Jun

Money Saving Tips: Creating a Spending Diary

By emily

Are you the type of person who is a savvy money manager? Or do you usually find yourself barely surviving until your next paycheck arrives? If you fall under the latter category, now is as good a time as any to open a online savings account for yourself and seriously start saving money.

You’ll never know what financial emergencies you might encounter along the way – which is why it helps to establish a savings account. This is a secure way of saving money in a bank, with the added bonus of earning a particular percentage of interest for the amount that you will deposit.

Saving Money 101: Taking Control of Your Spending with a Spending Diary

If you’re like the average person, there would be a lot of instances when, after withdrawing $100 from the ATM machine, you will wonder where all the money went about a day later.

This normally happens when your not keeping a good track on your spending patterns. This is a bad idea if you are dedicated about building your savings account that you have opened.

So what’s the best way that you can use to get a head start with saving money? You can do it the old-fashioned way: by creating a spending diary, keeping track of your spending habits and adding money to your savings account so that you can start saving money.

Basically, the spending diary will allow you to monitor the ins and outs of your finances and keep track of your savings account and saving money habits. Going back to the example mentioned earlier – if you did take out $100 from your savings account through an ATM machine, you will see where that amount actually went.

After withdrawing the money, write down on your spending diary which items you bought with that $100. Did you spend it to buy coffee or a magazine on your way to work? Did you use it to buy food? Or did you have an ‘attack’ on your conscience and you actually put that amount towards your savings account?

If you’d rather not use cash then try a debit card such as Visa debit and then cross check your spending via your online banking.

Once you have developed the habit of writing down on your spending diary the ins and outs of your finances, you will be able to see which aspects of your spending you can actually cut back on. If you see that you’re spending too much on eating breakfast outside of the house on your way to work, you may want to pack a hearty sandwich for yourself. Better yet, wake up earlier and enjoy the financial and health benefits of eating a nutritious breakfast at home.
You might be surprised at just how faster you will be able to save money and actually add funds to your savings account once you are already keeping a spending diary. This way, you will be able to determine which purchases are wasteful and which ones should be once-in-a-while indulgences.

In addition, your savings account will be given a boost because the money that you will be able to save from the unnecessary purchases can go towards saving money instead. It might be a bit tedious and difficult at first to keep a spending diary. However, once you have gotten used to the notion of keeping tabs of your spending, saving money will be much more instinctive and less of a burden or a chore for you.

Post by Richard Greenwood who runs a number of sites to help consumers compare credit cards and other financial products and then apply online.

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