Tracking your spending is a way to take control of your money. Knowing where your money goes can help you spend less and save more.
Get an overview of your spending
The first way to take control of your money is to get a clear view of where it's going day to day. So, get ready to look through your bank transactions for the past few months and go through them line by line.
Start small by looking through your spending every day for a couple of weeks. This will give you an idea of all the little regular costs going out.
You'll have some weeks or months with bigger expenses though, like insurance premiums or utilities bills. So, make sure you look at your transactions across a few months.
Once you feel confident that you know what you spend your money on, have a go at doing a budget. This can be a great written record of what you earn and what you spend your money on.
Set up your budget and save it online
Look at your spending habits
Don't worry about changing your spending habits straight away. Just record day by day to start with.
To stay motivated, try tracking your spending with a partner or friend.
At the end of your tracking period, look at your recorded transactions to see where your money is going.
It may surprise you how much small things can add up. You could also discover hidden costs. For example, account fees, subscriptions you don't use anymore, or mistaken transactions.
You might find that, just by being more aware of your spending, you can start to spend less.
If you want to spend more mindfully, try taking a moment before you buy something. Ask yourself: Do I need this right now? Can I get it cheaper somewhere else? This helps you be in control of your spending choices.
Change your spending habits
Now you know where your money goes, making small changes can make a big difference. You don't have to do everything at once — pick one spending habit to start with.
Separate needs from wants
Look at all your transactions and highlight what are 'needs' — essential items you need to live.
The ones left over are 'wants'. These are the things you could cut back on or live without for a while, to save money. Is there anything you would like to change?
Find a quick win
Cancel anything you don’t need, like a subscription or membership you’re no longer using. Or try cutting back on one small, frequent expense, like takeaway food.
See simple ways to save money for more ideas.
Set limits and reminders
Knowing how much you spend on wants, try setting a realistic limit for the next week or month. This can help you avoid overspending.
Set calendar reminders for when regular expenses are due. Then put aside money to cover these payments.
With any money you manage to save, you can put it aside for the things that matter most. Learn what to look for when you choose a savings account.