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Chris Bell

Tips for Controlling Personal Expenditure



Getting your spending habits under control can be an enormous struggle. If it was easy – after all – we’d see fewer people spending all day worrying about their financial problems.

For the less organized individual, learning to budget in detail can be frustrating and time-consuming. For the less disciplined individual, meanwhile, it giving up certain spending habits that proves to be the most difficult part.

The reward is the confidence of knowing you have a financial safety net – and that’s worth every bit of initial effort you have to put into the transitioning phase from reckless spender to savvy saver.

Identifying Cost-Cutting Solutions

The first, and most essential, action you should take in becoming a better saver is identify where you are spending unnecessary amounts of money. Find cheaper alternatives to the products you regularly buy. Perhaps you feel strongly about buying a high quality hand soap, but maybe it wouldn’t make a difference if you opt for the cheapest brand of sugar? Identifying your priorities in this way will help you be a smarter spender, and could save you up to $300 per month.

Could you be more efficient with your spending by planning ahead? The answer, for everyone, is invariably ‘yes’. Buy multi-packs of everyday product that you always need in the home – such as milk, kitchen sponges and shampoo. Buy products online if there’s a significant price difference. Products ranging from perfumes to bed sheets can be up to 40% cheaper online.

Planning ahead might also mean predicting when unnecessary costs might occur and seeking to prevent them in advance. Bringing a packed lunch to work so you avoid having to eat out is an example of this.

Start taking coupons seriously. Pay attention to anything which could save you a few dollars or give you a discount. Look out for special offers and take advantage of loyalty schemes at the stores you regularly shop at. Perhaps you could save some money just by being patient. You may want that winter jacket right now, but if you’ve got a couple of months until it starts to get cold then wait for a few weeks to see if the price gets reduced or – better yet – there’s a sale.

Different Bank Accounts

Lumping all your money together is a big mistake. If all your money is in the same account, then you’ll look at all of your money in the same way. There needs to be a clear differentiation between what you are saving and what you are allowed to spend each month.

The best way to do this is to set up at least two separate bank accounts. To be even more organized, have a ‘temporary savings account’. This is very different from the account in which you would save money for retirement or your kid’s college funds…

Rather, this is an account for unpredicted costs that may arise in the future. Vet bills, plumbing problems, car issues – life has a habit of throwing unpleasant expenses at us when we least expect them. Having a backup account for the expenses that you can’t budget for is practical and will give you peace of mind too.

Effective Budget Templates

Clearly, some form of spread sheet or list should be used in making your budget more concrete. The type of budget you choose should depend on your earnings, spending and saving habits, and deciding on the right format for you could make all the difference.

Cost and Earning Estimations

Following on from that, it’s important that the actual cost estimations you outline in your budget are as realistic as possible. For those who can’t predict their earnings because they have an unstable in come, it is especially important to be realistic in predictions.

Unstable income can be a real nuisance to budget with for that exact reason – such a budget requires insight that can only come from experience. It also requires extra discipline and planning that extends beyond each month to cover an entire year.

Take poker bankroll management, for example. A poker player may win $15,000 from one game after a dry spell and understandably be tempted to spend a lot of it in one go. However if this poker player knows from past experience that he or she might only win that amount of money twice each year, then that helps put their earnings into perspective. While $15,000 certainly seems like a big lump of money when suddenly received all at once, that could likely be their only earnings for the next six months.

Similarly, a musician with a well-paying gig booked at the end of the month may not worry about spending a little more frivolously than usual because of the cash they know they will soon be earning. If the musician knows from experience that there’s a chance the gig could be cancelled, however, then he or she will spend differently.

So consider how your earnings may fluctuate depending on factors such as seasonal trends, cancellations, potential illness on your part or anything else unique to your particular job.

A sensible action to take is to figure out the absolute minimum income you could survive on each month, then determine whether the minimum income you could earn from your commission or consultation-based job each month will cover those lifestyle necessities. Should that not be the case, you should be considering how to go about improving your financial safety net, which could mean putting more savings aside, finding an extra source of income or completely switching jobs.

Though this is far from an exhaustive list of tips on how to be a more organized and efficient saver, it should help put you in the mind-set needed to take control of your spending habits. Don’t expect to never make mistakes along the way (you can account for those in your budgeting) but above all don’t be dissuaded by the initial effort of it all. Having a real sense of control over your spending is truly rewarding – and not just financially.


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