Tracking your expenses and setting limits for your spending is a routine that will give you invaluable insight into your finances. Once you form this financial habit you will notice a big difference in the way you handle money.
What are some lessons you can learn from budgeting your money? You can figure out what money categories you spend the most on, how to lower your bills, and see how small moves can have a huge impact.
I recently started keeping track of my weekly incomes and expenses and it taught me a great deal about my family. Let’s break down my personal money lessons here:
Figure Out What Money Categories Are Your Weak Spots
After a few weeks of analysis, it was CLEAR that food was our downfall. Eating out or ordering food always seems like a good idea during the experience, but once the bill comes you realize that retirement planning should have come first.
We would go out a few times a week and spend around $100-$150 a time as a family of five. Can you imagine the amount of money that left our home and our bank accounts?
If you order food in or dine out at restaurants a few times a week, chances are that you are overspending in your food category as well. After tracking this data, we realized that we were spending hundreds of dollars a month on meals that could have been entirely avoided.
Do we all need a break every now and then? Absolutely! Should you order in just because it’s a TUESDAY? If you have budgeted for that delivery – then yes! But if you are just spending your money without really thinking about it – then NO.
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It’s Possible To Lower Your Monthly Bill Payments
Most people believe that bills are set in stone, but that’s not always the case. Over the last six months, my husband and I have actively worked on lowering all of our bills and it’s been working!
Sometimes it means switching carriers or continuously calling back to get a better deal. But the efforts have always paid off and that’s what really counts. Instead of just accepting the bill rate, try to reduce your expenses by making a few phone calls.
- Call your cable provider and see if there are new deals you can try out
- Possibly switch phone carriers
- Cancel streaming services you really don’t frequently use
- Consolidate credit cards and transfer balances to 0% interest programs
- Lower your heat by a few degrees in your house
- Get a water filter system and a water osmosis system (we are looking at this one) and get rid of water delivery services
- Learn how to meal plan and nix food home delivery services
Tracking Is Knowledge
Tracking is knowledge. You don’t know how much you have until you know how much you have. Everything else is just guessing. I had to learn this the hard way through this budgeting exercise.
Guessing doesn’t do you any good because no matter what – you won’t be NOT accurate.
“We spend around…”
You literally have no clue what you spend on anything. Once you start jotting down all those Amazon purchases, you are going to fall right off of your couch.
The best way to know how much money you make a month (for entrepreneurs) and how much money you spend (for everyone else) is to literally track every penny. There’s no other way around it.
Once you start documenting the hard numbers you can get the full picture and realize that knowledge is power. When you understand where most of your money goes, you can easily work out solutions to spend less and cut unnecessary expenses.
Tracking Isn’t As Hard As You Think
Tracking your expenses really isn’t hard. You might think it’s troublesome and tiring to record everything, but it’s just another habit that takes some time to form. Think of it like exercising or meditating.
Once you start actually tracking your spending, you won’t be able to understand how you’ve lived without doing it.
Just as a personal note, we’ve never invested more in the stock market than after tracking our money habits. I rather take that $100 I had aside for that new sweater and throw it into my stock portfolio. That’s the beauty of this money exercise! You start realizing the VALUE of your money.
Small Moves Add Up To Big Wins
Don’t feel defeated if you can’t do a lot in the beginning. If you are only saving an extra $25 a week – that is a WIN.
If you were only able to reduce your cable bill by $40 a month, that is a MAJOR SCORE. There are no ONLYS when it comes to saving. Everything you do from this point forward will add up towards financial freedom.
I think that is the biggest hurdle for people not knowing where to begin with debt or managing finances in general. They are looking to constantly make major moves and honestly, it’s the wrong mentality to have.
Do what you can. Make little changes in your life whenever you can, and never doubt the positive impact you are having on yourself.
Bonus tip: Head to YouTube
I’m adding this in as a bonus tip because I really love to do this. I find it therapeutic in some way. I watch HOURS of YouTube a day and one of the categories that I frequent is the “Debt Free Community.”
There are plenty of different searches you can do to dive into this world to find new creators. The point will all be the same – listening to real people tell their stories.
I know I could buy books and watch experts on TV, but I’m tired of that. I just want to hear about someone’s struggle, path, and success. And maybe they are still on their journey? Who knows? These videos are just so inspirational to me. I always find a great savings idea or a budgeting tip – at the minimum, they keep me motivated to keep going on my own path.
As a note, I would never follow financial advice like stock picks etc. What I like to listen to is how they set up their budget binders, how they manage their cash envelope systems, what their money goals are – things like that.
Do you track spending and bill paying, budget every month? Would love to hear!
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