Most people see their money in the bank but after a few quick transactions it disappears as if a magician was playing a trick on them. Learning how to be frugal with money isn’t hard. Knowing what is available and where it goes can help uncover secret money drains that can be prevented with a little forethought and planning.
Know where the money goes
The majority of a family’s budget is spent on the following:
- Upkeep of the home
- Car expenses
- School expenses and other bills
Knowing where the money is supposed to go will help keep track of how much is actually being spent on each necessity. Determine when the bills are due and make a calendar so all bills and payments will be made on time. This prevents unnecessary late fees.
Keep track of receipts and miscellaneous expenditures
Use a tracker of some sort to record all receipts. Excel spreadsheets, columnar journals or even just a pad of paper and a pen can be used to record receipts. As the list of receipts grows a pattern will appear that shows where money is being spent and in what amounts. Once the patterns are recognized, they can be dealt with accordingly either eliminating them or reducing the amounts spent on them.
Receipts can be stored in smaller envelopes by the month and a year’s worth in a larger envelope. This will help keep track of expenses used for taxes and business purposes as well. When used wisely receipts can offer a highly detailed picture of how wisely a person spends their money.
Create a budget and spending guide
Once it is known where the unnecessary expenditures are coming into play, steps can be taken to avoid them in the future. Prepare a budget for the household expenses and a spending guide for any miscellaneous purposes. Sticking to both will allow a person to save money by eliminating poor spending habits and in the long run it will help them to save a portion of the money they are left with at the end of the month.