Tips for Tracking and Saving Money

To achieve financial success, you must be able to track and save your money. In fact, good money management skills depend on the smart financial habits you make, whether you actively budget your money or not.

Having a clear understanding of your financial goals and spending habits is essential, and tracking your money and finding ways to adjust your finances according to your goals should be a priority. If you need help changing your financial behavior and future, then read this advice on how you can track and save your money.

Learn About Establishing an Emergency Savings Fund

You need to consider your financial priorities. These will be unique for everyone as everyone spends and saves differently, but some basic budgeting elements, such as an emergency savings fund, should be present in everyone’s financial priorities. Your emergency savings refers to the money you and your dependents would survive on if your current income was terminated for any reason. In your budget, you are encouraged to allot three to six months of your total living expenses into your emergency fund. If you have no money saved in an emergency fund, then you are advised to begin with a goal of adding at least one month of your living expenses to your emergency fund. However, recommended estimates for savings funds may vary based on your financial situation.

Various methods can be used to ensure you obtain enough money in your emergency savings funds. Though, you always want to make sure you create a realistic timeline for each deposit, which should be determined by the remaining funds you have after you pay all your necessary expenses each month. Opening a separate bank account for your emergency savings fund can help you maintain your financial goals. Still, if you can only manage to deposit a small amount into this account, you can think about other creative ways to directly deposit money into your emergency savings fund. For example, tax refunds and work bonuses can go straight into your emergency fund.

Easy Tips for Saving Money Every Day

Saving money can be easier, if you have the right tips and tricks to help you. These tips can help you save money on daily or large purchases, but only if you know your financial situation. If you do not, then review your financial information to better understand your financial well-being or limitations.

The first tip involves cutting back on using your credit card for purchase. Using cash allows you to see exactly how much money you are spending without having to pay off a balance later. Additionally, you are less likely to overdraw your credit account if you are more aware of your financial assets, like cash. However, if you choose to continue using a credit card, then you may benefit from automating payments and applying awards points given to you for paying down your balance on time. The points may even be transferable.

The second tip encourages you to cancel some digital and paper subscriptions you may not be using. The third tip is for homeowners, specifically those with mortgages. They may refinance their mortgages to make payments more affordable or to pay down their mortgage quicker. Finally, if you are really struggling to find extra spending money, or money to add to your savings or financial goals, then getting a second job may be advisable. A part-time position can offer you flexible hours and a regular paycheck.

How to Develop Better Money Habits

The way you deal with money and budgeting affects your ability to save and track your money. Adjusting your money habits, including your spending and saving behaviors, can help you meet your short-term and long-term financial goals. Additionally, it can permanently change the way you manage your funds. Good money habits are outlined below:

  • Investing in yourself. After paying off the necessities, investing in yourself should be the first thing you do. You may want to put your money in a high-interest-yielding savings account or invest it properly.
  • Avoiding frivolous spending. Do not spend all your money on entertainment or food.
  • Budgeting with actual numbers. Aiming for an actual number can make budgeting seem more feasible.
  • Limiting costly behaviors. Eating out, driving to nearby destinations and partying can be expensive. Try to limit these activities when you can.
  • Believing that you deserve money. If you do not believe you deserve money, then you may not receive it. Act like you can handle larger sums of money, and then do it.

Courses held online or in-person can be great if you are still unsure about how to change your money habits. Courses can discuss what makes some habits harmful to your financial well-being and suggest alternative actions you can do to save money and start working towards your personal financial goals. Developing better money habits gives you the opportunity to contribute to your financial independence and discover ways you may not have been contributing beforehand.  

Learn About Ways to Track Your Spending

Tracking your spending is the only way to estimate how much you should be budgeting. Tracking methods include the following:

  • Traditional tracking methods. You can write down all your purchases in a notebook or excel spreadsheet or utilize the pre-budgeting method involving putting cash into envelopes for different spending purposes before you make a purchase.
  • Technological tracking methods. If you already use credit and debit cards to make most of your purchases, whether online or in-person, then you can simply download your banking activity as needed from your account. Additionally, financial tracking apps can help monitor your spending and even offer you helpful suggestions on how to improve your financial situation based on the information you provide.
  • Professional tracking methods. Professional finance consultants or finances courses may be great if you feel like you need more personalized and formal assistance with your financial tracking. While this method is not free, it might be the best way for you to ensure your finances are in order.

