When it comes to saving money, one of the basic aspects to look into is your spending pattern. This enables you to determine where your money goes and assess how you can get more for your savings account. You might say it’s time-consuming, considering the various things you spend money on, but don’t worry. To get started, here are some tips on spending and saving money:
Get your bank statements from the last three months or so.
This is tangible proof of how your spending pattern looks like, more so if you prefer using your debit and/or credit card in shopping trips and bills payments. By looking at your bank statements from a certain timeframe, you may see a trend on the aspects that get the lion’s share of your income.
Categorise where you spent your money.
Create your own system in categorising your expenses. This will make it easier to keep track of your spending pattern on a regular basis. For instance, spending can be categorised into: utilities, food, insurance, medical fees, etc.
Identify your sources of income.
Reviewing your spending habit also entails knowing where your money comes from. If you have sources of income aside from your job, make sure to take note of these so you can better understand what your expenses on a given period should be.
Work out if you were ahead or behind.
Reviewing your spending pattern on a regular basis will tell you if need to keep up with achieving your financial goals or if you need to maintain your normal spending habit.
Identify areas where you can save money.
If you’re serious about increasing your saving potential, determine opportunities where you can cut costs. Whether it’s reducing the number of times you eat out or indulge in large cups of coffee, small changes can dramatically increase your savings over time.
Reviewing your spending pattern can be an eye-opening experience as it tells a lot about how mindful you are of your money and savings. Whatever your financial goal is, it is important to regularly review where your income goes so you can have a better understanding of how to spend money wisely and save money. It may look daunting at first, but once you develop the habit of looking at your spending pattern, you’ll realize that it’s a very simple and rewarding thing to do.
Do you have other tips on spending money wisely? Share them with us through the comments section below.