Money. Most of us are sharply focused on this vital commodity right now. While it’s hard to quickly increase your income, it’s not so hard to quickly reduce your outgoings. Even small savings can mount up and help stretch the available budget.
It’s knowing where and how to put the elastic that can be the tricky bit.
Make Meal Plans
Have you ever been out food shopping, spent a fortune, then got home and wondered what you’ve got to eat? Sounds daft, but it can happen.
Planning the week’s meals before you leave the house can stop the meal guessing game and help control the food budget at the same time.
Meal planning steps include:
- Take stock of what’s already in the pantry/fridge. What meals or ingredients are already in there you can use?
- On your shopping list, jot down the days of the week and beside each list the mealtimes (breakfast, lunch, dinner) and write down what you’ll eat at each meal.
- Next, compile the actual shopping list, using the meals you’ve chosen as a guide for what to buy. Cross out anything already in the store cupboard as you don’t need to buy it again just yet.
Take your list and meal plan with you when you visit the shop, and don’t buy what’s not on the list – unless it’s something vital you’ve forgotten to include, of course. Here’s more on meal planning.
Create a Money Tracker
A personal money tracker is very easy to make and keep up to date. Based on accounting systems used throughout the business world, learning how to do this can even set you up to start a new career in accounting if you find it a rewarding exercise.
Grab a notebook or spreadsheet. This will become your ledger. Make the following columns and fill them in as directed:
- Date: The date of the transaction
- Item: What you bought, or where earned money came from (salary, wages, private sales etc.)
- Cost: How much came into your bank account or went out.
- Balance: This is a running total maintained by adding or subtracting the amounts in the ‘cost’ column. Start it off with an opening balance by looking at the current state of your bank account.
One important note about the balance column — include direct debits and standing orders. These disappear from your account on their own, so it’s easy to overlook them in your daily accounting.
Analyse Your Spending/Costs
After a while, you’ll start seeing patterns of spending emerge. From this, you can make informed decisions about where to cut costs if that’s what you need to do.
Examples could be motoring, or entertainment, days out, clothing… lots of regular expenses are habit based and there may be quite a few opportunities to spend less when you focus on them.
Managing income and expense like this is a better way of trimming your spending than quitting the things you love. Too much of that just makes you miserable.
Review Your Direct Debits
Direct debits can be both a blessing and a curse. Blessing because it means we don’t have to think too much about recurring expenses, but a curse because often they keep getting paid when we no longer need them. Reviewing and cancelling the ones you don’t need can save lots. Three prime suspects to look for are:
- Magazine subscriptions
- Food/diet/gift/mystery subscriptions that you don’t get full use out of.
- Product insurances for things you really don’t need insurance for, or even items you no longer have. It’s very easy to overlook these small monthly payments.
If you regularly buy magazines, check your local library since a surprising number of mainstream magazines can be ‘borrowed’ digitally and read for free on mobile devices.
Along with the money tracker, this simple reviewing exercise is also borrowed from business accounting, where they regularly look at financial reports to see what money is doing and how they can control or use it better.
It can be personally rewarding and financially profitable so if you enjoy it, consider learning more about accounting.
Make Your Own Spending Decisions
This final tip is largely about peer pressure, or the need we all feel to ‘keep up’. FOMO (fear of missing out) can be a real pressure to spend more than we need to.
- Do you really need every streaming service?
- Would the latest mobile phone handset and contracts really make your life better/easier?
- Do you absolutely have to have a new car every few years, or a new outfit every week or month?
There are many more examples of things we spend money on that are more about keeping up appearances than truly improving life.
As well as saving money, making stuff last a bit longer puts us on the noble side of the global climate effort. It helps us all do our bit.
Give one or two of these tips a try, especially the money tracker, and see if it helps you get more control over your finances. At the very least it will help you spend more mindfully and avoid a few impulse buys.
This is a collaboration post