Where Did All My Money Go?
As in most bad habits – bad spending habits can run the range from minor indulgences that have little to no impact on your finances to serious problems that can ruin you financially and may require professional help.
If you are broke at the end of the month and honestly don’t know where your money has gone – bad spending habits may be responsible.
To find out what your spending habits are – you need to carefully track your spending for at least one month.
Track Your Spending
From a simple note book to apps for your mobile phone – there are many ways to track your spending.
The important thing is that you track ALL of your spending.
It does not have to be complicated – but it does need to be complete and accurate.
If you are not comfortable making entries when you make a purchase, get into the habit of ALWAYS getting receipts and filling in the details the same day. Seriously, without receipts most of us do not remember how much we spent and where we spent it by the end of the day.
Identify Your Spending Habits
Using your tracking records total up your spending – by week and by month.
What you find (if you have been thorough) will most likely surprise you.
If you have identified spending habits that you really want to change, then you will have to commit to making the necessary adjustments.
If you don’t think you can change – then you are probably right. Changing habits requires a total commitment to the change, half-hearted tries will most likely result in failure.
But if you really want to change – if you want to have more of your money left at the end of the month – then you need to be willing to make the changes and you need to have a plan.
Note: Continue to track your spending – consider it a good spending habit.
For your plan to work, it will have to be customized to meet your needs – and you should write it down. Writing out your plan will help you to focus on its success.
Post your plan somewhere you can see it every day – and record your success on it to reinforce your efforts. Be sure to record how much you saved every time you avoided your bad spending habits.
Examples of simple plans:
- If you are breaking the costly habit of buying a coffee and a muffin on your way to work each day, you will need to get into the habit of making coffee and eating breakfast at home. This may mean that you will have to get up 10 minutes earlier, use the timer on your coffee maker and stock breakfast supplies in your kitchen.
- If you are breaking the extremely expensive smoking habit, you may need to look into getting nicotine patches, avoid smoking situations, and speaking to your doctor.
- If you are breaking the store browsing habit, you will need to find inexpensive activities and hobbies that will give you something to do rather than shop.
- If you are breaking the spend-too-much-at-the-grocery-store habit, you will need to start using weekly flyers, writing up your shopping list, and setting a reasonable budget for groceries.
Most of us have slips when we are trying to break habits – don’t give up. Put it behind you and get on with following your plan.
If you find your plan is not working – find a new way of breaking your bad spending habit.
The important thing is to keep trying until you succeed.
Once you have improved your spending habits, you might discover that you are ready to take an even more active role in improving your finances.
Whatever you decide, enjoy your success.