Identify & Eliminate Wasteful Spending

Vincenza Vicari-Bentley, AFC

What happens to spending during periods of high inflation? There is a rise in the prices of goods and services reducing our purchasing power. It feels like you’re spending more but getting less. So how can we identify and eliminate wasteful spending to get back some of that purchasing power?

My number one strategy is to track your spending.  How do you know where you can cut back if you don’t know where your money is going? If you don't yet have a monthly budget, create one this month. Another reason it’s important to track your spending is to become more aware of your spending habits. If you don’t know where your money is going, you won’t be able to recognize negative spending behaviors that you can easily change to make your money work for you.

For example, you might learn from tracking your expenses that you are paying monthly for a service you don't use (like a subscription), in which case you could eliminate it or switch to a cheaper one. Or, you might realize that your habit of dining out is costing you a lot more than you thought. 

How to track expenses? You can be low-tech and use a notebook or you can use a budgeting app or software - and there are a lot of free ones out there! It may seem like a lot of work to keep tabs on your expenses. If you’re not used to doing this start slow and just track your food spending for a week.

Understanding why and how to track spending with just a little effort can help you successfully establish a new habit. This new habit can lead to increased spending awareness and eliminate wasteful spending habits. Everyone could benefit from scrutinizing a bit more where our hard earned money goes!