How to Control Your Spending
The first step to controlling your spending is getting your financial house in order so that you can determine how much you spend every month, learn what you buy and find areas where you can trim your expenses.
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Instructions
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If you find yourself asking, "Where did my money go?" every month, then you should set up a budget. A budget can be complex with graphs and charts or it can be as simple as writing down everything you buy so that you can track your expenses. That $2 cup of coffee, for example, is an expense and needs to be documented.
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Monitor your expenses. Buy a small notebook and bring it with you wherever you go. Write down everything you buy and at the end of the day, enter your purchases into a spreadsheet, such as Microsoft Excel. (If you don't have Excel, open a free Google account and use the Google Docs spreadsheet program.) After about one month of doing this, see where you are spending your money. If you spend $60 a month ($720 a year) on coffee you might want to think about buying coffee at the grocery store and making it yourself. The bottom line is you need to make sure you know where you are spending money.
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If you need to use your credit card, you can't afford the purchase. Open a high-interest savings account to save for for medium and large purchases. Add a percentage of your income to this account every month. When you have enough money saved, go ahead and buy the item you want. For example, if you are looking to purchase a TV and a couch, save for both. Put the money into your savings account and use it when you have enough money saved. You can also charge the purchase and pay off your credit card right away. Having the money saved will let you pay off the purchase right away and you will avoid high finance charges.
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Save for retirement. Use your company's 401k plan. If your company matches your contribution, then contribute enough to qualify for the entire company match -- it's like free money. You also may be able to set up an individual retirement account. Have all of your retirement savings automatically deducted from your paycheck. This ensures that you'll save.
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Live frugally. If you live below your means, you will not be financially strapped. By spending less than you earn, you'll build savings and be prepared for those unexpected expenses that crop up from time to time.
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References
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Comments
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jaredsgirl
Mar 31, 2009
Great advice on how to control spending. I need to stick by this. Thanks for sharing! 5* -
Mitestarossa
Mar 30, 2009
Controlling your spending is a tough but necessary in this economy.
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Ruby Bayan
Jan 03, 2008
Very good tips and reminders, and all well-presented. I'm inspired! :)
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Ron Auerbach
Dec 30, 2007
That's a good idea. I suggest putting the category of spending on each receipt. For example, one could be marked food, while another could be labeled entertainment. This will make grouping into categories and reporting easier.
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CCrock
Dec 30, 2007
All very good tips! A good way to really grasp your spending habits is it save every receipt and then add up what you spent on different things at the end of the month, like groceries, dining out, shopping...it will help you to adjust and keep track of your budget.
