A spending log is one of the most important parts of establishing and keeping a budget. Learn how to get started with a budget, and how to track your spending.
It's easy to spend money, so why isn't it so easy to save it? The sad truth is, many of us don't remember how we spend our money from one month to the next.
A treat here, a meal out there, and soon the money you've worked hard for is gone. If you're hoping to keep better track of your money, a spending log could help. Here are some tips on how to start budgeting.
Go Through Your Statements
Before you get started with your budget, it's important to understand how you're spending your money. Go through your bank statements for the last three months and pinpoint where you've spent your disposable money.
Perhaps you like to buy clothes or have a weak spot for video games. However, these are things you can cut back on buying when you want to save your money with a financial goal in mind.
Make a List
You may find several expenses on your bank accounts that you'd like to change. Make a list of the expenses that you don't really need to be spending money on. For example, could you make coffee at the office instead of stopping at Starbucks each morning?
You may find that you have subscriptions that you no longer use too. For example, it's not necessary to have a subscription to Netflix if you use Amazon Prime more often. Apps like TrueBill can make finding subscriptions a bit easier.
Get Help Budgeting
If the thought of doing your finances makes you cringe, you may need some help with your budget. There are tons of free budgeting apps that can help you understand your disposable income and how to use it in order to save money.
Of course, you can also do it the old-fashioned way and create a spreadsheet on your computer. Categorize your spending into columns, like debt, bills, food and other essentials.
Once you've gone through your finances thoroughly, you should be able to spot areas of improvement. Budgeting may mean sacrificing things that you like to treat yourself with, but it can also mean you're in a much better financial situation twelve months from now.
For example, if you're trying to save to pay for your own wedding, you'll need to put aside as much as you can. Even your morning Starbucks can make a huge difference over the space of a year.
Lower Your Bills
When was the last time you compared quotes for your life insurance or your energy bills? You could be paying more than you need to if you haven't checked for cheaper alternatives in a while.
Creating Your Spending Log
Once you get into the habit of using a spending log, it can serve you well your entire life. Creating good spending habits will ensure you always have what you need for a rainy day, when the unexpected can happen.
If you're already planning your wedding, take a look at five ways marriage can change your finances.