Frugal Strategies Friday: How Paying Attention Saves You Money

Of all the strategies I’ve used, this one is the most powerful. I say that without a doubt, without a moment of hesitation. Paying attention to your finances is the single most important thing you can do to keep your spending under control.

So how do you do it? What exactly do you pay attention to, to make the biggest difference?

Account Balances

First off, you need to pay attention to the balances on your bank account, credit cards, and any other line of credit or investments you might have. Make it at least a weekly habit to take a look at your balances to see where you are at. And if you share an accounts with anyone else, make sure you do this together, or at least discuss it afterwards.

There is one caveat though: it can be easy to relax a little too much if your balance is a bit higher than expected. I can’t tell you the number of times that my partner and I have checked our balance, found it to be a little flush, and then both been a little more liberal with our spending, only to end up in the red at the end of the week.

Track your spending

This is a great way to start on the road to financial health. My partner and I tracked every penny that came or went for two months last year, and we learned so much about our spending habits, and where we could make big gains with small changes.

The biggest one was my partner’s work lunches. It was costing us probably about $50 per week to have him eat out. This included his coffees and cookies at Starbucks as well as lunch. Simply by making it a priority to send left-overs with him the next day (rather than, say, saving them for another dinner), and stocking the freezer with ready meals as a back up, we were able to save probably around $200 per month.

Tracking our spending made that happen.

Other things worth noticing

You can save money by paying attention to other things to, like flyers at your regular grocery store, as well as at other stores in your area. If you have investments, it’s probably worthwhile paying attention to what economists are saying about interest rates and so on.

But in the end, we can bring it home to this: What value are you getting for your money?

Does the latest toy you brought home really make you happy? Did you really enjoy your last vacation? Are you throwing money at a problem rather than dealing with it directly?

Paying attention to what you get for your money, in real and emotional terms, may help you realize you would like to spend more on some things, and that’s okay too. But if you finally notice or admit that your weekly visit to the bar with your colleagues, for example, is more of a drain (on your energy as well as your wallet) than a boon, it won’t take you long to make the changes you need to to bring your spending more in line with your values.

What have you noticed by paying attention?

Check out Your Money or Your Life for techniques for tracking and analyzing spending and ways to measure your spending against your values.

Advertisements

2 thoughts on “Frugal Strategies Friday: How Paying Attention Saves You Money

  1. This is what we took away from your money or your life(Thanks again for writing about it, I would have never found it otherwise)

    I can’t seem to keep track of absolutely every penny we come across.

    I’m really interested to take some time and catalog everything we own to see our worth.

    1. Yeah, it’s hard to write about this stuff without slipping into YMOYL territory. Good luck with calculating your net worth. I’d love to do that, and graph it like the book describes, but haven’t gotten around to it yet. I bought the book at Christmas time so I will get around to it some time. Good luck with your graph if you do one!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s