A couple of people have messaged me saying that they can’t live on their income and don’t know what to do. I asked them if they tracked their spending but neither of them knew what I meant.
Every now and again I track my spending. I track every penny that goes out that month to see where my money is going. It takes effort but I carry a small notebook in my bag and write every thing I spend down. There are budget apps that you can use if you are more technically minded. I make sure that I transfer my notes to a big book each night which is like my balance sheet or ledger. I also add my direct debits. The big book has any income I have coming in added also. This might be my pension, things sold on FB market place, any freelance work etc. I then knock off my spending each day. I usually do it whilst I am waiting in the kitchen for the pasta to cook, or the kettle to boil or something. It only takes 5 or 10 minutes, and by doing it whilst I am waiting, it doesn’t feel like it is eating into my day, or is a chore I have to sit down and do.
It is important to write every penny, even the 40p sweets you bought the grandchild, or the £1 you gave the homeless guy.
At the end of the month I am able to see if my outgoings are more than my income and see what I am spending my money on. I can then assess whether I need to make cut backs, or earn more money.
I probably do this about 3 times a year, or if I seem to be spending more than I am earning. This helps me stay on track with my budget. I also look at my budget each month and tweak it as every month is different. Some months I have more outgoings than others because of holidays, birthdays etc. I do have savings for those as I put a bit by each month, but try not to use my savings unless I need to. Do you track your spending? When times are hard it is a good habit to get into.