1. Know Where Your Money is Going
People with financial difficulties are predominantly impulse buyers. One ten dollar impulse purchase isn’t a huge deal, but if you are going ten dollars over budget every day, it will add up quickly. For the next couple of weeks, write down every purchase you make. If seeing how much you spent gives you sticker shock, you are an impulse spender. Simply becoming aware of any bad spending habits will help you curb them.
2. Have a Plan
As you allocate your daily allowance, keep your long-term goals in mind. Are you trying to get out of debt, save money for your child to go to college, or save for retirement? The way to reach these long-term goals is to take small steps every day toward reaching them.
3. Have Multiple Bank Accounts
If you are like most people, you pay for the majority of your purchases with your bank or debit card. While electronic payments are convenient, they also make it easier for someone to steal your information. One way to minimize your risk is to separate your money into different accounts; one for personal use, and one for everyday expenses. Only keep a few hundred dollars maximum in the account that you are exposing to the outside world. That way, most of your money will be safe even if someone gets a hold of your payment information. Identity fraud is another important reason to keep close tabs on your spending. Many identity thieves will only withdraw small quantities from your account at a time, slowly sucking money from your account like leaches. They can get away with it because so many people have no idea how much they spend every day and don’t question small withdrawals. If you know exactly where every dollar goes, you will be able to prevent this from happening to you.