If you feel like money just seems to slip through your fingertips whenever you get paid, you’re not alone. Only 32% of Americans admit they maintain a household budget.
But even if you have a budget, this won’t fix all your financial problems. You need to create a realistic budget and then stick to it.
The best way to start is to track your spending. This way you can base your spending categories on actual numbers and not assumptions. Better yet, you can plan your spending accordingly and possibly even free up some additional money to save.
To help you get going, I’m going to share with you how I regularly audit my own spending. I recently tracked my spending for a week and here’s what I found.
It’s Easy to Track Your Spending with Mobile Banking
Let’s face it, most people don’t carry around cash all the time.
While you may use cash for some expenses, you likely also use debit cards and rely on mobile banking to track your purchases. This can be helpful because all you need to do is check your account to review your purchases over the past week or month.
During the week I tracked my spending, I spent $292.71. Here’s how that total breaks down:
- Dining out and take out: $26.21
- Household supplies and store runs: $49.54
- Bills: $160.97
- Subscriptions: $36.99 (gym membership and Audible)
- Miscellaneous expenses.: $19
Analyzing My Spending
I chose to track my spending for this particular January week because it was a typical week for us. There were no major events or large planned expenses.
We paid bills as usual, ran some store errands, made a nine dollar impulse purchase on behalf of my son, and dined out two or three times. We did end up adopting a dog from the shelter in January so the $10 hold fee I had to place on our dog was included in the miscellaneous category.
The following week, we paid $80 to cover the adoption along with a few other supplies and food items for our new pup. There wasn’t much I could do to save for that purchase, but I could have planned for it better.
Developing an Automated Savings Plan
An automated savings plan would have been perfect for our decision to add a new dog to the family. First off, we knew we were looking for a dog since early December. And, when adopting from a shelter, you never really know when you’re going to find the right dog for your family.
However, you can always start saving and preparing in advance. To do this, I recommend drafting up a general budget based on a few common expenses you know you’ll have to pay, and then start setting aside the money. We knew the fee to adopt a dog from the shelter was $90. We also knew we’d need to provide food, water and basic supplies. Then, there’s always the consideration that we would adopt a dog with special needs which would require us to put more money toward care and medicine.
Whether you’re planning to adopt a new dog or not, this strategy can be used to help you prepare for any extra expenses that can throw off your budget. Want to buy an appliance or enroll the kids in summer camp? You can start preparing for the expense in advance by drafting out a budget and automating your savings.
Another tip: Determine how much time you have before you’ll need to make the purchase and divide your savings goal up. Each time you get paid, you can even have a portion of your paycheck automatically deposited to savings.
Saving on Dining Out
After tracking my spending for a week, I realized I could have also saved in these two areas as well: store runs and dining out.
Dining out was a small amount, but it was extra and unplanned nonetheless. I know this because I usually withdraw my dining out and entertainment money at the beginning of every month so I can hold onto the cash and budget better.
The money in my account typically doesn’t go toward dining out unless I’m overspending. This week in particular showed that although my spending wasn’t out of control, dining out is definitely an expense I struggle with. Whenever I overspend in this category, I view it as taking a step backward when it comes to reaching my goals to pay off debt and boost my savings
I try to combat the urge to overspend in this area by planning out my meals and snacks ahead of time. To do better, I’m going to start batch cooking and freezing some of my meals more often. This way I have something to rely on when I don’t feel like cooking and I’ll be less tempted to order takeout.
Also, simply having the cash withdrawn to cover this expense is helping me stay on budget, along with setting clear savings goals.
Saving on Store Runs
Store runs have been the worst for my budget lately and it all comes down to a lack of proper planning.
My husband and I have decided to get better at this by keeping a running list of the items we need for the house so we can grab everything at once on a weekly basis. The fewer times we go to the store, the fewer opportunities we have to grab extra impulse items and forego our savings plan.
However, it’s important to realize that there’s nothing wrong with shopping for your needs. If you want to save and still have the freedom to run to the store when you want, consider using Chime’s automatic round up savings feature.
This feature allows you to automatically round up your transactions to the nearest dollar and save the round up amount in your Chime Savings Account. This way when you spend, you’ll save as well.
Find the Money Leaks in Your Spending
Auditing your spending for a week is super eye-opening if you want to get a realistic view of how much money you spend, while pinpointing some key areas where you can save.
I was able to track my spending for the week and do an analysis in just a few minutes, so you can definitely do this as well.
Remember: Make it fun and estimate how much you can save once you fix all the leaks in your spending habits. From there, you’ll be on your way to spending less, saving more and reaching your money goals!
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal and accounting advisors before engaging in any transaction.