How to Develop Better Money Habits

Long-term financial success depends on good money management habits. While there are plenty of tips and quick fixes designed to save you money, they cannot ensure your financial well-being indefinitely.

Instead, you need to change the way you handle your finances directly. The following sections explain how you can develop your money management habits.

Tip 1: Have a Financial Plan

If you create a budget, or financial plan, for your future, you are more likely to complete your financial goals. Studies have revealed that clear, specific financial plans are great tools for anyone to use. To start planning, you should consider the next five years of your life and your financial expectations for it. The following aspects of your finances should be considered in your five-year financial plan:

  • Your desired income
  • Your anticipated expenses
  • Your investment goals
  • Your savings goals

Writing down your plan on paper or a computer can help you visualize what your long-term goals can realistically be. Because you may have to sacrifice a few smaller goals to achieve your long-term goals, make sure you are satisfied with your goals. Posting your financial plan on your wall or placing it on your desk where it is visible to you can remind you that you are working towards a financial goal.

Tip 2: Invest

Although investing may seem like something reserved for rich eccentrics, you can start investing in your financial future right now, and it can be as simple or involved as you want it to be. If you are starting with no existing investments, then you are advised to begin investing in yourself. This means allocating funds for an emergency savings account, adding to your employer-sponsored retirement plan or budgeting to further your professional education. In short, you do not need to master the stocks to reap the rewards of investing.

However, if you feel comfortable with your savings accounts and want to delve into the investing market, you can consider long-term savings options like stocks and bonds that allow you to invest on your schedule and budget. You decide when and how often you can put money towards these types of investments. A common way to add to your investments is to add all of your spare change to your investment account or to round up purchases and put the difference into your account.

Tip 3: Regulate Your Purchases

Overlooking small expenses is a common mistake that savers make when tracking their finances. Though, if you start to notice that your everyday purchases are adding up to a significant amount, you should consider cutting some expenses altogether. For example, buying a daily cup of coffee from your local cafe can cost you up to $150 per month. Remember to only cut purchases that are costing you more than they are worth.

Tip 4: Believe in Yourself

When you believe in yourself, you will be able to better handle the money you own and accept the extra money that comes your way. To become wealthier, you must behave as though you are ready for wealth, and you must believe that you deserve the wealth you have and earn. Demonstrating confidence and maturity is important when dealing with important financial matters, so believing in yourself can make a huge difference.

Tip 5: Surround Yourself with Successful People

Just like believing in yourself can affect your confidence and ability to manage money, being around people who are good with finances can impact you greatly. If the people around you are motivated to save, spend less and invest in themselves, then you are likely to do the same. Some studies have even shown that surrounding yourself with successful people can encourage you to take advantage of opportunities you may not have otherwise. Having a healthy social network is essential to achieving financial stability, opening your mind to new ideas and improving your mood. You should seek out relationships with people who you admire and aspire to be like.

Tip 6: Pay off High-Interest Debt

If you have high-interest debt due to credit card bills, student loans or other reasons, you should prioritize paying off that debt before saving or investing your money. Avoiding paying off debt can result in compounded interest and longer payment periods. You are advised to pay off any outstanding high-interest debt you may have before making a financial plan devoted to saving for your other financial goals.

Tip 7: Save Bonuses

Maybe you receive a bonus at work, a big tax return, lottery winnings or any other money that you had not expected to get. While it is tempting to spend the sums of money on a nice night out or a concert happening this weekend, save the money. Add the bonus funds to your emergency savings or investment account or use it to pay off your debt. Keeping the money for later use will make it go farther than a one-time event ever will.  

Tip 8: Cook at Home

As a general rule, you should not be spending more than 30 percent of your income on eating out or take-out food. While everyone may have different lifestyles and eating habits, it is unwise and unhealthy to eat outside of the home that often and to spend a significant portion of your total income on food at restaurants. Consider how often you want, and have time, to prepare meals at home, and then create a realistic goal for yourself. Perhaps you will strive to eat out only three times per month, or maybe you will limit your eating out by cost.

Tip 9: Educate Yourself

The internet is a great source of information, if you know where to look, and free online classes are becoming available in more and more subjects. You may even start earning credits towards your bachelor’s or master’s degree while learning about finances and how to secure a financially stable future for yourself and your family. After determining the status of your finances by collecting your financial documents and calculating your available budget, consider enrolling in a finance course to learn the best money management or investment practices for you.