If you’re anything like us, it seems like you bleed money from week to week. You leave home with $100, and before you know it, the money is gone and you don’t have hardly anything to show for it.
One thing that I’ve found helpful in living on a very small budget is tracking spending habits.
Ever so often, I remind myself to save all of my receipts for a couple weeks, then I’ll sit down with those receipts and look at our spending habits.
It helps to make notes on your receipts if they don’t clearly state what you bought in a way you’ll remember in a few weeks.
There are apps you can download that will tap into your debit card and itemize what you spend money on for you but since that information is so sensitive, I only recommend using them at your own discretion.
With that said, pen and paper may take a little longer, but it’s certainly safer and it’s the method I currently use myself.
Doing this helps you to understand where your money is going.
It also helps when you do this to make a few columns for things you already know you spend money on. Say, if you like to stop at Starbucks on your way to work sometimes, go ahead and make a column for that. Add up what you spent and what kind of expense it was.
Don’t forget purchases you might not have a receipt for, like that soda and bag of chips from the vending machine at work.
For example Paul and I have weak spots for energy drinks (I know, they’re full of chemicals, but it’s a weakness none the less). When I track our spending, I go ahead and make a column for those and write down how much we spent each time, then add them all up.
This allows me to see not just what I spent on energy drinks during that time, but what I spent on those random “quick stops” we make and sometimes forget about.
The last time I went through this process, I was surprised at just how much we had spent on things like energy drinks, snacks and eating out, so I was able to identify some spending habits that were being completely overlooked.
In doing this, I was able to see that we were spending way too much on these purchases and I was able to get a handle on it by making myself more aware of the fact that there was a problem.
Now I’m not saying we never spend money on them at all anymore, but now we buy sodas occasionally instead, which are cheaper anyway. I not only saw this, but it also helped me see where I stop that our drinks are cheaper. $5 combos for one person became $1 menu purchases when we do eat fast food (which isn’t often anymore). We also started using coupons and taking advantage of in-store specials when we could.
Tracking your spending can help you see exactly where your money goes and help you curb spending in areas where you might not even be aware you’re spending so much.
If you see that you’re consistently spending money on a non-necessary item(s) you might want to consider adding it to your budget and giving yourself an allowance for those types of spending. This can help take some of the sting out of it and it certainly helps us.
Tracking you’re spending sounds like such a small step, but it can make a huge difference in how much money is left in your pocket when you get home.