Wednesday, August 26, 2009

Saving Money: Review Expenses First

Saving Money: Review Expenses First
Ever wonder why your savings target cannot be met every month? I know you are trying hard but maybe you aren't aware of your spending leaks.

You have to record down your expenses conscientiously for a few months, even if it is just a few pennies.

I found out that I have been buying snacks, magazines, newspapers, iced coffee and mineral water at convenience stores and petrol kiosks which amounted to about $200 in my first month of tracking expenses.

Add to that about $200 a month on clothes, $300 on fuel expenses, and then hundreds of dollars on food, electronic gadgets, digital downloads, as well as other miscellaneous items, you can see that my income is spent mindlessly and I don't have much left to pay my bills, not to mention saving money.

You don't feel the pinch until you actually record the expenses down and review it with an objective mind. It was a horrible feeling and I wanted to change my frivolous lifestyle.

Take Action

Once I set my mind on changing, I found that a lot of expenses can be whittled out and channeled into my savings account.

First, I try not to shop online frequently which reduce my spending by about 40-50%. Online shopping and a credit card is a potent combination because everything is so convenient. When you see attractive gadgets, it is difficult to resist impulse buying. Before you know it, you have checked out the products with a few clicks of the mouse.

I also decided to avoid buying unnecessary stuff whenever I stepped into stores. If I do shop, I have a list of what I need and the amounts which I am willing to spend.

There are times when I exceed this self-imposed budget but it is just to give myself or my family occasional treats which brings me to the next point.

Reward Yourself Occasionally

Every household which practices budgeting must allow themselves some incentives to go the distance. You pick up some desirable but unnecessary items like Starbucks coffee, chocolate, toys or a new outfit.

The main thing is to reward your efforts for sticking to the budget every month. Such rewards keep us motivated and happy, so be sure to include them in your budget.

If you want to be serious about saving money, get started on tracking your expenses. It may sound like hard work but the payoff will come in the long run.


Ace Cash Express said...

Very nice tips! Actually a lot of people know this but most are not consistent with their efforts to track down their expenses. It's true that credit cards and the advent of online stores are very enticing, for just several mouse clicks and all you have to do is to wait for the shipment to arrive.

I think aside from what you suggested, people should also learn to discipline themselves.

And of course, rewarding yourself for all the hardwork is good. It helps you to feel that there are improvements in your finances since you can afford to give yourself some rewards.