How to Save money every month
Where is all my money going? At the end of every month do you every find you asking yourself this question? I make X amount of dollars but where does it all go?
Over the years I have counselled many clients on money management and I find the best way to see where all your money is going is to do this one simple task.
Get Organized - Print out your bank transactions
Start with 3 months history. Grab a few different color highlighters and start highlighting. I find the most common categories are eating out and shopping. You might have other categories, it might be beauty like getting your nails done, hair, make-up, waxing, botox etc or it could be vacations/excursions like weekends away, spa trips, biking trips, skiing trips etc. Everyones spending is a little different but I like to find the common daily spending that happens almost without thinking about it. Most people will find a lot of money spent on those first 2 categories I mentioned (eating out and shopping).
Edit - Time to change some spending habits
Now that you have highlighted and added up each category you have clarity. You can visually see that you have spent X amount of dollars each month. It’s not unusual to be shocked by the amount you spend without even realizing it. When I sat down with my girl-friend and did this with her she kept yelling “whaaaaaaat”. She was in complete disbelief.
Get Focused - It’s time to save
I’m going to tell you right now, the all-or-nothing attitude does not serve you. You need to make changes that will last a lifetime. It is completely unreasonable and unrealistic to think that you will stop eating out or stop shopping all together . You need to live a little. But you CAN make a goal to cut down by 25% or 50%. Once you decide, do it. So if you found that you were spending on average $300/month on eating out, you can cut it down to $150. Easy. Ok, maybe not easy but doable.
I would love to hear from you, have you tried this? How much money did you find? What did you do with your extra money? Pay off debt? Save for your emergency fund? Invest?