Track Your Spending Wisely and Save Money
Consumers can quickly run into financial trouble if they don’t track their spending. When you overspend, monies that should be set aside for savings are squandered, making it difficult if not impossible for you to reach your financial goals. Keeping track of your finances can help you balance your checkbook, reduce your debt and can help improve your credit score. Please read on for some sensible tips on how to spend wisely and save more money.
1. Don’t throw away receipts — Hold onto your receipts until you can record this information elsewhere. Checking account receipts can be tossed once you update your checkbook. Credit card receipts should be kept until your next statement arrives and is reconciled.
2. Track daily spending — It is often the little things that wear away a budget. For 30 days, track your daily spending habits, jotting down what you spend on coffee, a trip to the drive through, the lunch you pick up on the run and other incidental expenses. After 30 days review what you’ve spent — make a plan to eliminate unnecessary purchases and to allow for your other expenses in your budget.
3. Update your financial records daily — One small mistake or omitted entry can cause you to overdraw your checking account quickly. Check your financial statements daily online to avoid overcharge fees and a hit to your credit score.
4. Spend money, avoid credit — One sure way to overspend is to buy something on credit. With credit, you put off the “pain” until the bill is due. With cash you incur “pain” right away, making you rethink your purchases or at least keep you within budget.
5. Save for a rainy day — Whether you save 5, 10 or 15 percent of your take home pay, the monies you set aside should be placed in rainy day accounts. Those accounts can cover home repairs, car maintenance, an upcoming vacation, a Christmas fund or some other event or goal.
6. Stick to a budget — You may have avoided establishing a budget so far, but the good plan is for you to set one up and stick with it. A budget helps you monitor your income and expenses, and allows you to save money and control spending. Use a planner or related software to establish your budget; follow it carefully to ensure healthy savings.
Food for Thought
If you have difficulty controlling your spending, then consider the services of a financial consultant to help you out. A professional can help you establish a budget and keep you accountable as you reach for your goals.