Spending money is something that can’t be avoided. However, the way that you spend your money will determine your financial success. You will either be in debt or have money left over for savings. When you improve your spending habits, you will find that you can stretch your money much further.
Good spending habits will help to ensure that you don’t pay too much for anything that you buy, you don’t go over your budget, and you don’t make impulse purchases.
Making A Budget
The very first thing that you must do to improve your spending habits is to make a budget. This is going to allow you to see how much money you have coming in versus how much you have going out.
Start by writing down how much money you have coming in each month. Then create a column for your bills and one for other costs such as entertainment, groceries, gas, and so on. You will then add up the amount of money that you have going out each month. How much is left? Is there any left?
If you do have money left, it is time for you to decide how much of it is going to go into savings each month. A good starting point is 10% of your income goes into savings automatically each time you are paid. If there is nothing left, it is time to make some cuts.
Take out your bank statement and find out where your money is going. Write down how much you spend eating out in a month, shopping online, and how much goes toward subscriptions. Also, write down how much goes to each of your bills. Make sure that you write down anything that you spend money on and how much you have spent.
This is going to allow you to see where your money is going. You won’t have to try to remember anything.
Now let’s say that you are spending $2.00 per day on soda. That is $60.00 each month. What could you do with $60.00 extra a month? Go through everything that you spend money on in a month and determine if it is a need or a want. If it is a want, is it something you could get cheaper. For example, if you like to have a cup of coffee before work in the mornings, could you make it less expensive at home?
Changes You Can Make
The next thing that you must work on is replacing those bad habits with good ones. To do this, you are going to have to give yourself a reason to improve your spending habits. To stop wasting money is not going to be a good enough reason. Maybe your purpose is because you want to save money to buy a house, or you want a $10,000.00 emergency fund, or you want to be able to pay off all your debt. Whatever your reason for wanting to change your spending habits, it needs to mean something to you.
Whenever you do decide that you need to make a purchase, take some time, and do your research. You never want to make a purchase without checking all your options. You don’t want to end up spending more money than you had to. For example, if your washing machine were to break down, you would not want to run out and buy the first one you saw.
Instead, you would want to compare the price of getting yours fixed to buying a new one. If you did have to buy a new one, you would want to shop around and make sure you were getting the best deal possible. Information is going to help you to make better decisions.
Learning how to cook is going to help save you a lot of money. Change that going out to eat habit into a cooking at home habit. So many people don’t think that they can learn how to cook, but it is something anyone can learn to do. The truth is if you can read a recipe, you can cook. Cooking at home will save you a lot of money because you are not going out to eat all the time. You can still have the same delicious meals just at a lower price.
Start using coupons. Coupons are a great way to save money, and they are readily available to anyone who wants to use them. You have probably seen the shows on TV where people take couponing to the extreme. The good news is that you don’t have to do that unless you want to. When you think of coupons, think of them as cash because they work just like cash in the store. Use coupons on items that you purchase regularly and start saving the difference. Even if you use just $5.00 worth of coupons a week, that is $260.00 every year that you will be saving.
If you do want to go out to eat, do it with coupons. Lots of restaurants put out coupons every month. They put these coupons out because they want customers to use them. Use them. Never pay more for anything than you must for anything that you buy.
Have Fun
Make sure that when you create your budget that you do allow for fun. Always include fun or entertainment in your budget. Improving your money habits does not mean that you can’t go out and have fun. It is still possible to enjoy life and improve your money habits at the same time.
Give yourself permission to enjoy some of your money. You can do this by giving yourself an “allowance” or just budgeting a specific amount of money to spend on anything you want each month. This will help to ensure that you do not go crazy and spend more money than you can afford.
If you ever feel tempted to bust your budget, go back, and remind yourself of that reason that you want to improve your spending habits. Is it a new house? A new car? Paying off your debt? What is it to you?
