family money saving tips and ways to save money on a tight budget
First, know your exact income and expenses. It's so important that you sit down and figure out how much income and expenses you are actually incurring every single month. So figure out a method that you can use to track this using Excel. Whatever that may be, find the method that will work best for you and sit down and track all of the income and expenses that you incur every single month. So, bring up your paycheck and see how much money you are taking home and make sure that those withholdings are correct and then take out all of your bank statements and see where you've been spending your money. Separate out your expenses and categorize where you've been spending your money. You may be a little bit surprised. It's so important that you take inventory of your finances to see where money is coming and going so that you can come up with a great savings plan.
Next, create a budget spreadsheet. Whether you like to budget on paper or in an app or even in Excel, sit down and create a budget. This way, you can see all of those spending categories in one place on a single sheet and you may be surprised to see how much you're spending in certain categories, like eating out or groceries. If you are new to budgeting, my best encouragement to you is to remember that a budget is not restrictive, but instead, it gives you permission to spend and it can take some time to get in the habit of budgeting. In fact, it can take around three months of creating a budget, tracking your expenses and adjusting every single month for you to get in the full habit of budgeting. So if for the first month doesn't turn out well and you're new to this, don't worry. Give yourself some grace and start again next month.
Next, automate whenever possible. I love using automation to make sure that all of my bills get paid on time and so we have basically all of our expenses automated, whether that is insurance, utilities, even charitable donations. By automating my expenses, I know how much I can expect to pay every month and I'm sure to never miss a payment. The only check we have to write every single month is for our rent because, unfortunately, our landlord charges additional fees for using ACH or credit card payments.
The next basic to saving money is to have daily, weekly, and monthly check-ins. Some people think that creating a budget just means to create a budget and forget about it, but truly if you want to master the art of budgeting, it's important that throughout the month that you are tracking your expenses and always checking in on your budget. It's important that you're tracking your spending throughout the month so that you could make mid month budget adjustments if needed, and that you can also ensure that all of the expenses that have come out of your account are in fact legitimate. I do this for our budget check-in every single Sunday and I will open up our big statement and Excel and update my Excel budget to what is recorded on my bank statement. I'll enter in all of the transactions we have made and add them to my budget categories so that I can see how we're doing as the month goes on. So if we're into the third week of the month and I only have $50 left in groceries, I can decide to either make really simple meals that week or maybe pull some money from my entertainment category to supplement the groceries. It's so important that you don't just set your budget and forget it, but instead go back and have regular check-ins.
And finally, know your why. Yes, saving money is so important, but you're probably not saving money just for the sake of saving money. You're saving money for a reason and that is your why. So think about why you are being so diligent with your finances to make the sacrifice for saving money, whether that is for the ability to travel more or stay home with children, sit down and think of your why. When you focus on your why, you may think twice about buying either a new pair of air pods or putting more money to your child's college education. For my husband and I, focusing on our why was so important when we were on our debt free journey as well as saving money. When we got married, we knew that we wanted to have kids someday and wanted to be able to have a house that they could play in with a yard, that was just a dream of ours. And so that has always been our encouragement and our why on our financial journey. Right now, we are working on saving heavily for a down payment on a house. So having that why and the reason why we are saving so heavily, makes that daily Starbucks purchase not really worth it for us. These are the foundations for saving money. And when you started with the basics of budgeting, tracking expenses, and obtaining a money saving mindset, you'll be ready to save money in all aspects of life.
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