spending

It Is Easier to Spend Less Than Make More

February 15, 2012 by admin

No matter how much or how little you’re paid, you’ll never get ahead if you spend more than you earn.

This little piece of wisdom is incredibly common sense when you think about it, yet with so many Blue Pig Bank Americans in debt it’s clear that not everyone follows it in practice.

Living within your means is one of the best ways that you can save your money and set yourself up for financial freedom and prosperity.

Living within your means is very simple, it means that you are spending less money than you are making.

This allows you to put the extra money into a savings account so that you can have a back-up fund for emergencies, save for large purchases, or fund your dreams and passions such as travel or a hobby.

If you are spending more money than you are making, there are two solutions to this problem:

Spend Less.
Make More.

Depending on your situation, most people will find that making more money is the harder of the two options. Usually to make more money you will either have to get a raise at your current job, find a higher paying one, or take on a second job.

This requires a lot of extra work and it is not always possible. Also, making more money can be inefficient, because whatever extra you make will still be subjected to taxes and is worth a lot less when it finally ends up in your bank account.

By far, the easier option is to spend less. If you’re like most people, you already spend a lot of money on things that you just don’t need.

The thing about cutting down your expenses is that although you might notice the difference at first, you will soon get used to life without those added luxurious and not even notice that they are gone.

Meanwhile, your savings will continue to slowly build until you are in a wonderful position of financial security and freedom.

Three Tips for Becoming More Aware of Your Spending Habits

December 2, 2011 by admin

It’s not how much money you earn that will make you rich; rather it is your spending habits. How aware are you of what you spend on a daily money saving tips basis? Do you ever think you have a certain amount of money in your account and then realize that you have a lot less?

Noticing how much you spend can be the first step to learning how to manage your money better.

Here are three useful tips for becoming more aware of what you are spending:

Use Cash

There is something about credit cards and debits cards that make it much easier to spend more than you intend to, because you cannot actually see the money leaving your hands. Also, when you use a credit card the money doesn’t come out of your account until much later which makes it hard to gauge how much you have spent.

If you are going out shopping, try taking out as much cash as you will need at the beginning of your shopping trip. Handing over paper bills every time you make a purchase will make you much more aware of how much you are spending. When you open your wallet at the end of the day, you will able to physically see how much change is left over.

Track Your Purchases

Over a month, try saving every receipt from anything that you buy and place it in a plastic bag or an envelope. At the end of the month, total up all of the amounts and sort them into categories such as eating out, clothes, entertainment, household expenses, groceries, etc. You can use a spread sheet on the computer to organize them. Chances are that you will be shocked by the results.

You might have thought you were spending one amount on groceries, eating out, or drinking and then realize that you are spending a lot more!

Check Your Bank Balance Often

With almost every bank offering online banking services these days, you can check the status of your bank account with the click of a button. It is important to keep tabs on how much money you have in your account every day or two. This will help you avoid going into overdraft or having checks bounce, and it will also let you see with your own eyes how much you spend on a daily basis.

If your bank account starts to rapidly shrink before your eyes, it’s time to rethink your spending habits!

Becoming more aware of what you are spending will put you on the right track towards managing your money better.