When it comes to your finances if you knew better, you’d do better, right? If you feel like your money is disappearing and can’t figure out why it’s probably because you’re not paying attention. Interest, fees, and mindless spending are usually to blame. Doing a quick self-assessment and making small changes to your spending habits can help keep your money where you want it to be.
Pay Attention to Interest
Ideally, you should be paying off your balance each month, but that doesn’t always happen. Take a good hard look at your credit card statement. How much have you spent on interest in the last 3, 6, or 12 months? You need to know how much of your monthly payments are going towards the outstanding balances on your credit cards. For those who often carry a balance, you’ll want to consider a balance transfer to a lower rate credit card.
Have Appropriate Account Plans
Account fees can be a silent killer when it comes to your checking and savings accounts. The best practice would be to periodically compare your bank’s account plans to make sure you’re getting the best deal. If you’re going over your transaction allowance every month, it may be time to upgrade your account by paying $5 more a month for unlimited transactions rather than paying $15 a month for 15 excess transactions. As for savings accounts, get your bank to work for you, your bank may offer multiple products with varying minimum balance requirements for earning interest. Find out how you can earn more interest on your existing savings and what account plan would work best for you.
Spend Cash OR Use your Debit Card
How do you like to spend your money? If you’re someone who finds cash easier to track, withdraw your spending money on your payday and stick to an allowance for that pay period. Some people find that spending cash gives them a clearer picture of how much they have spent compared to their budget. When you use your debit card for small purchases it is often harder to track your spending immediately, so consider hiding your debit card so it is less accessible. Simply slip it behind another card in your wallet to make it less visible and harder to take out. For those that prefer their cards, organize your accounts and set up automatic transfers to keep your spending money separate. If you’re enrolled in online banking, many larger banks have free finance and budgeting tools built into their online service to help you visualize where your money is going.
Following the 3 easy steps in this article can help you cut down on your unintentional spending. Do you have any additional tips on how to track unseen spending? Share them below.