At one point or another, it happens to everyone. You’ve paid all of your bills, spent a little cash here and there, and, by the end of the month, you’re in a deep financial rut and you have absolutely no clue how it happened!
Your twice-daily premium coffee runs, pile of new sweaters, and other small purchases can add up significantly by the end of the month. However, by exercising attention to detail, you can fight the battle of the slimming wallet and win!
Try these tips to track your spending habits and buy yourself a ticket on the train of financial freedom:
1. Define the variables. A mortgage payment, your internet bill, and the gas for your car often cost the same each month. However, your grocery bill and others may vary. Track your spending month-by-month to ensure that you’re comfortable with the amount you’re spending.
* Plan your meals for the week ahead of time, make a grocery list, and stick to it. By holding yourself accountable for your purchases, you minimize impulse purchases at the store and keep your money where it belongs.
* Those on-demand movie purchases can add up. If your family is big on purchasing films from your cable provider, allot a budget and stick to it. Three movies per month often come to a total of $15. But three mindless movie purchases per week can tally up to $60 per month, or $720 per year!
2. Make use of your register. With the luxury of online payments for your bills, you’ll often forget to track how much money you sent to which company or how many items you’ve purchased online. Make it a point to track your online payments and purchases by making use of your bank’s register.
* Keep your register at your computer table at all times. To get an accurate picture of your financial situation, it’s important to log every dollar you spend.
3. Avoid online shopping. If your purchases on a specific online retailer are becoming too frequent for comfort, refrain from using the website. It can be difficult to practice restraint on your own, so use tools that help you minimize and track your online purchases.
* LeechBlock is a free add-on for the Firefox web browser. It allows you to block certain websites for a predefined amount of time. For example, you may choose to block Amazon.com on every day of the week but Wednesday, and only allot 10-minutes to peruse their inventory of items.
* LeechBlock is also a great tool to stop online gambling, visits to X-rated websites or to control the amount of time your children spend on Facebook playing addictive games. In turn, this puts money back into your pocket.
4. Cash only. If you’re going out of the house, leave your credit cards at home. Bring only cash. For example, if you’re planning on just going out to lunch with a friend, only bring $30 cash to avoid impulse purchases that you may later forget to track.
* If you’re concerned about having enough in case of an emergency, keep $100 in your glove compartment. If you use your emergency cash for shoes or a new baseball cap, force yourself to pay the price of your actions by deducting the amount you spent from your petty cash allowance.
Even if you have a high-paying job, you can find yourself in a financial hole if you’re unable to exercise caution with your money. For this reason, it’s vital to your financial health that you know where every penny of your money is going. Spend sparingly and track every penny to begin experiencing the financial clarity and freedom you crave.