Controlling spending is an essential tool for maintaining personal finances. For many people, it is a major challenge to know how much money they will have at the end of the month.
Maintaining a positive budget requires healthy financial attitudes. But it's not always possible to act in a balanced way and we often run up debts with expenses that could have been avoided. In this article, we'll look at some ways to save money and reduce expenses in your routine by controlling your spending.
Table of Contents
What is the importance of controlling spending?
Sometimes, even those who are knowledgeable about the subject don't act in a balanced way and run up debts with expenses that could have been avoided. This makes it very difficult to have a positive balance in your bank account even to invest with the future in mind or to make your dreams come true.
That's why, as well as knowing what types of spending make up your finances, it's very important to understand how to control your spending and save intelligently to have a healthy financial life and a more comfortable future.
How do you divide your salary?
One of the first steps to controlling your expenses is to understand how to use your salary healthily. So, as well as knowing what your essential expenses are, you also need to know how to distribute the rest of the money left over from what you receive each month.
After all, there are other ways to invest your money, for example through investments. One strategy for dividing your salary is the 50-30-20 system.
What is the 50-30-20 system?
The 50-30-20 system is a method of distributing your salary as follows:
- 50% of your expenses should go to essential expenses;
- 30% for superfluous expenses
- 20% for debts or investments
With this division, you automatically have greater control over your spending before you use your money.
Once you've determined how much you can spend on each item, it's time to keep track of your expenses by recording them.
How can I control my expenses?
You can start keeping track of your expenses very simply. For example, write down everything you spend during the day on your cell phone, in a notebook, or in the appropriate apps for tracking expenses. Another alternative is to use notebooks to write down everything, from your income to your expenses.
To make it easier to keep track, ask for receipts for everything you spend, from supermarket purchases to online shopping. Also, if possible, try to make these records right at the moment of purchase or at least set aside some time at the end of the day, as daily records are essential for keeping track of your spending.
In addition to mobile apps or more traditional forms of note-taking, such as notebooks, an expense spreadsheet is an excellent automated tool to help you keep track.
What is an expense spreadsheet?
An expense control spreadsheet is a document designed to record the entire financial flow for a given period, making it easier to keep track of all the money coming in and going out.
It is usually built in the form of a table, i.e. with columns and rows. To do this, you can use software such as Excel, Calc, or Google Sheets. As these tools have all the necessary structure to organize the fields and calculate the totals, it's even easier to keep track of expenses.
How can you avoid unnecessary spending?
We've already mentioned that, before taking any steps to control your spending, it's important to understand the history of your finances and organize your spending in a spreadsheet, app, or any other financial control tool.
It is also essential to understand that expenses can be classified as essential and superfluous and, based on this classification, we can make choices to save our money.
Suppose you took your bank statements and credit card bills from the last few months and organized them in a spreadsheet, classifying each of your monthly expenses. Here are some tips on what to do next to avoid unnecessary spending.
1. Essential expenses can be saved
If you take a good look at your spending, you'll probably identify some of these expenses that can be reduced without causing a major impact on your life and routine. This is the case with saving on water or electricity. Being able to reduce bills that are already constant is a big step towards saving money.
2. Renegotiate superfluous expenses
You can always keep some of your expenses but try to reduce your monthly bill. Contacting your cell phone, pay TV, or internet provider and looking for plans with reduced prices are great examples of how you can have more money left over at the end of the month and increase your investments.
3. Always ask for a discount
Even if you control your spending from month to month, unexpected expenses can arise. And if the purchase isn't negotiable, the discount probably will be. For most purchases, you can talk to the salesperson or manager and get a lower price if you pay cash, for example.
Also increasingly popular are websites and promotions that offer discount coupons for the purchase of certain items, especially in times of promotions. Looking for this type of benefit can also help you save more money and invest more at the end of the month.
4. Extra income is always welcome
For many people today, extra income has become fixed income. But even in these cases, when there is no fixed amount of income in the month, it is always possible to find new alternatives to get extra money into your budget.
Depending on your line of work, you can find various opportunities on specialized websites. What's more, with the plethora of free content on the internet, you can learn new activities every day to earn an income from home.
5. Cooking at home is good for your health and your wallet
As well as helping your health, the additional costs of eating out can be avoided if you control your finances and direct the money you save towards another financial goal.
6. Impulse purchases affect your future
Realize what you need to buy out of necessity and exclude what is superfluous. We are often seduced by promotions or sales in stores that affect our spending at the end of the month. Your financial future, your dreams, and goals will be realized if you control your spending and make conscious purchases.
Conclusion
Never forget: saving is the first step on the road to a healthy financial life.
The sooner you get into the habit of controlling additional expenses and saving your money to invest, the sooner you will get closer to your financial freedom.
Do you have questions or suggestions? You can leave them in the comments!
Share this post to help spread the word!