4 Bank Statement Indications that You’re Overspending
Doing a little analyzing of your checkbook can tell you a lot about where your money is going and even give you a little bit of insight into some of the deeper trends and habits that you’ve developed in terms of your financial outlook.
It’s always a good idea to keep an eye on those habits, as they’ll tell you pretty quickly if you’re overspending or allocating resources to a place where you don’t really need them.
It’s tough to be consistent about watching our outgoing money, but it’s a necessary step to take if one wants to be financially stable and successful. In fact, what you do with the money you have is every bit as important as the size of your paycheck. There are plenty of people who make $30,000 every year who are more “wealthy” than some people making $100,000.
So what do we look for when we’re looking at our expenses and expenditures?
There are three indicators in particular that should signal to you that you’re spending too much or misallocating resources that could be saved, or put to use somewhere else. While it requires a little bit of work, notes and analyzing, it’s well worth the effort.
Here’s what to watch for when you’re doing the math.
1. Frequent Restaurant Spending — If your restaurant spending even comes close to what you’re spending on groceries, you’re probably throwing away more money than you realize. Restaurant food is always overpriced, especially when compared to what you can get at the grocery store. While some eating out is fine, if you notice it as a trend in your spending, you need to put the brakes on, and limit yourself to one meal out every week, if that.
2. Lots of Small Purchases — Necessary expenses will usually come in bigger chunks every month, so if you start noticing a lot of small purchases (under $10) on your bank statement, you’re probably nickel and diming yourself to death. These purchases will vary from person to person, but a lot of it will be gas station purchases, fast food or just nick-knacks that you don’t really need.
These purchases don’t seem like much, but they add up, and are ultimately a waste of money, especially if you consider that everything at a gas station (aside from gas) is always going to be more expensive than if you get it when you’re grocery shopping.
3. Too Many Daily Entries — Paying for monthly expenses and basic needs actually shouldn’t be an everyday occurrence. Between the days that you’ve gotten the important things paid for, your bank account should be fairly quiet. Now obviously this will change depending on the day and month, but on a typical week, you shouldn’t have money going out every day.
If you do, look at those purchases and see if they’re really necessary, or if they’re just being spent on things that you don’t really need.
4. More Outgoing Money than a Week’s Pay (unless rent or mortgage has been paid) — If you’ve got a big payment going out, like the rent or mortgage, then you’re off the hook on this one. Otherwise, it’s a good idea to make sure that your spending on any given week doesn’t exceed your week’s take-home pay.
It should never have to happen, and if it does, you’ve got a definite red flag that you’re spending way too much in light of your income.
Take some proactive steps throughout the week to prevent this, and make sure that you come in well under whatever you’ve made that week. Some of those steps could include cutting down on convenience or restaurant purchases, or cutting out some entertainment expenses like a hefty cell phone or cable package.
The more excess you have on the easy weeks when you don’t have to pay bills, the better off you’ll be during the weeks when you do have heavier expenses to take care of.
Omar Maxwell is a professional blogger that provide financial information and advice. He writes for Pure Checks, a place to order business checks online and order checks online for any occasion.
Share this:
Category: Family Finances
