If you habitually discover that the amount you spend each month is more than what your income can support, this article is for you. These three steps will help you recognize those areas that can be trimmed back, giving you more control over your finances and an opportunity to begin a savings account.
No matter what your current financial situation is, it can always be improved by one basic step ... making a budget. This step is critical before you try to go further in the financial management process. Without a budget, you don't know exactly how much money you have available to spend, or whether that amount is enough to meet your planned expenses. Without a budget, you might think you know approximately how much money you have, and you might be hopeful that you have enough to cover your bills. But you don't know exactly. That lack of knowledge is what causes many people to have problems controlling their finances. Once you create a detailed budget, you'll be able to take further steps to bring your finances under control.
The second step is to review your budget after you've kept it for a month, looking specifically at where you spent your money. You might be surprised, since often people spend more money on unnecessary items than they realize. By reviewing your expenses that you made during the previous month, you can be more aware of your 'weak' spots, the things you buy that drain your money, leaving you with less on hand to pay your bills or contribute to a savings account.
The third step you can take in controlling your finances is to consider making small changes in your financial decisions that can have significant, cumulative, positive effects on your bottom line. Take a close look at each expense, and ask yourself if there is a way to trim it back. You won't need to eliminate your favorite things from your life, simply trim them back.
For example, if you like eating out, but find that your tab for the meal somehow seems higher than you planned on spending, try this tip. Eat an 'appetizer' at home before you go to the restaurant. A small plate of crackers and cheese, or a small bowl of soup, or a plate of carrot sticks and hummus dip. Eating the appetizer course at home will cost you pennies compared with the dollars it would cost you at the restaurant, but won't detract from your ability to enjoy the entree course at the restaurant.
Another example of 'trimming' the cost, is to reduce your purchases at the concession stand when you attend a sporting event. You might choose to only have one soda, and pass on the ice cream bar. The idea is to simply reduce the amount you spend on the 'extras', not eliminate them completely.
As the pointers in this article have shown, you can gain control of your financial situation in three steps. Budget. Examine expenditures. Trim back on the 'extras'. You can do this without making a major change to your lifestyle, and you can even find the funds to start a savings account!