Have you ever felt that you are always out of cash? That no matter how savvy you try to be, your bank account looks alarming right before next months’ paycheck? Well join the club! I have the same issue every single month! As hard as I try to cut out unnecessary purchases (those things you felt you would die without only to find them hanging in their tags the following year), or stop myself from impulse buying, I never know where my money goes.
The biggest issue I face is what am I spending on? I would go to the ATM and see my remaining balance, then no matter how hard I try to remember what I spent on, I have no clue where it went. The problem with that is my belief that it was a big purchase that took a chunk of my cash, but on the contrary, it’s the “small” purchases that I made mindlessly that are hurting my balances.
So where do you go from here? If you are a person that just wants to save more, or has a debt of thousands, the first step is to track your spending. It doesn’t have to be as complicated as filling out a page on my phone application (yes, that’s too complicated for me!), what I did was get a plastic envelope and put every receipt of purchase in it. If it doesn’t have a receipt, like at the gas station or mini mart, write on any scrap piece of paper the amount and what it was for, or even on one of the other receipts. At the end of the month, look at what you spent on and categorize each spending as either “musts”, “wants”, “impulse”, or “emergency”.
For me that was an eye opener, I spent SO MUCH on coffee!!! It was so ridiculous I was embarrassed at myself. The second biggest money drainer was entertainment for my kids, 5 KD at this play area in the mall, 10 KD at the arcade, 7 KD for toys after they played, and the list goes on! My third money drainer was home stuff, things like baking stuff, kitchen hardware, electronics and gadgets, and so on, most which are still in their boxes. None of the above were necessary buys, yet they took up more than 50% of my spending.
So where do we go from there? Realizing where your money goes is an excellent start, as well as how much you owe in debt (if you have loans or are paying installments on a car or home). Once you have the big picture you can decide how to proceed, can I do it on my own or do I have to get professional help? Whichever way you decide to go is neither right nor wrong, but you have to move in one direction.
For me, step 1 was to stop my impulse buying, which is the toughest thing for me. Working at a mall I would always wander into stores and buy things that I think will make me look amazing, only to lose interest after wearing them 2 times. It is absolutely tough! 1 trick I found works? I would take a picture of me in the top/pants/shoes and leave without buying it, then I would look at the picture the next day and see if it’s an amazing find or it lost its sparkle. If I still love it, I would go buy it.
It’s not like things have been peachy since I started doing this; events happened and I got invited to so many parties, all of which required salon and make-up appointments, but I was more comfortable knowing that I didn’t spend a lot on clothes I don’t need so I can splurge on make-up. I still slip up once in a while and impulse shop, but at least now I do it less frequently.
Now I need to learn how to save! This won’t be easy 🙂