In week 3, you told your money where you wanted it to go – you created a budget. At the end of each month, you will need to review your budget and compare what you estimated you would spend to what you actually spent. Hopefully, during your evaluation, you will have a surplus – that is, you would have spent less than you earned.

But the reality is, creating your budget is the easy part. Sticking to your budget is where the real work begins. You have to be mindful of how you are spending your money in order to be successful.

In week 1 you would have tracked your spending to see how much money you have going out of your household and to help you create your budget. With your budget now in place, it’s time to take a look at your spending habits again, this time to see if there are any ways that you can cut back. Cutting back on how much money you spend will not only help you stick to your budget, but also have a huge impact on your financial wellbeing. If you are able to spend less than you earn, you can put that extra money towards your financial goals or in areas to help you improve your financial position.

One of the easiest but unnoticeable ways that persons fall off of their budget is by spending small amounts of money thoughtlessly. An easy way to cut back on spending is to look at your day to day habits.  For example, if you buy $5 worth of snacks each day when you are at work, you end up spending $100 at the end of the month and $1,200 at the end of the year on snacks alone. When you really take a hard look at your spending habits, you realise that by breaking a habit, you end up keeping a lot of money in your pockets. By just breaking that habit, you have a great deal of cash to put towards one of your financial goals.

Another way you can cut back is by reviewing your bills, contracts and bank statements. Are you really using all the minutes or data on your cell phone plan? Do you watch all the channels on cable? Are you paying too much in bank fees?

Take the time to see where you can cut back this week. By doing this exercise now, you are automatically setting yourself up for success with your budget.

Do note that cutting back on spending is something that you should be doing religiously. It might be a good idea to find an app to help you automatically track your spending going forward so that you can regularly see where every penny is going.

Your prescription for Week 4:

• Take a look at your day to day spending habits, bills , contracts and banks statements to see where you can keep some money in your pockets.

• Determine what you will do with the extra money (hopefully you would put it towards one of your financial goals).

• Do some research on apps that can help you automatically track your spending. Find one that you think may work for you and try it out.

 Join us next week as we discuss how you can make saving easy.