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There are various levels of advice that all depend on where you are today.
Just start tracking your spending and income. If you're not doing anything right now, just finding out how much money you waste on things may help you cut them.
Beyond the natural "sticker shock savings" when you find you spend $300 a month on coffee, start looking at what's discrestionary spending and make an effort to cut that down. Monitor your progress through the month while you can still do something about it. If you're going over your budget, figure out why.
Start focusing on the real cost vs cash flow. If you have credit card debt, paying off the credit card is not an expense. By the same reasoning, borrowing money is not income. It's a change of Cash/Debt. Don't feel like you're losing money when you pay down debt because the truth is, you didn't really have that money.
Tracking definitely helped me the most when I was first starting out. I'd go to fast food places for lunch most days and would just brush off the $5 here, $7 there. Then I started tracking and noticed I was spending close to $750 a month on fast food/restaurants.
Something else that I did was whenever I bought something out of the ordinary I would write down why I bought it. Then at the end of the month I would go through and read what I wrote and see if it still sounded justifiable. This helped me with impulse buys, but it was a lot of work and it's easy to lapse.
Yea i think the key here is tracking everything. whether you use Mint or spreadsheets. for me, i wasnt until i saw every single thing that i was spending, and how much it adds up to that i realized it was too much. So for me, Mint is great.
Otherwise, the only other thing is just setup automatic transfers to your saving every month so you dont miss the money.
For a month...track your expenses...then switch to a cash only basis (people use jars, envelopes, etc) and then test your willpower. We found comfort in knowing what are bounds were.
We were spending $600/month eating out...we now only spend $100. My waistline appreciates that.
The grocery envelope had $500 in it...we found that a family of 4 could live quite well on $500 worth of groceries...we do clip coupons and Wal-Mart does price match...so that helps stretch those dollars.
Are there any ideas that you can share on how to properly manage my budget and minimize unnecessary spending?
I agree that the best thing you can do is to track every penny you spend for at least a month (ideally more than that). When you do that, we won't need to tell you where you're blowing money. You'll see it for yourself. Usually, if someone tells you what to do, even if they are right, you will resent it. But if you see it for yourself, you'll be more motivated to change.
The other things people blow too much money on:
--Too much house: Rent/mortgage is too high as a % of income. (Hint: If you're spending 30% of your gross on housing, you'll be living payday to payday the rest of your life).
--Too much car
The other thing I see are people getting pets when they aren't homeowners. That really limits where folks can live and typically increases the rents and deposits they end up paying. If you're not a homeowner, I don't think you should have pets unless you live in a really low cost area.
There are various levels of advice that all depend on where you are today.
Just start tracking your spending and income. If you're not doing anything right now, just finding out how much money you waste on things may help you cut them.
Beyond the natural "sticker shock savings" when you find you spend $300 a month on coffee, start looking at what's discrestionary spending and make an effort to cut that down. Monitor your progress through the month while you can still do something about it. If you're going over your budget, figure out why.
Start focusing on the real cost vs cash flow. If you have credit card debt, paying off the credit card is not an expense. By the same reasoning, borrowing money is not income. It's a change of Cash/Debt. Don't feel like you're losing money when you pay down debt because the truth is, you didn't really have that money.
I categorize my spending on my bank website at the end of every month to see where I'm spending the most money. My wife got on a wine-with-cute-labels binge for a while, so I showed her how much she was spending just drinking wine. Now she buys the large, cheap bottles. She was ordering a ton of books through her Kindle, so I found a low-cost subscription service with unlimited book downloads for her. If you look at everything and find a way to save a few bucks here and there, it can really add up every month. I look through all of my bills a few times each year to see if I can cut a service I'm not using or if I can take advantage of a promotion. I recently logged into my AT&T and got $30 off per month because they're offering a similiar, cheaper plan to new customers.
She giggles at how cheap I am sometimes, but deep down, I know she appreciates me.
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