Keeping a spending diary is a cinch. But it can really help show you where you are throwing your money away and so how you can make big savings on your day to day purchases.
Actually, keeping a spending diary is something everyone should do for a month once every couple of years even if you’re not in debt. Not only is it a fantastic way of seeing just how much money slips through your fingers, but it can help you manage your money better.
How do you do it?
Simply keep a notebook with you (or just some bits of paper) wherever you go for a month and writedown everything you spend each day.
If it’s a newspaper, or a bus fare, or a coffee or a round of drinks, write it all down. Keep the transactions clear noting what you spent, where you spent it and exactly how much the total was.
At the end of the month, write down your spending in columns (‘newspapers’, ‘travel’, ‘eating out’, ‘coffees and sandwiches’ etc) or put it onto a spreadsheet (clever you) and you’ll see where your money is being frittered away on a weekly basis and where you need to cut back.
The total can often be quite a shock. £2.50 on a coffee doesn’t seem like much. But buying 20 a month is £50 which is a hefty sum to be spending on hot water, milk and coffee that you can buy in the supermarket for a fraction of the price.
What you’ll find is…
- You will start questioning your spending and within a week you’ll find yourself spending less, especially after you admit chomping down on a seventh burger that week was really unnecessary.
- You’d be amazed at how much these little bits of spending add up to at the end of the day
If you find yourself making really pointless purchases, then make a small note next to the purchases describing how you felt when you bought your little gift. Knowing why you spend will help you control your urges to self-indulge, thus making it easier to stop.
Remember, managing your money is about creating a balance. You may certainly spend, but make sure you only spend on things you really want or need and help yourself afford them by cutting back on things you are not really interested in.