Do you ever get to month end and find there’s more month than money to fund it? Sometimes money really does feel like water slipping through your fingers. Just where does it all go? If you’re worried about whether or not you’re in control of your spending, test yourself with the five questions below.
Do You Have More Money Going Out Than In?
If you’re finding yourself a little short of funds on a regular basis, then it’s time to take a look at your spending habits. Adjusting your expenses is a faster and easier way to improve your financial situation than adding to your income – and it’s the side of the equation over which you have the most control.
Do You Know Where All Your Money Goes?
When you’re across your outgoings, your spending is usually in good shape. On the other hand, if you really do not know where all your money goes each month, it’s time to find out. Go over your bank statements to get an idea of your regular expenses; make a list of essential items like power, water, rent, food, etc. Then list out the non-essential items. This will give you an idea of where you may be able to pull back on some spending. You may even find some direct debits you haven’t canceled; gym memberships are often set up for automated payment and many keep paying long after their enthusiasm for daily workouts has waned. Keep a spending diary and track all your outgoings for at least a month. You may be surprised at how quickly a takeaway coffee a day adds up. Make sure you note down any cash purchases as well.
Do You Buy Things On Impulse?
It’s probably happened to everyone; you get home and unpack your bags only to realize you’ve bought something you don’t really need, already have, may not want, liked it better in the shop, etc. Everyone has impulsive moments but if you find it’s becoming a regular occurrence, take action. Think carefully before you purchase any non-essential item. Walk out (or log out) of the shop and don’t go back for a week. Now, do you still want whatever it was? Consider leaving your cards at home and only taking a pre-determined amount of cash with you when you go shopping. This way, there’s no way you can overspend, and you’re likely to think before you spend.
Do You Have A Budget?
The idea of a disciplined budget sounds scary to many but it really isn’t possible to be on top of your finances without one. Take some time to create your own personal budget. Your spending diary and bank statements will be useful for this. Remember to go through your (eeek) credit card statements as well and take a close look at anything you buy regularly. The more comprehensive your budget is, the more in control of your spending you will be.
Now – the BIG question: For those who already have a budget …
Do You Stick To It?
Sticking to a budget ensures your spending is under control. If you’re having trouble keeping to your budget it may be time to review it. Does it still suit your needs? Take another look at your personal finances; you may find you need a new budget plan entirely, or just a few tweaks to your existing one. Spending some time every few weeks to make sure your plan still works for you is time well spent.
Controlling your spending is a sensible part of good money management. If you find yourself out of funds each month doesn’t delay. Take control of your expenses. Examining your spending habits is an excellent way to get a handle on your finances and it starts with getting the full picture of incomings and outgoings.
How’d you do on the five questions? Let us know in the Comments box below.