First of all, you need to be conscious about what you’re spending on. Having a ‘spend now think later’ style of buying often leads to spending without realizing, which is a huge problem for a lot of people.
Ask yourself this “Do you know exactly where your money goes each month?” If you’re not entirely sure, then it’s time to start tracking what you spend. Do this for a couple of months, and take a good look at how you’ve spent your money.
You’ll likely be surprised at how much has gone towards frivolous and unnecessary things. Once you have this information in hand, you can start making conscious decisions and begin changing any frivolous spending habits.
If you own multiple credit cards, it’s time you rethink how many credit cards you really need and evaluate which one to keep based on benefits offered. When you’ve decided on the card(s) to keep, take advantage of the bank’s balance transfer service / balance transfer promotion to consolidate your debts from the credit cards and avoid paying fees and interests to multiple credit card issuers.
If you don’t already have a credit card and are planning to get one, choose wisely. While it’s too easy to get distracted by the gifts offered with some credit card applications, you should really do your homework and look for credit cards with rewards that suit your lifestyle and needs best such as no annual fee, cash back for some spending categories.
Some banks offer Credit Card Recommender tools to help you select the right credit card.
Now that you’ve started tracking spending, you’ll begin to notice how much it’s costing you to keep your current lifestyle for example housing loan or rent, car loan, TV subscriptions, internet subscription etc.
Look for areas where you can make changes. You could consider moving into a smaller place, you’d pay less rent, and you’d be forced to get rid of or sell all the excess things you may have been keeping.
How about subscribing to TV channels that you watch instead of all channels or reducing internet subscription from 50MBs to 30MBs? Do you have a gym membership that’s underutilized? If you do, you might want to consider using your apartment gym instead or start running outdoors.
Knowledge is power. Knowing where you constantly overspend month-on-month will allow you to make the necessary adjustments in your spending. Leverage on available apps/tools that can help you track, monitor and manage your personal finances.