Now that the new year has arrived, many people want to get their finances back in shape. Many of us go overboard when it comes to holiday spending. While a once a year splurge is fine, continuing that level of spending all year long will lead to problems. Here are some ways to get spending back in control in 2018.
Write Down Each Expense
You may thank you know exactly what you’re spending money on each month but chances are you don’t. Most of us have many small expenses we don’t keep track of. We buy a coffee on the way to work, an impulse-buy candy bar in the checkout line, a little toy to keep our child occupied while we run errands. These expenses add up quickly if you aren’t careful. List all your expenses in a small notepad, or download a digital expense tracking form from your bank.
Evaluate and Prioritize
You are the only person who can set and evaluate your priorities in terms of spending. Your choices will depend on your age, whether or not you have children, where you live, and how much money you make. Regardless, it’s important to look at your expenses once you’ve tracked them for a week or two (see previous suggestion), and indentify where your money is going.
Take a careful look at the extras you spend on. Can you cut out the takeout latte and make one at home? Are you actually reading the magazines you subscribe to? Could you be turning off more lights to cut the power bill? Is that monthly makeup box really providing items you’re going to use? Eliminate whatever expenses you can and put that money in savings.
We all deserve to reward ourselves once in awhile, but it’s important to do so intentionally. Make sure you treat yourself only after you’ve evaluated your expenses. Set a certain amount of money aside each week for a small splurge. Depending on your budget, the treat may be a weekend away, a new pair of shoes, a mani/pedi, or a new bottle of bubble bath.
Invest in the Future
Make sure to include saving in your monthly budget plan. You may want to save for retirement, your children’s college education, a Christmas club account, a special vacation, or a kitchen remodel. Whatever you decide, make sure to put money in the bank for the future.
Do you have other money-saving tips?