This is a time when knowing exactly where your hard earned money is going. Tracking what you spend, for most people, will be an eye opening experience. Many will see that they are simply way over spending for everyday items.
When we realize exactly where our money goes, how, when and where it is spent we can start to formulate a plan to make some cuts, or rethink the way we spend. When a conscious effort is made to track expenses you will be amazed at the money which is suddenly able to be saved.
Change of Habit
Changing the way we spend money will be a valuable tool when starting to save money. Many times we often finish a long day at work, are tired or even worse hungry and we make our nightly trip to the market to decide what to have for dinner. Shopping while hungry is a big no-no when trying to shop economically or even effectively.
If you decide to go to the supermarket when hungry or are just plain undecided as to what to buy, you are asking to end up with a lengthy shopping receipt. Most often the items you just purchased had nothing to do with creating the nightly dinner you entered for.
Try planning your family meals for the week, or at least for a few days at a time. Preplanning can ensure you buy only what you need or will at least use sometime in the near future. Try buying items that can be used in a variety of different meals.
Avoid Spending to Simply Spend Money
Many find themselves heading to the mall or to the nearest retailer during their lunch break to check out the latest deals. In most cases heading to these destinations without a specific need will result in spending just for the sake of spending.
Tracking the money you spend when bored may show a large opportunity to save. When tracking your spending you may wish to include details such as why you bought the item(s) and did you need them. When we take the time to think and plan our spending we realize that often times the spending really isn’t called for.
National versus Store Brand
Try to cut your costs by switching to a store brand versus a national brand, this can add up to significant savings. Many find that taste and quality are equal to or even better than some national brand products.
The irony is many store brand products are made by national companies, just packaged in whichever store has purchased their brand as the alternate option. In most cases the product is very similar. Ingredients can vary, depending on the store brand. Do some research on your favorites and see if some are made for your local markets brand. What a great way to enjoy your favorite foods for less and save money. Create a list of the national brands that you simply must have over a generic version. Keep this list handy and check out different store brands, you might just find a better option down the road.
Money Tracking Software
There are many different types of money tracking software out there. Intuit, for one brings you several options under brands such as Quicken and QuickBooks, for example. These types of software allow you to set up a chart of accounts where you can assign the money you spend.
You may wish to have a food account or an entertainment account. Each time you spend you enter the charges into the electronic register and associate it to a category. You will want to be pretty specific when tracking your spending as to the types of categories you set up.
Having a generic category called “food” for example where you assign all food related expenses to it won’t truly give you an accurate account of where your money is going. You should break it down into categories like dining out, family meals, groceries, and household necessities.
Honesty is the Best Policy
You might wish to keep your money tracking activity to yourself to start. See exactly how much money you discover to be spent excessively and where immediate cuts can be made to help you save before you involve your spouse or family. Once you have trimmed the “fluff” spending, involve everyone in the tracking to really see if you all can make a joint effort to save.
Keeping an accurate and honest account of where, why and how you are spending you money may be the best way to see where changes can be made. Make it fun and try to really enjoy yourself. Just because you track what you are spending doesn’t mean you can’t spend, just do it wisely.
Tim Iandoli is a promising new freelance writer. He writes about personal finance, insurance, travel, food, wine and self-improvement. He's a master problem solver, restaurant critic, entrepreneur and all around fabulous guy.