Saving: First Steps

Updated: Feb 22

"Measurement is the first step that leads to control and eventually to improvement. If you can't measure something, you can't understand it. If you can't understand it, you can't control it. If you can't control it, you can't improve it." - H. James Harrington

Measuring Your Finances

Improvement starts with measurement. If you don’t measure the thing you're trying to change/improve, you won't know where to start or what your progress looks like.

When it comes to your savings, you need to track your expenditures. You need to know what you’re spending your money on and then you can look into ways to reduce those costs.

There are many tools to help measure your spending that make it easy and convenient. I used to go through my credit card statements every month and categorize my expenditures in a spreadsheet, but now there are easy to use apps that can do this automatically.

Know Where Your Money Goes

Once you see where the majority of your money is going, you can focus on cutting costs. It's best to look at your largest spend categories first and prioritize cost savings there.

For instance, maybe your largest expenditure every month is on gasoline for your car. If you focus on cutting your largest costs, it will have a greater effect on your savings. In this example, you could get a credit card that offers high cash back percentages on gas. Or you could get a Costco membership and fill up at Costco where gas is generally cheaper. Whatever your largest spend categories are, focus on these first.

Tools to Help

By measuring and tracking your finances every month, you should have a pretty good idea of what your expenditures are. If you use an app to help you do this, it will be easy for you to see your month-over-month progress in cutting your costs and increasing your savings.

First Step In Saving More

If you’re serious about beginning to save more, the biggest favor you can do yourself is to track your spending and know your spending. Then, you can prioritize your efforts and actually visualize your progress over time.

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