Bookkeeping Tips to Help You Save for Holidays ·
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Accounting and bookkeeping rightly belong in the realms of business, but not exclusively. The skills and applications needed cross into personal finance too. Whether you’re in business or not, money management plays a big role in financial wellbeing, so we’ve put together some solid tips for everyone trying to save money.
Take Your Cue from Business
Just as business owners might make financial decisions after collaboration with staff or advice from an accountant, personal financial decisions are stronger if all the family is on board and can have a say. Saving for holidays is a great way to introduce children to budgeting, for instance.
Budgeting means informed planning of your expenses balanced against your income, and preferably putting some kind of time frame on the plan. Having a time frame gives your goal some structure and helps keep you focused, especially if temptations to overspend crop up, which can happen in business just as easily as in family finances.
Informed planning comes from understanding spending patterns and trends. You might think you know exactly how you spend money, but until you break it down and study it a bit you can’t be sure you’re not missing savings opportunities.
Here’s how to dig into your spending habits.
Track Your Expenses
If you do any kind of business operation you should be doing this anyway, but it’s just as important for personal finances. Similar skills and methods apply to small business accounting, just on a deeper, more complex level. If it can work for business, it can surely work for families.
Tracking your household spending is relatively easy with nothing more complex than a notebook or simple spreadsheet. If you take the spreadsheet route, remember to get a receipt for everything so you don’t forget a purchase when you’re at the computer. Once you’ve recorded the information on the receipt, you can get rid of it - unless you want to save it as a proof of purchase.
Create your tracker with just four columns, giving them the headings of ‘Date, ‘Cost’, ‘Item’ and ‘Balance’. Start the balance off by jotting down the amount currently in your bank account. Remember to include direct debits so your personal records tally with what’s going out of your bank.
Start a new page at least every month and keep your records up to date so it only takes a few minutes now and then. It doesn’t have to be a daily task unless you have a lot of daily expenses to track.
Delve Into the Numbers
Once you’ve got a few weeks of records, you can start figuring out where you can make the most savings. The mistake many people make when they’re trying to increase savings is to start by cutting out leisure or pleasure purchases. This isn’t the best way of cutting down on spending as you’ll soon give up if you start feeling deprived.
A better way is to figure out ways of spending less on necessities. You’ll find categories of spending in your ‘Item’ column, and that will tell you where you’re spending most money. You can shop around for better deals, switch to zero interest credit cards, or look for better terms on utilities.
It might also throw up some surprises. Maybe you didn’t realise how much take-aways were costing each month, or how much you were spending online if all your purchases were small ones. It can be shocking to see how little spends add up over a month.
Seeing the amounts in black and white can be a bit startling, but they also empower you to take control.
This isn’t a complicated system, and just about anybody can put it into action. It’s a far better way of figuring out how to save than randomly trying to cut back. One of the reasons there’s sometimes more month than money is because the thought of tracking spending can feel overwhelming.
Maybe like us, you’re saving for something special like a big holiday, or maybe you just want to manage money better so you can have a few luxuries or days out. Keeping a close eye on your spending in a simplified accounting system means you always know what’s going on with your money, and you can choose to some extent how you spend or save it.
Michelle