Smart Money Extra

If you don’t have as much money as you think you should at the end of the month, there is a good chance that you have some undiagnosed spending problems. No, this is not a medical condition I am talking about. Almost everyone has issues of spending money on a monthly basis with no idea where it really goes. To be truly in control of your money, you need to know where every little bit of your money goes. Here are some tips that will help you identify your spending problems.

Keep at all your receipts
Almost everyone who is in a solid financial position keeps all their receipts. Not only is it a good way to keep track of your spending, it helps you stay accountable for the things you spend as well. Whenever you purchase something or spend any money, keep the receipt.

Be conscious of where you spend your money
Almost everyone has one place where they spend money but do not know it. For some people, it’s the grocery store, for others, it’s the liquor store. All the little purchases that you make which you don’t think cost much all add up at the end of the month.

Balance the books at the end of the month
At the end of every month, take all your receipts and balance your income and what you have paid out. At the end of this process, you should know where every little bit of money you spent went.

Believe it or not, most people would not be in the financial situation they are in right now if they could just follow a few simple money management tips. If you adhere to the following three tips, it is extremely difficult to find yourself in a poor financial position.

Don’t spend more than you make
This should be common sense, but too many people don’t follow it. Don’t spend more money than you make, plain and simple. Too many people live off their credit card and end up going broke and claiming bankruptcy because of their extravagant lifestyle. This is easily avoided if you just live within your means and don’t spend more than you make.

Only borrow money for non-depreciating assets
Most people borrow money and go into debt for silly things. A good piece of advice is to only go into debt for non-depreciating assets like a house. This way, you are never just throwing money away.

Record what you spend
Finally, record everything that you spend. Not only will this give you information on what you spend at the end of every month, it will make you feel more accountable when you make purchases and you will think twice about what you buy.

As long as you don’t spend more money than you make, only borrow money for certain things, and record all your expenses, you will have no trouble staying in good financial health and not falling into the debt trap that many people become a victim of.