How to get your spending under control and save money
Last Modified 16th of February 2021
Budgeting isn’t the funnest thing in the world, but assuming you aren’t already a millionaire you are going to have to do some of it in your life, particularly if you want to be financially secure and all of that. Unfortunately, when you are living on a budget you will see opportunities to spend money all over the place.
It’s a bit like dieting in that respect; and sometimes it takes will power to resist spending money unnecessarily on things you don’t really need. If that is something you struggle with then help is at hand. Getting your spending under control is simple once it becomes habit, but in the meantime here are some tips:
Recognise your weaknesses
Hopefully you already have an idea what these are but it is worth keeping a spending diary for a little while and figuring out where your main costs are and what situations cause you to spend money. Remember also that it only takes a small change to have a big impact on your savings. For example:
If you earn £1100 a month and spend £1000 then cutting your spending by just 10% will increase your savings rate by 100%!
Address your weaknesses
Once you have figured out where you are going wrong, you can take steps to fix that. For instance; my worst weaknesses are phone bills and eating out; so if I needed to rope in my spending I might sell my mobile and buy a cheaper handset that I was less inclined to use so frequently (already done this actually) and set myself a monthly limit on meals out, to be followed strictly. Of course it also takes a little discipline, but these steps make it easier to get out of your own way.
Start a spending diary
If you have a habit of overspending in general and on everything then a great way to get it under control is to set yourself a budget on monthly spending. Take out those things that are pretty much certain (rent, bills, insurance. etc.) and decide what you are allowed to spend on everything else (food shopping, clothes shopping, nights out, etc.)
Break that down into a daily spending limit and start a diary each month, ideally in a little notebook that you can keep in your pocket. Every time you spend any money, write it down and at the end of each day total it up. Make a note of how much over or under your daily budget you are and keep a running total.
By doing this you can allow yourself to save up for treats. If you can stay under budget all week you will have enough saved up for a nice meal at the weekend. If on the other hand you go over budget, you have to be extra frugal for a few days to get back under budget.
The great thing about this technique is that you’re far less likely to splash out on some impulse purchase because you will be thinking “if I buy this I can’t go out on Friday.” You have to stick to it of course, but if you can make a game out of staying under budget you will save a lot of money in no time!