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What Are You Spending Your Money On?

When living on less most people will tell you that you should make a budget and that it is vital to cut back on spending.

While these steps are obviously true they can be challenging for a variety of reasons. Making a budget often seems very intimidating because it forces us to confront the depth of the problem we face. That can be really scary.

‘Most people who face financial pressure will have naturally cut back on spending in a variety of areas’

Most people who face financial pressure will have naturally cut back on spending in a variety of areas. When there is less to spend we try to spend less. Many people, however, tend to lean more and more on the use of credit to get by. Access to credit can trick us into spending money in ways that are financially hurting us.

Try This Tip Before You Budget

Before you begin to make a monthly budget why not try this simple tip:

Draw recent bank statements and have a look at what you are spending your money on.

Why not go through a few of your recent bank statements and use a few different coloured highlighters to help you get an idea of what you are spending your money are each month?

You can use one colour for monthly costs like Bond or rental and vehicle finance or transport. Use another colour for food and groceries etc.

By going over your recent statements you may get a better idea on your past spending before you even look at plans for your spending in the future. You may even discover some areas where you have been overspending that you had not realised was happening.