For most of us, there are some many things we covet: a new pair of shoes, a new purse, a new car, a new house. There are also things we need like groceries, toiletries, rent, etc. What will you be spending your money on in the next few weeks, months, or the next year? For both scenarios, you have to save to spend.
The first step to any goal is to put it in writing. Then, you can create a spending plan to give yourself enough money to meet your everyday expenses while, at the same time, help you save for your goals.
Here are Steps to Smart Saving and Spending
1. Get a true picture of how you spend your money. It’s really important for you to realize how you spend your money. For two weeks, save all receipts and track all your purchases with your cell phone. After the two weeks have passed, group your expenses into categories such as food, transportation, entertainment, clothing, gifts, etc. Figure out how much you are spending each week, month and year on all categories.
2. Make a list of all your income. Make a list of all the money you are earning from jobs, gifts, or other sources. Calculate what you make each week, month and year.
3. Evaluate your situation. Do your income and expenses even out or are you spending more than you are making? Do you have money to save? Do you have money to spare?
4. Create a spending and savings plan. Figure out how much you need to save each month to reach your goals (ie: that new house) and how much you need to spend on necessities (ie: groceries). Once you have an accurate number, create a plan for yourself. Look for easy ways to save, like bagging your lunch or cutting back on your entertainment and clothing.
Remember, once you reach a goal, review your plan and tailor it to fit your next savings goal!