Hello everyone I’m making an effort to take money management more seriously and reduce needless monthly spending. I’ve started paying closer attention to how I spend my money and I’d love to know what money-saving strategies or budgeting advice others have found to be effective.Are there any easy adjustments that you found to have a significant impact?
parker
welcome @parker Recently I’ve been attempting to do the same.I’ve been able to identify many little costs that build up by keeping track of my daily expenditures.Reducing those has made budgeting much simpler for me.
Zero-based budgeting did wonders for me. When I get my paycheck I split it between categories, with required spending getting funded first (mortgage, insurance, groceries, etc.) and then anything left over gets allocated to discretionary categories (travel, clothes, entertainment, etc.). It’s pretty much the old envelope system, except it’s done via software and the money all stays in the account instead of getting physically divided out. When I buy something, I subtract the cost out of its category. If I want to buy something but don’t have the money in the category to get it, I have to make a conscious decision about whether I want to pull money out of another category to fund the purchase. For example, if I see some yarn that I really like but my hobby category is too low, I have to decide whether I want to pull money out of, say, my travel category. Is it worth possibly having to delay that vacation that I’d like to take next year? Sometimes yes, sometimes no, but it forces me to look at those trade-offs and decide what my priority is.
It may be extreme for some people, but I find the discipline helps keep me in line. I use the YNAB app because it tracks all my spending and has various reports I can look at, but you could probably do a spreadsheet if you felt you didn’t need the bells and whistles.
@tommy @creek_tree I really like the idea of having to consciously choose what you’re giving up when you move money from one category to another. That seems like it would make impulse purchases a lot easier to rethink.I’ve mostly just been tracking my spending so far but I might try a simpler version of the zero-based approach. Even using a spreadsheet could help me see exactly where my money is supposed to go before I start spending it.Thanks for explaining how you handle it
I use a spreadsheet. I do annual budgets by month, listing all the categories. I record every expense as well as all income. It is easy for me to see where I am overspending as well as underspending. I have a sheet listing all my subscriptions (by month and annual) as that was shocking number when I first did it. If anyone wants my budget template, I would be glad to share.
I have used free software KMyMoney for about a decade. you an specify categories and get reports very easily with that. I only use my checking account for set monthly expenses (mortgage, utilities, etc. and I put everything else on a credit card (for cash/points) which I pay in full every month. I download transactions from my CC and bank every day. It’s great (and free) software.
Start out with a budget. Dave Ramsey’s radio shows and podcasts describe Dave’s money management plan. Dave’s books are very informative also. Tried & true! Best to you on your financial journey!