the Following Changes His Monthly Savings Would Be Present Expense New Expense Amount
Drive 200 less miles per month (car gets 20 mpg, gas at $2.50 per gallon) $25 $250 $225
Eat out only once per week at $20 $120 $200 $80
Get parents to keep dog half the time while at work $25 $50 $25
Change to a $50 cable/internet plan $40 $90 $50
Sign on to Public Service plan offering 10% rate decrease for those who cut usage during peak times $8 $800 $72
Change to a $40 per month cellphone plan and cut back on usage to stay within limits $50 $90 $40
Get a roommate and together rent a two-bedroom apartment for $800 per month ($400 each) $200 $600 $400
Buy $50 fewer prepared foods and soft drinks as groceries $50 $250 $200


When Henry plugs these new figures into his expense sheet, he notices something rather remarkable on the bottom (balance) line:

Henry's total monthly income: $2,165
Henry's total monthly expenses: $2,101
Balance: $64

He’s no longer in the hole. The only major change he made was to get a roommate. With the financial help of a roommate, he also achieved a fourth financial goal—he moved into a better apartment.

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Money Management

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