I was on my 6 month university job placement, and found myself with only three 3-hour shifts a week due to it being the winter season. I needed to save $8000 and wasn’t saving anything, because after rent came out, internet and groceries, I had nothing left, maybe $10 for gas. So I stumbled across The Simple Dollar, I then spent hours online reading about how to manage money.
I started my own monthly financial review which enabled me to see where every dollar went. I was able to cut hundreds off my grocery bill and cut out things I didn’t need, that I didn’t even realise I was spending my money on!
So here is my post, listing why you need to track your spending, how to do it, and what to do with the information. Enjoy!
1. Why it’s important
I went to the post shop to send something I had sold online. Instead of getting charged for one $5.50 postage bag, the cashier accidentally charged me for 6! LUCKILY I check my bank statements and I noticed the $66 dollar charge, so I called up and easily got it refunded. The lady on the phone was extremely apologetic, and I said “don’t worry we all make mistakes, at least I checked!” She replied “yes, most people just see a charge and think – wow, I really spent that much”.
2. How to set it up
Personally, I use a plain old excel sheet, and that works for me. Here is what it looks like:
So I add up the total for the month and add them into the $ row, then I calculate what % that is of the total amount of money I spent.
You can also use apps such as Money Lover, Monefy, AndroMoney, or Spending Tracker if that makes it easier. Trust me, taking an hour on a Sunday once a month to manage your money will help you out a LOT in the long run.
3. What to do with the information
You can create a budget, or set goals for yourself such as – don’t spend more than 10% on coffee and takeaways this month.
4. What items were a waste of money?
Did you really need that new dress you brought last week? Or those takeaways because you were too lazy to cook that night? Look at what you can cut back on to make extra savings.
5. Small expenses can add up
In my post Money Saving Tips I Learnt The Hard Way, I mentioned packing your own food for road trips. I noticed if I’m going for a long drive, I will often stop in and get a cheap burger from McDonalds because its quick and easy, however that $3.50 can add up very easily.
6. Compare the months
Try to increase your debt payments every month, and decrease your expenses such as groceries and petrol.
7. Decide what your priorities are
What is most important to you at this stage in your life? Focus on throwing your money towards that.
8. How can you increase your income?
Working extra hours, working a second job on the side, selling items online, or doing odd jobs for other people.
Or check out this AWESOME app – 60 Ways To Make Money.
9. Create goals
Create goals such as only spend 60% of your pay each month, or put 20% into debt payments each month, or spend no more than 10% on dining out each month.
After doing this you will start to challenge yourself, giving you more money left over at the end of each month so you can spend it where it matters to you.
I hope you enjoyed the information. If you have any questions, I will be happy to answer in the comments 🙂 Good Luck!