By Olivia Fischer
When seeing a friend recently they made the comment “I can’t seem to get ahead with my savings – I don’t know where my money goes”. When you think about, this is a pretty scary statement – that’s your money, you should know where every cent of it is!
So we grabbed a pen and paper and started to track where this money was going! While there are some great apps and programs out there to help you do this, the quickest and easiest way I find to take stock of what you’re spending is to simply jot down all your outflows and measure this up against your inflows, and hopefully, you end with a nice positive number. In the age where everything is paid for via EFTPOS and internet banking – this should be an easy exercise.
Once you have your list, you can start scrutinizing your spending. Critically consider what you might be able to start cutting back on or whether you might be able to look into a better deal for some expenses to start making your net cash position at the end of the month grow (do you really need to subscribe to three different television streaming sites?). Why not pick one expense each month to really dig into and see if you can make some savings – you might be able to get a better deal on your internet simply by asking your provider, perhaps a prepaid mobile plan could help keep some extra dollars in your pocket, or you could simply unsubscribe to email advertising that keeps hooking you into internet shopping splurges.
Once you’ve tallied up your monthly expenses and spending habits, you should also consider those bigger bills that come along every quarter or year: car registration and insurance, electricity bills, house insurance. Try dividing these expenses up into fortnightly amounts and put that away each pay so that when the bills roll around in a few months time you have the cash there ready to go.
Tightening your expenses isn’t about giving up things you enjoy; once you’ve identified areas you can save on set yourself a big goal or incentive to work towards to reward yourself – whether it’s a house deposit, overseas holiday, new car, or grand piano. If you have something to work towards and a big goal in mind that can help to discourage the daily spend at your local barrister and build those savings.
So if you find yourself asking a similar question and scratching your head wondering where your money has gone, start by taking a good look at your spending. You might get a (slightly scary) surprise at what you spend each month, but you’ll also be able to start finding ways to grow your savings and work towards your goals. After all, it is your money, so make sure you are making the most of it!