Introduction:I firmly believe the reason so many working people are "broke" in this world is because they do not keep track of their spending. It also doesn't help that people don't think the little purchases (1$ here, 5$ there) really matter. These 5 tips should help those people learn where they are spending money, and find ways to cut expenses.
This probably sounds like the opposite of good advice, but hear me out. I am not talking about charging things you cannot afford. Instead I'm talking about using a Credit Card for your every day purchases so you can TRACK every dime you spend. Credit Card companies have a lot of fancy online tools now that allow you to analyze your bills, sort by type of purchase, etc. You cannot do that as easily if you are spending cash. I charge almost everything, but I consider that money spent the second I charge it and do not charge anything that I cannot pay off in a month. If you don't think you have the self control for that, then maybe this tip isn't for you. But if you can manage to use it just as you would cash, you may start seeing some patterns. How much did you spend on coffee this month? You might be amazed to find that out!
My husband and I use an Online Spreadsheet to track our Checking account balance and our monthly bills. This is shared between us through Google Docs for easy access anywhere. When you have multiple people having access to the same accounts, you might not realize always what the other person is spending. Using a spreadsheet like this helps ensure our bills get paid on time, but also let's us see how much we need to have set aside for bills every month.
I don't use a fancy phone, but I'm betting there is an app where you can enter in expenses. Since your phone is with you all the time, it would be easy to type in each time you spend money. If there isn't an App (or you have a cheap phone like me), you can always just use your phones notepad feature to keep track from week to week.
If it's not convenient for you to get to the Internet to track expenses, then many of the above options won't work for you. In this case, I would use a good old fashioned notebook. Get a small one for your purse or to keep in your car. Write down every penny you spend - I mean it, every penny! Weekly or monthly, depending on how often you spend, evaluate your notebook expenses to see where that money is going. Think about your daily habits. For example if you MUST HAVE a candy bar every day, you are only .75 cents, but if you add that up it's 22$ a month!
If tracking every penny you spend seems overwhelming to you, then start with one thing at a time. You remember that .75 cent candy bar you MUST HAVE every day? Why not track that for a month. Set yourself a goal and see if you can cut back. Spending can be an addiction, buying that candy bar can be an addiction too. You might find that with some self control you can get yourself down to 3 candy bars a week, then maybe just 1 a week. You don't have to cut goodies like this out completely. The point of this exercise is to learn some self control and see that perhaps you really don't NEED a candy bar every day. Maybe you were just addicted to it. Once you've conquered that, you can move on to another item. Keep track of your accomplishments and you'll soon see that you are spending a whole lot less on a regular basis.
You may not be tracking your spending because you simply don't want to know how much money you waste each week or month. It may be scary at first to find you you spent so much on coffee or candy or movies or dinners out. Get over that fear! If you take the effort to track, you'll eventually learn to control your spending a little better and save in the end. Good luck!
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