I have had a love/hate relationship with my bank account for a very long time. I used to wonder where my money was going and why I could not save as much as I needed. There were times when I did not work as often and would receive smaller paychecks, but I still spent money the way I did when I was paid two or three times as much. After finally admitting to myself that I had a problem, I found some methods that helped keep my bank account from hitting $0.
1. Track your spending habits
Use apps like Clarity and Mint to track your spending.
I began keeping receipts at the beginning of the year. I put the receipts in a small file folder and organized them by month. I keep receipts for all purchases no matter how small because too many little purchases can add up to a large amount. When I went back and looked at the receipts, I paid attention to where I was going and how much I was spending. I also looked at what I was buying and realized that I was buying multiples of items I already had and spending too much money on meals and snacks. I was also buying small and unnecessary items that I would only use a few times just because I had the money.
A great way to also track you spending if you don’t want to keep receipts is to write them down. I bought a small book at Michael’s for $4-$5 with monthly budget sheets and sheets to document the date, item, and amount spent per purchase. I put these sheets in my planner and write down what I spend for the week. This gives me a visual reminder of how much I am spending because it is easy to forget when you are constantly swiping a card.
2. Look at your income and expenditures
Next, I looked at my monthly income and calculated how much of that income was going into certain categories. I looked at how much of my money was automatically being taken out for bills each month and how much was spent on gas and food. When I went through my bank statements, I saw that I was paying almost $40 a month for services I did not even use. There were multiple video streaming subscriptions, Kindle Unlimited, Audible, and Apple Music. I was not even aware that I was paying for some of these services because I did not get any emails about the monthly payments. I made a list of my monthly payments and subtracted them from my expected income each month to decide on a budget.
It is never wise to overspend to the point where you are unsure of how you are going to pay for the things you really need. I had to prioritize my spending to make sure I had money to save and spend on the things I could not go without. This meant that I needed to cut back on the areas that were taking too much of my money like snacks and cosmetics.
4. Find alternatives where needed
To cut back on snacks, I decided to drink more water because I was spending almost $20 a week on drinks alone. I would buy sodas or juice every day when it really wasn’t necessary. Now, I take a refillable water bottle to school and work to cut back on buying drinks. I also stopped buying fast food as often and began cooking more of my own meals and setting budgets for food each week. When I give myself a food budget, it forces me to be less impulsive.
I have a habit of buying multiple bottles of soap and lotion. I run out of a bottle and purchase another without realizing I have 3 bottles at home that were barely used. This might be okay if you like to have different scents, but I always gravitate toward lightly scented or unscented soaps and end up with multiple bottle of the same brand and scent. This also happens with my hair products. I buy replacements without finishing a container and have two or three jars of conditioner that can be combined o make a full jar.
Sometimes, the alternative to spending too much money is to get organized and use what you have before buying something else. I have wasted money on replacing items because I was not organized enough to keep track of what I already had.
5. Coupons and discounts
When I was younger, I used to look at the PennySaver and try to find coupons for products I saw in the house. I was much younger and did not actually need to use these coupons because I was only an elementary school student. However, I did not realize how helpful coupons could be. Each coupon may only save you a dollar off on an item, but they can save you even more on a basket full. Students also get discounts at multiple restaurants and can get them online. A UniDays subscription is free and has coupons for apparel, technology, and more. You can also get a $5 per month Apple Music subscription by verifying that you are a student. An Amazon Prime subscription is $49.99 a year for students and can be helpful when you are buying textbooks or other items you might need for school because you get free 2-day shipping. There are also student discount cards at the front desk.
6. Set a Goal
Set a goal for how much you are trying to save for a certain amount of time. Goals work better when they start off small or have multiple steps. If you are trying to save an extra $200 a month, divide it into a certain amount per week. Figure out what your budget can be for that week and try to stick with it. It can be difficult at first, but it will become easier with time.
One of the most common financial mistakes people make is not having a budget. I learned the hard way that there is a difference between having the money to buy something and being able to afford it. It may be tedious to track your spending and give yourself only a portion of your money to spend, but being disciplined now can save you financial trouble in the future.