Sunday, February 28, 2010

Where does the Money Go?

One of the main things to do to get your finances under control is to figure out what you have coming in and going out. Many people under or over estimate these numbers. Check you pay stubs to make sure you realize how much you earn each month.

To find out how much you actually spend a month is to keep track what you spend each day (besides mortgage, rent, loan or credit card payments). Keep a daily log of every thing you spend money on. If you can't keep track at the time of the spending, keep track of your receipts and record them each evening. Once you have done this for a week, take a look what you are spending your money on and if anything can be cut out.

Also to help you figure out the reasons behing your spending pattersn, it's also helped to keep a spending diary, in which you can jot down your thoughts before or after you spend money or use your credit card. It you go for coffe every afternoon, for example, ask yourself: what would happen if I skipped the coffee today? Sometimes we do something mainly out of habit. Whe we were growing up, we lived on a farm, when we would go to town we got to pick out a candy bar. It was years after I left home that I realized when I was at the grocery store, etc, I was automatically buying a candy bar without really thinking about doing it.

Also, when considering buying something, ask yourself if you really need it. Also, I have heard some people set a limit of $100 or so. If something is over $100 think about it overnight to make sure you still want it and try curbing impulse purchases.

Just like some people eat when they are stressed or depressed, etc. Some people shop in these circumstances. So if you take a look at how you are feeling when you spend money you may be able to find out if you deal with these issues you can save money on purchases you may not have made.

If you are overspending and stressing about money that can make the situation worse. If you can get your spending under control other aspects of your life may get better too.

It doesn't mean you have to cut out all extra expenses but just consider what you are spending your money on.

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