Have you ever gotten paid, then wondered where your check went after just a few days? If you feel like you’re spending is out of control, you’re not alone. Managing money well is a skill that’s developed over time. It all starts when you audit your spending and create better habits that provide you with more control.
If you feel like money often slips through your fingers, here are a few things you can do to audit your spending and regain control of your money.
Get Clear on Your Values
It’s important to know what you value in life. Your values may often align with your core beliefs, interest, and goals. Basically, it represents what you find most important in life.
It’s great to identify your values ahead of time because you’ll want your spending to align with them. When you’re not spending according to your values, you’ll often feel regret or remorse after making certain purchases.
This will often lead to an unhealthy relationship with money.
To get a better understanding of what your values are, ask yourself what makes you happiest and most fulfilled. Be honest with yourself about your hobbies, lifestyle, habits, connections, and actions.
Narrow down a list of core things that you value to the rawest level. For example, if you believe you value material items like shoes, narrow down why you feel this way. You’ll be surprised to learn that it may not be the shoes at all that you value. It may be the shopping experience, spending time with friends while wearing the shoes, etc.
Track Your Expenses
Tracking your expenses is one of the best ways to audit your spending. Most people who have out of control spending habits don’t even know what they’re spending money on.
This is why it’s best to track your spending regularly (at least every other day if you can.) You want to be aware of what’s going on in your checking account and where your money is going specifically.
From there, you may start to notice patterns.
Identify Impulse Purchases and Spending Triggers
After you track your spending, you may notice that you’re making quite a few impulse purchases. Those snacks after the gym, Amazon bestseller items list, and spontaneous store purchases all add up.
Be sure to add up all your impulse purchases on a weekly and monthly basis then categorize them. The most expensive categories are the ones people need to worry about most.
For many people, dining out is a major impulse purchase. To control and minimize your impulse purchases, you’ll want to know what your spending triggers are and overcome them.
For example, one of my spending triggers was walking through the discount section at Target along with buying food when I was out running errands.
If I got hungry or bored, I’d immediately think about how good it would be to buy a snack or a restaurant meal. I would also consider going through the drive through if I didn’t know what I was making for dinner or have anything prepped.
I overcame these spending triggers by avoiding some of the stores and websites where I frequently shopped throughout the month and by doing a better job of prepping and planning meals and snacks.
Make Your Values Affordable
When you determine your values and give yourself permission to spend money on them, that doesn’t automatically mean that your values are going to be cheap.
You may value things like travel, health, or a hobby like rock climbing. Spending money on all of these things can get quite expensive so it’s important to look for ways to make them more affordable.
You can buy used rock climbing equipment for your hobby or go to indoor rock walls on discount days.
Spending money on your values can make you feel even better when it fits within your budget.
Uncover Savings For Everything Else
For everything else that isn’t on your value’s list, find a way to save money on the expense anyway. You might want to get a roommate to help lower your rent or mortgage. Or, you can negotiate lower rates with your utility bill companies and your cable service provider.
You can switch to a cheaper phone plan, compare auto insurance rates, use coupons when shopping for groceries and household goods, and use discount sites to help you search for deals on items you need.
I use a subscription service to order all my household items and toiletries at a discounted rate. I set up an automatic order each month so I don’t have to waste time shopping, and the items get delivered to my house for a fraction of the cost.
By spending less money overall, you’ll be able to consolidate your spending and possibly even free up some extra cash each month. Ultimately, after you audit your spending, you will feel more confident about your financial situation.
Have you ever audited your spending or tracked your expenses?