It’s easy to get into the habit of mindlessly spending money on everything from your daily Starbucks drink to an impulse purchase on Amazon. Although the occasional unplanned purchase is fine, not being mindful of what you are spending money on and how often you are spending it can put you over your monthly budget. Fortunately, curbing your spending can be easier than you think.
If you need money-saving tips, here are seven ways to stop sabotaging your money.
1. Keep Track of Everyday Expenses
You might not realize how much you’re spending every day on morning coffee, cab rides or lunches out. “If you’re like most people, a lot of your spending is done kind of automatically,” said Carrie Schwab-Pomerantz, board chair and president of the Charles Schwab Foundation.
To save money, Schwab-Pomerantz recommends keeping track of every purchase you make for 30 days in a notebook, budgeting app or online tracker. “See where you might be able to cut back,” she said. “With a heightened awareness of each expenditure, you may quite naturally make better spending decisions.”
2. Track and Categorize Your Regular Monthly Expenses
In addition to the out-of-pocket purchases you’re making daily, you also pay monthly bills for things such as utilities, cable, internet and rent. Schwab-Pomerantz recommends tracking all your monthly expenses, and separating them into two categories: “essentials” and “nice-to-haves.” Then compare your total monthly spending to your monthly income, and see whether you are in the black or the red.
“With these monthly numbers in front of you, you can begin to make more mindful decisions,” she said. “If you have the good fortune to be in the black, perhaps you can direct more money toward savings — or even treat yourself to something special now and then. If, on the other hand, you’re falling short, you’ll want to take another look at your budget. Where are you spending too much?”
3. If You’re Not in Control of Your Spending, Leave Credit Cards at Home
Credit card debt can be a slippery slope. If you know you’re an irresponsible spender, avoid using plastic to make purchases — this is also one of the easiest ways to save money.
“Limit yourself to paying with cash instead of swiping your credit card,” said Natasha-Rachel Smith, personal finance expert at cashback site TopCashback. “This allows you to only purchase items you truly need, and deters impulse spending.”
4. Avoid Triggers
“It is important to identify your spending triggers, and to avoid situations that will prompt you” to use your credit card, said Smith. “Common spending triggers include stress, having a bad day, social pressure, credit cards, boredom or social media pressure.”
The next time you find yourself tempted to spend, ask yourself if you really need to make this purchase, or if you just want to shop as a reaction to something else. Knowing why you’re buying something could lead to an easy way to save money.
5. Remove Online Payment Information
It’s easy to mindlessly make online purchases when all your credit card info is already stored and saved to your account. Kenzi Wood, blogger at personal finance site Picky Pinchers, racked up a $1,000 Amazon bill due to the ease of purchasing. “I was guilty of blowing money on useless trinkets on Amazon,” she said. “I adjusted my browser settings so I didn’t save my login or payment information. The extra inconvenience of logging in and finding my card was enough of a deterrent.”
6. Automate Your Savings
You can cut down on spending and save money by limiting the funds you have available. Set up your accounts to automatically have money taken out of your paycheck or checking account and put into a savings or investment account, such as a 401k. “Call it forced discipline; you aren’t likely to spend money that you didn’t have in your checking account to begin with,” said Paul R. Ruedi, CFP, financial advisor at Ruedi Wealth Management.
7. Set and Achieve Financial Goals
Set “goals that are specific, measurable, attainable, relevant and time-bound,” said Schwab-Pomerantz. “Now make your goals real by writing them down … and calculate what it will take to reach each goal.”
Schwab-Pomerantz recommends writing down one short-term, medium-term and long-term goal, plus the dollar amount to reach each one. “Once you’ve zeroed in on your three primary goals, figure out how much you need to save monthly toward each goal,” she said. Having something tangible to save for will motivate you to spend less.