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How To Manage Everyday Spending

It’s often hard to know how much you’re spending – until you overspend.  So set up a system that puts you in control.

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Decide How to Spend Your Money

You Can Make a Budget in Just a Few Minutes. 

If you don’t have a budget, and most people don’t, money in your pocket somehow gets spent.  So you don’t always get the most for your money.  And your money’s often not there when you need it.

When you make a budget YOU decide where your money goes.  YOU decide where to get the most for your money, and how to have the money you need when you need it.

If you don’t have a budget, use our Figure Out a Budget in 3 Minutes to make a basic budget. And a basic budget is all most people need.

Use One Account for Everyday Spending

So You Can See What You're Spending

Have all your everyday spending flow through one account – one account that you can watch – to track how much you’re spending and what you’re buying.

  • One bank checking account is best.
  • If you use credit cards, use just one.  And pay the balance in full each month out of your one checking account.
  • If you don’t have a checking account, use a shoe box or envelopes to keep track of your cash.  But think about getting a bank checking account, as it’s usually the easiest way to track your spending.

Set a Weekly Spending Limit

Pace Your Spending

Income flows in when you get your paycheck.  It flows out on fixed expenses – like the mortgage, rent, car payments, and utility bills; on saving to cover occasional expenses, such as car repairs, and to meet your savings goals; and on spending you control.

It’s hard to cut fixed expenses.  You need to save for those occasional expenses and to meet your goals.  So making ends meet generally means keeping spending you control below what’s left.  To do that:

  • First save and pay your fixed expenses, using How to Move Money From Spending to Saving.  What’s left, the spending you control, is usually less than half your take-home-pay.
  • What’s left is mostly weekly spending – spending on groceries, gas, entertainment, and eating out.
  • So figure your weekly spending speed limit: how much you can spend each week.
  • If you need to cut back, use our Figure Out Where to Cut Back Your Spending.

Know How Fast You're Spending

So You Can Adjust & Stay On-Track

  •  A debit card, which draws money out of your one checking account, is a great spending speedometer.  As you spend, it tells you what’s left in your account.  You could also use an ATM, which is useful if you buy a lot with cash drawn out of an ATM.
  • If you use credit cards, you can check on-line to see how much you’ve spent.  But it’s much less convenient.  And if you also use checks, a debit card, or ATMs, it’s hard to know if your spending is on-track or not.

Know What You're Buying

Review Your Statements to Cut Waste & Stay On-Budget

Your checking account statement tells you how much you spent and where.  Take a few minutes each month to see what you spend on groceries, entertainment, eating out, and the like. You’ll probably find some unwise spending.  If you have a budget, or want to cut spending on specific items, you’ll know if you’re hitting your spending targets.

  • If you often pay with cash, keep your receipts in ONE envelope, or set of envelopes with labels.  At the end of the month you can see where that money goes.
  • If you use credit cards, you’ll have to monitor those statements too.
  • Some banks and credit card companies will categorize your spending.  These systems need some up-front set-up time, but save lots of time in the long-run.  Some on-line services do this as well – combine your spending from different credit card and checking accounts.

Get It Done

Nothing Happens Unless You Make it Happen

Getting your Everyday Spending under control is the first task in getting your finances in order.  But Making Ends Meet over the long term also requires saving for the future and having adequate reserves and insurance.

To Make Ends Meet in the near term, print out this How-To and put  reminders in your calendar to help you move from How-To to Done!

Then use other tools on this site to Make Ends Meet over the long term.

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