Do you keep a spending diary?
Downsizing has been all consuming for us this last 18 months or so but it has been the easiest way for us to cut our outgoings. With that area tackled I have recently begun to keep a spending diary. I used to have a vague idea of how much I spent on different things but could never accurately prove this. Since moving house in June I have kept a spending diary and it has been such a revelation. Many of the things I have to spend money on vary from month to month and therefore unless I record these expenses I cannot set a realistic budget for them.
1. Find a nice notebook, pen and calculator. You could do this using technology of course but I prefer to physically write it down.
2. Record all expenses DAILY. Keep your spending diary in the same place and try and write down money spent as soon as you get home. Jot down the amount spent, shop purchased and item.
3. Note every last penny spent. Even small amounts like 90p for a parking ticket add up.
4. If you don't spend any money that day record as: 'No spend day'.
5. If you are trying to keep within a set budget (for example, food shopping) note expenditure as - and money left as +
6. At the end of each month tot up expenditure for different areas - e.g., food, clothes, birthdays, petrol (I record this information in a separate notebook).
As the months progress you will begin to see patterns and averages in your expenditure and this will help you with future budgeting. I have found that the amount I am budgeting for food is realistic and achievable but there are other areas where I am still overspending.
The only way to live within you means and monitor any sort of progress is to focus on your spending and be accountable to yourself. If you want to control your spending monitor it daily. You will find that by recording this minutiae you will become more mindful of your spending and discover where your surplus (?) money goes.