Get Your Spending Under Control!
Do you ever feel like all you do is spend money? Three dollars here, fifteen there, etc. I feel like this frequently and usually when I am hit with a lot of expenses I start feeling as if my spending is out of control. Have you ever thought "I just can't stop spending money" before? Many people feel this way every day. In some regards you really can't stop spending money. You still have to make your mortgage or rent payment each month and put gas in your car to get to work. Needs must be met. But I am talking about the little (or possibly big!) bits of money that get frittered away every week that many people don't even know where it went to.
How can you get your spending under control? I think the first step is taking a break from spending. A couple of times a year we have an official, month-long No Spend Month. You don't have to be so official, and we frequently aren't either. When I feel that our spending is out of control, we take a break. My husband and I decide together to try really hard not to spend any money. This helps us get the control back. If you feel like you are always forking over cash, or pulling out the credit card for one thing after another I challenge you to see how long you can go without spending money.
The second step to get your spending under control is to think about exactly what you spend your money on and think about NOT spending money for awhile. It is very easy to go through life blindly paying for whatever pops up that day. Think about your day though. You might pay train fare to get to work, stopping for coffee on the way. At work you might get a snack from the vending machine, go out to eat for lunch, buy a magazine to read on the way home, etc. You also have all of your regular bills to pay each month and if you have a family, there are lots of expenses related to that too. It adds up to lots of spending. When was the last time that you consciously tried to hang on to your money? Some people have never thought about this aspect of personal finance.
Third, make a plan. Yes, it always comes back to budgeting at some point. Budgets are not all evil; in fact they really can help you. The first year my kids were in school, I felt like money was slipping through my fingers faster than I could blink. Everywhere I turned, someone wanted money - for books, for fees, for supplies, for sports, for pictures, yearbooks, field trips, etc. it was very overwhelming! The next year, I made a plan. I set aside $400 to cover all these little fees and after writing checks for the larger amounts I put the rest of the cash in an envelope and had it ready to cover the needed items. Because I had planned for these expenses, they weren't overwhelming or out of control.
Fourth, go to a cash only system for the smaller day to day expenses. I find that I can't accurately keep up with how much I am spending in each category when I use my debit or credit card. You don't need to keep elaborate records if you have budgeted a set amount of cash for a category. For instance, lunches at work. Let's say you have given yourself $40 to buy lunch at work each week. Rather than having to keep track of receipts, remember to write spending down, or total things up with a calculator, you just put $40 in an envelope at the beginning of each week. When you go out to lunch you pull the cash from that envelope. When it is empty your budgeted amount is gone and you will pack a lunch. If you have leftover money one week, it can sit there until the next week to cover when you might go over. Using cash only is a great way to reign in your spending. It forces you to think more about how you want to spend your money and to make choices that align with your priorities.
It is very easy for spending to get out of control, especially with the easy access to credit cards. It isn't always the little things that cause spending to be out of control thought, so watch the big purchases too. I have found that using the above four steps, has kept my spending in control, has prevented me from feeling overwhelmed and has help me keep more money in my bank account, rather than flowing out of it. If you need to get a better handle on your spending, use these tips to help you.