Does your money have a sneaky habit of disappearing before you’re able to put any of it away in savings?
If you want to start consistently saving larger chunks of your income instead of putting away whatever happens to be left after all of your bill paying and spending for the month, you can probably benefit from this one simple habit.
It’s one of the most effective techniques there is for saving more money, and it’s called paying yourself first.
In another article, we talked about the benefits of tracking your spending: basically that it will put your spending habits in plain sight so that you become accountable and more motivated to make a change.
It will also give you the starting point for building your budget. Think about it: if you don’t know how much you’re spending now, how can you plan for the future? If your budget numbers are just guesses, what do you think the chances are of you actually living by them?
Hopefully you’ve accepted that you need some way to keep track of your spending. And maybe this isn’t something you have to do forever. Once you get your budget built and you’re sticking to it every month, you can probably relax a little. After all, the goal is to cut your spending – if you can do it without tracking it, who am I to force extra work on you?
And I do understand that it is extra work. It can be a little bit annoying at first, and it’s pretty easy to skip a week, then quit because it feels like too much of a chore to try to catch up.
In this article, we’ll talk about a few different methods you can use to track your spending, and which ones we think work the best
If you want to cut down your spending and build a budget you can stick to, it helps to understand the different categories your expenses can fall in to.
In case you didn’t get the hint from the title of this article, they’re called fixed expenses and variable expenses.
The difference between the two is fairly self explanatory, but we’ll go through the basics here and explain why it should matter to you (read – how you can use this knowledge to fatten your wallet).
If you’re reading this, I’m going to take a wild guess and say that you understand the value of having money.
Maybe you even want to maximize that value – i.e. have more money. Then you can travel more, build a golf course in your backyard, buy a pet jaguar, or check off whatever’s next on your bucket list.
Well there’s two ways to make this happen:
- Make more of it (Higher Income) – There’s just a few sites out there dedicated to this topic.
- Spend less of it (lower expenses) – or at least improve your spending habits – spend less on things that don’t really matter so that you have more to spend on what does matter.
This article will share what I’ve found to be the number one habit you can have to make you better at #2 – Track your spending.