Along with smarter choices you make in your everyday spending behavior, you need to manage your overall money. You need to keep a record of how much money you are making and how much you are spending, and then categorize your expenses so you can know what needs to be worked on or fixed.
Keep the record of Your Income & Expenses
You need to put your income, savings you want to target, and your every bit of expense in an excel sheet (old school) or a good money management/budgeting application i.e. Mint, HoneyDue, PersonalCapital etc.
Record every bit of expense you make throughout the month. Record Every bit of income you get along the way.
Evaluate your records
The budgeting app will give you good idea through graphs and charts. Excel sheets will also help you know how much you actually make on average every month and how much you spend. Where were you extravagant and what was a necessity. You will know exactly where you wasted your money because of impulsive buying. Maybe some of the stuff can still be returned.
Make an Action Plan
You need to draw yourself a plan for your goals and targets. If your goal is to save money, you need to know where this money will come from. would you cut costs on some category or will you work an extra hour every day to make up for this goal?
Work towards your Plan
Whatever plan has been laid down by you, it is important to make it work every day. Do not make a habit of missing on it too many times or you will never be able to see it to fruition.
Invest
If you have long-term plans for savings or education, or a long trip, make sure to invest your money somewhere. Money in the bank is as good as losing 2% of it every year to Inflation. Technically, a $100 in a bank for 50 years would be as good as $0.
Thanks for reading, you can read
Part 1: Impulsive Spending - Smart spending tip # 1
