Saving money isn’t easy.
It doesn’t matter how small or large your income, there is always something you can spend your hard-earned cash on.
And putting it aside for a rainy day doesn’t come naturally to a lot of us.
Which is why I’m going to suggest you keep a diary.
Write it down
A spending diary might seem like something you would ask a child to do as part of a homework assignment on money management.
But actually it can teach you an awful lot, no matter how old you are.
Last year The Telegraph asked six people to keep track of what they spent in a little notebook.
The investigation included a cross-section of British households who revealed their salaries, and their candid two-week spending diaries.
One mum spent a whopping £900 a month on childcare – more than her mortgage repayments. A young city worker discovered he spent nearly £50 a month on lattes.
The technique was not just simple – it was powerful.
A real eye opener on how and where you can save.
You can see the results here - http://www.telegraph.co.uk/finance/personalfinance/how-budget-affect-me/11465012/How-do-you-spend-your-money-We-asked-six-people-to-keep-a-spending-diary.html
How to do it
Buy yourself a small notebook and keep it with you wherever you go.
When you make a purchase you record it, no matter how big or small, whatever method you use to pay for it and irrespective of where you make the transaction.
Ideally do it for a whole month but if this proves tricky, a fortnight will be sufficient to show you where you splash the cash.
Once you have identified the luxuries you can live without, you can see how to save.
A very simple example is the £4 cup of coffee that you pick up every morning before work. You probably think £4 per day isn’t a great deal of money. And it isn’t really.
But then consider how this adds up.
Four pounds a day is £20 a week. Twenty pounds a week is more than £1,000 a year.
And all it takes to save that £1,000 is to make your morning cuppa at home.
Apply it to your business
Accountants use spending diaries as a way to monitor business finances.
It’s not quite as simple as jotting down your cappuccinos on a daily basis but the principles are the same.
The main difference is that they call it bookkeeping.
The value in keeping on top of incomes and outgoings means you have a wealth of information on exactly what has been happening in your business. And with that information you can see where to make cut backs.
Improved margins mean improved profits and this results in a growing business.
For help managing your money, contact us today