Even a small amount of spending will add up gradually if it’s part of a regular spending habit. That’s why tracking how much you spend down to the last cent is essential if you are serious about getting and keeping your finances on track.
Make money visible again
You can sometimes lose track of how much you’re spending. So, if you have difficulty budgeting, are spending more than you should or find you are always low on funds, you may consider the benefits of paying closer attention to your spending for a while.
Tracking your spending can help you to pause and make a conscious decision each time you think about buying something which may help control your spending.
Set short-term financial goals
Goal-setting is a powerful way of motivating you to manage your money. For example, your short-term goal might be to save €/£1,000 towards a holiday over 6 months. This means you’ll need to save about €/£5.50 a day. Setting short-term, medium-term and long-term goals will help you to put your money where your hopes are and give you the encouragement to cut spending to achieve your goal.
Learn How to Budget Money
Not having a personal budget or a money plan is a key reason why people struggle to stop spending money. A budget is made up of two parts - your income and the amount of money you spend on a weekly, monthly or yearly basis.
So, review your payslips, current account statements, credit card statements and receipts to understand exactly where your money goes. You can use a simple budgeting sheet to guide you. Track your money for 3 months to get a very good snapshot of your spending habits.