Perhaps you've heard of Sen. Tom Coburn's "Wastebook," but if not, it's a pretty simple concept. Each year, the Oklahoma senator puts out a roundup of what he deems to be egregious government spending in the previous year, and Coburn's 2014 edition includes all sorts of taxpayer-funded projects, from an obscure educational cartoon to an event still making headlines: the rollout of Healthcare.gov. In all, he compiled 100 examples of such spending, totaling $30 billion.
To the American people, Coburn's Wastebook can be infuriating, entertaining or a combination of the two, but overall, it's informative. Whether or not you agree with the expenditures, it's important to know where the money's going. Of course, Coburn has an agenda, and his Wastebook is full of things he considers "low-priority spending," but conceptually, it's a good exercise.
That got us thinking: What would a personal wastebook look like? You (hopefully) won't discover $30 billion of waste in your own budget, but you could find some pretty big expenses that you can do without. Here's how to make your own wastebook and plug the leaks in your budget.
1. Collect the Evidence
Gather the last month's worth of bank statements, credit card statements, check registers, envelopes of receipts — wherever your transactions are documented. If you don't have these things now, make a goal of keeping your receipts for the next month, then you can do the wastebook.
2. Assess the Damage
Make a list of all your unnecessary purchases using your own definition of "unnecessary." Perhaps it's the occasional coffee run, a pair of shoes you didn't need, or going to a movie. The point is to highlight your flexible spending, but that doesn't mean you have to cut everything on the list. I'll get to that in a second.
3. Identify the Worst Offenders
Categorize your purchases. You can go as broad as "eating out" or as specific as "buying a candy bar at the gas station," but group these transactions in some way. Make a total of everything in that category, and start reviewing what you've calculated.
Choose three things you think are most wasteful — that might be the three categories where you spent most, or it could be the three expenses you think are most frivolous. It's up to you. Those three things make up your wastebook, and you can set your goals from there, like cutting your waste in half or eliminating your No. 1 most wasteful purchases.
Keep in mind that "waste" can also be in the form of debt. Buying something on credit and then letting interest accrue on that purchase month after month can be a huge drain on your finances. You could be throwing thousands of dollars away over the course of your lifetime on higher interest rates due to bad credit as well. (You can check your credit scores for free on Credit.com to see whether you could be saving money by raising your score.)
Other Ideas
You could do this on a regular basis as a way to improve your budgeting process, but make sure you don't overwhelm yourself with the task. Sure, it would be informative to make an annual wastebook of your 100 most frivolous expenses, but think about how much time that would take. Honestly, that sounds much more depressing than it does productive, so sticking to small goals may be the way to go here.
If you have shared finances, try having each party create a wastebook, and compare your findings. Much like other senators don't share Coburn's opinion of "egregious spending," your partner may see essential expenses in your wastebook, so try to approach the exercise with an open mind, because it could really help you save money. Look at it this way: You'll probably be more productive with this exercise than Congress, though that's not exactly something to brag about.
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