Year One: Where Does the Money Go?

Tracking our expenses for a week—every latte, cab ride, iTunes download—was easy. Rationalizing what we spent? That was hard!

When I buy a dress or my husband, Rob, buys a gadget, we tell each other and are aware of the costs. But not so much when it comes to the "little" things: dry cleaning, drinks, groceries. Since we're trying to save for a home, we decided to keep his-'n'-her spending diaries for a week to see where our money was going. Going turned out to be the operative word.

THE VERDICT | Wow, almost $1,300 out the window in one week! After a panic attack, I call Farnoosh Torabi, a frequent Today personal-finance contributor and the author of Psych Yourself Rich, for advice. She cuts to the chase: "Spending five hundred dollars a week on food is a no-no." But we live in pricey New York City, I explain. And we love to eat! "Remember that goal of owning a home?" counters Torabi. "Instead of making daily food runs, map out a weekly meal plan and buy groceries in bulk." She suggests that we set a budget of $250 a week, including dinners out. That would save us $13,000 a year. Torabi says that spending $81 on cabs isn't egregious: "That's what a car owner would spend on gas." Still, she suggests shaving $20 off by using a little thing called the subway. Yearly savings: $1,040.

THE GOOD NEWS | "You guys cook at home a couple of nights; many people don't," the expert says. Also, Rob and I only charge things over $60, which Torabi likes a lot. "Paying with cash forces you to evaluate the necessity of smaller purchases," she stresses. The ultimate takeaway from our talk is not to attack each other (or ourselves) for every expense or eliminate splurges altogether. As a couple, we're figuring out where there's wiggle room. And here's our new mantra: Budget plus patience equal a one-bedroom co-op.

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