Have you ever looked at your empty ATM account and thought, ‘Where did the money go?’ It’s frustrating to work so hard, and then realize that your salary didn’t go to something you really wanted, but was frittered away on small, unnoticed expenses.
These tips will help you keep track of your money, so you spend on what really matters to you, and avoid unnecessary debt. You’ll also feel like you have more control over your finances—no surprises, and no regrets, about where your money went.
1. Set up your ‘accounting corner.’
Basically this is one part of the house where you keep all your financial records and all you need to do any money errands.
For the records, all you need is a couple of file folders and a box. File bills, receipts, canceled checks, bank statements, insurance documents, etcetera. In a nearby drawer, keep your checkbook, a calculator, passbooks, blank bank deposit and withdrawal forms, and any other things you may need in the course of paying a bill.
By organizing an ‘accounting corner’ you minimize wasting time looking for lost documents, and also avoid any late fees for missed payments. You have everything in one place, so it’s easy to check on your spending or review your obligations.
2. Avoid unplanned ATM withdrawals.
One of the worst ‘money habits’ to have is to withdraw small amounts from the ATM. Unless you’re really diligent at writing down even small expenses—in which case, you really don’t need this article—chances are you have no idea where you spent the $100 you withdrew last week. But you’ve run out of cash, so you withdraw again, and the same thing happens.
It’s more efficient to set your total household budget, withdraw that amount from your ATM, and then divide your money into envelopes: ‘bills,’ ‘supermarket,’ ‘transportation.’ For security, store the money in a locked cash box or drawer.
3. Do online banking.
This lets you pay bills through the Internet. This is really convenient (no more long lines!) plus you don’t make the common mistake of withdrawing more than you need ‘just in case’ and then spending the extra on…what was that again?
4. Use credit cards the smart way.
Credit cards automatically track your expenses—at the end of each month, you’ll see exactly what you bought, how much you paid, and even which store you went to. So in one way using credit cards can actually help you stick to your budget, if and only if control your charges and pay in full by the end of the month.
5. Set allowances.
Instead of giving money to kids whenever they ask for it, give a monthly allowance . At least you are able to budget that amount, and they learn to budget too. You should also set your own personal allowance—how much will you allot for eating out, going to the movies, buying books.
6. Lead yourself not into temptation.
Where do you usually tend to overspend? Everyone has a weakness. Maybe you go nuts when you’re in a shoe store. Others tend to spend too much on fancy dinners, while ‘bargain hunters’ often end up ruining their budget because they can’t say no to the big discounts in warehouse clubs.
Once you know your biggest budget-buster, then you can avoid it—or at least, plan and prepare. For example, if you’re a shoe-holic and you’re looking for heels, set your ceiling price and bring cash. (Don’t use a credit card.)
7. Give yourself a financial goal.
It’s easier to save money when you know what you’re saving for. What’s something you really wanted but think you can’t afford? Set a deadline—’I’ll get this by this month, this year) and promise yourself you’ll save a certain amount each month. That way saving doesn’t feel like you’re depriving yourself, it’s actually a step towards getting what you really want.
Great tips, Susan! Very practical and concrete.