FRUGAL TIP: track your money

My favorite frugal tip is this: Keep track of your money before you spend it. I hesitate to use the word “budget” because it’s one of those words that makes people shut down, like “diet” or “colonoscopy.” In the popular imagination, “budget” connotes deprivation, sacrifice, pain.

In fact, a budget is just a tool to make your money go where it will do the most good. That can mean rent, mortgage and retirement – but it might also mean “nice vacation paid for in cash.” You’re not hoarding every dime in case something awful happens, but rather directing your money so that something good will happen.

Some people call it a “spending plan” or a “spending intention statement.” Call it whatever you like. Just make the darned thing. I recommend Mint.com because I’ve heard so many positive reviews from users. (Color me old-school: I don’t use any apps or budgeting tools myself.)

Donna Freedman writes the Frugal Cool blog for MSN Money and is a staff writer at Get Rich Slowly. Her website is DonnaFreedman.com.