Take account of your expenses—especially the little things
To start things off, create a spreadsheet of absolutely every single purchase you’ve made last month. This will help you create a budget for next month. It should consist of your necessary expenses—such as your mortgage or rent, groceries, savings accounts and bills—and your more negotiable expenses, including subscriptions, entertainment expenses and impulse buys. For the latter category, go down to the brass tacks: your goal will be to whittle them down to nothingness, and every little bit will free up cash to play around with. The small things are easiest to identify as not worth spending on.
Trim the fat
It’s too simplistic an aim to cut down on the unnecessary things in your life—after all, many of the things you simply want to spend on are just that. However, it pays to cut out redundancies. Why are you paying for a 105-channel cable TV package if you spend $80 on a top-of-the-line internet connection? Replacing a costly cable subscription with Netflix is makes more sense. Likewise, think of services you don’t use—or don’t use enough to be cost-effective—such as a gym membership. Move your weekend half-court games from the cool downtown gym to the local YMCA and you’re saving another $60 monthly.
Set the budget
Now you know exactly what you have to spend on every month. All you have to do is match up your real income with each expense. Allocate money towards your non-negotiable expenses, plus the trimmed-down ones, and—voila! The rest of the money is yours to spend as you wish, with no strings attached. Just know that there’s no room for cheating this budget. Since all your expenses are either important or minimized, that means going over your spending limit can mean missing a mortgage payment or forgoing an electricity bill. When put in black and white terms, staying motivated to spend consciously gets a lot easier.
Figure out your real priorities
Now that you’ve freed up a few hundred dollars you didn’t know existed, ensure you don’t make the same mistake twice. Society has conditioned us to spend money without thinking, especially if we have a large, unallocated amount sitting in an account. From now on, scrutinize every purchase using the same approach you used when you were cutting down on the unwanted things you’ve already blown too much dough on. When you see something you’d like to spend on, make note of it and wait a few weeks. If you still want it and it still sounds like a worthwhile investment, buy it. No more waste.
It’s not about limits
Once you know exactly how your money is being spent each month, it actually gives you more freedom to spend, not less. The thing is, you’re not sacrificing necessities, you’re cutting down and switching to cheaper and more effective alternatives for what you can already do without. You’re thinking about how you spend. There’s so much less temptation to spend cash you have set aside for necessities when you see the fat spending account you’ve created by cutting down on the useless things in your life.