With the first month of the new year almost behind us, perhaps you have already noticed how effective you have been in sticking to your New Year’s resolutions. If you haven’t made any however, it is also just as likely that you have used this new year to start fresh within certain areas of your life, including being more aware of your own spending patterns.
Either way, financial fresh beginnings are always important regardless of what time of the year it is and as such, here are 4 tips to help you keep better track of your money this year.
Tip #1: Take Inventory of Your Finances
At this point, you will want to work towards devising a budget that will help you manage your spending with more effectiveness. However, at the beginning of this process it is necessary to first take inventory of where you stand financially-speaking.
You can start by calculating the amount of money you have coming in each month, as well as the amount of your monthly expenses. With regards to your expenses, these will include your fixed expenses, such as, your mortgage/rent payments, car payments, insurance premiums, as well as what amount you have allocated for items in the varied expense category, such as certain household necessities that can be adjusted or cut back on, such as food costs, cable, heating, internet, as so on.
In this latter category, you can then determine which items can be purchased at a reduced cost or can even be left out of your expenses altogether – then you can begin to adjust your budgeting terms according based on these revised values. With a better idea of what your new spending plan will look like, you can now officially get started with your plan to keep better track of your money.
Tip #2: Use a Budgeting App
Also a part of the budgeting process, you can enlist the help of budgeting software or an app to step up your game. The are many budgeting apps available, including one that can found at mint.com. You could also opt for an Apple app, easily downloaded straight to any one of your devices. Additionally, you can also sync these apps through iCloud and as a result will be able to view your budget from virtually anywhere – and on any mobile device.
Being able to check in and update your budget while on the go, can help to ensure you are more efficiently tracking your spending. So why not consider giving one of these apps a chance this year, after all it is likely that you will see a real improvement in your budgeting and spending abilities.
Tip#3: Start Saving More
Instead of spending this year, why not try to save a bit more money than you have during the previous calendar year. This is definitely a good method of keeping an eye on your money, as you will know that it is safe and sound in a savings account. If you don’t already have one, a tax-free savings account (TFSA) can be a great avenue for saving – providing a tax-shelter for your funds.
If you do already have a savings account set up – a TFSA or another type, you can then consider increasing the amount you save each month by even 25 extra dollars. In the end, you can accumulate even more savings each month/ each year and this will also mean that you are spending less on other items and services – some of which you may find you can definitely survive without.
Tip #4: Reduce Your Credit Usage
While it is quite common to have one or more credit cards, it can also be just as commonplace to rely too heavily on them when making purchases. Since it is way too easy to use credit to buy things, the reality is that a pattern of spending beyond your means can just as easily emerge. When using credit, we are also more likely to lose track of just how much we are spending – so instead of continuing on with this behaviour, perhaps consider paying more often with cash.
Switching to spending only when you have the available cash can help reduce overspending, and enable you to stick closer to your budget. Here you can delegate certain cash allowances for each additional expense category you will have (food, fuel, entertainment, etc.) – and once the cash is gone – it’s gone and you will not be able to go out and risk spending more. You will of course have to resist the urge to pull out the credit card and make additional purchases – unless it is absolutely necessary.
While this method of curtailing your spending may take some getting use to, it can help you to better visualize how much actual money you have to spend – and you can also learn to pace yourself when it comes to using this money over the course of the month.
When it comes right down to it, we should all be taking the time to know exactly where our money is at all times. The moment we lose sight of where each dollar has been spent – the higher risk we are of continuing down this path even further. Instead, by taking steps now to keep a closer watch on your money – 2016 can be the year your finances become more secure and manageable – and spending within your means can very much become an achievable goal.