I have already addressed this issue at more length in another post but I feel it’s important enough that it should be in the Saving Tip Series as well. If you don’t know your spending habits its extremely hard to save any money. For example if you think you spend $50 a week on eating out, but in reality it’s closer to $100, then you aren’t budgeting accurately. Also once you know where you’re spending your money you can review this spending and try making corrections to either your budget or your spending.
When I started keeping a log of my money I quickly realized that the $100 I was assigning in my budget for miscellaneous expenses such as smokes, the odd transit fare, books, essentially odds and ends that the budgeted money was far below what I was spending. But not only did I learn this but I also learnt that I was spending a very significant chunk of my budget on smokes. This is just one thing that I noticed, keeping this log helped me realized excessive spending in a few locations including food and entertainment. Needless to say I’ve managed to cut back on a few things and tweak my budget to accommodate some of these things. I have more control over my spending as a result.
Even though this isn’t a tip to save money, knowing how and where you spend your money will allow you to have better control over your money.