Create a list of your fixed monthly expenses such as rent, insurance, utilities and food. Track your spending every day for a month to find out exactly where your money is going. Don’t forget small purchases – they can really add up!
Take note of areas where you may be spending more than needed and decide how to reduce or eliminate any unnecessary spending, also known as “spending leaks.” Mobile apps can help you track and categorize your purchases on the go. Use this information to build your budget or spending plan.
Spending leaks can add up! Have you identified yours?
- Daily coffee purchase, meals out. Compare the price of a daily coffee purchase vs. making it at home.
- Music or app downloads
- Incurring avoidable bank fees (overdrawn account fees, fees for using ATMs through other banks, etc.)
- Impulse buying at the supermarket, convenience store or clearance rack
Identify your leaks
- Track every penny you spend for an entire month.
- Review your expenses and identify whether the purchases or expenses are a “want” or a “need.”
Plug those leaks
- Make your own coffee and lunches at home.
- Stay away from clearance sales or impulse buying.
- Ask your bank or credit union if they offer overdraft protection.