You say you know where your money goes and you don’t need it all written down to keep up with it? Or maybe you’re just ignorant and don’t see this as an issue? issue you this challenge. Keep track of every cent you spend for one month and I do mean every cent.
You can easily track your spending by using a mobile app. I personally recommend ‘Money Manager,’ a financial planning, review, expense tracking and personal asset management app for Android. There are many apps out there doing almost the same thing and it’s up to you to decide which one to use.
In the end, if you track those expenses, you will be surprised at what the itty-bitty expenses add up to. Take the total you spent on one unnecessary item for the month, multiply it by 12 for months in a year and multiply the result by 5 to represent 5 years.
The numbers don’t lie, baby. That is how much you could have saved AND drawn interest on in just five years. That, my friend, is the very reason all of us need a budget.
I repeat, budgeting is one of the basic tools in personal finance management. If we can get control of the small expenses that really don’t matter to the overall scheme of our lives, we can enjoy financial success.
The little things really do count. Cutting what you spend on lunch from 5 rand a day to 3 rand a day on every work day in a five day work week saves R10 a week… R40 a month… R480 a year… R2400 in five years….plus interest.
See what I mean… it really IS the little things and you still eat lunch everyday AND that was only one place to save money in your daily living without doing without one thing you really need. There are a lot of places to cut expenses if you look for them.
Set some specific long term and short term goals. There are no wrong answers here. If it’s important to you, then it’s important period.
If you want to be able to make a down payment on a house, finance your postgrad education, buy a sports car, take a vacation… anything… then that is your goal and your reason to get a handle on your financial situation now.