Many people have no idea how much money they are wasting each month because they do not keep track of their spending. If they kept track of their spending each and every month, they would most likely have great credit scores.

What are people wasting their money on? They are wasting their money on things such as buying several cups of coffee everyday or going out for lunch 3 or 4 times a week, as well as going out for drinks every Friday night after work. Even people with a nice monthly income who should have a nice credit score and a healthy financial status, are in trouble at the end of each month because they spent so much money on small stuff and now they can’t afford their living expenses. We think that because we work hard and make a good living that we deserve all these extra things. Heck, we are only talking a few dollars at a time. But by the end of the month the few dollars here and there add up to $100.00 or $200.00, and now we need to borrow from our line of credit to pay for groceries next month. It’s a vicious cycle that many people can relate to.

It is hard to believe that spending money on coffee or going out for a drink can affect our financial status in such a significant way. Another expense that seems small but really adds up is cigarettes. People spend a lot of money on cigarettes even though it is bad for them. If, at the end of the month you struggle to pay your bills and wonder where all the money went, consider taking a minute to add up all the small spending that you do each day and see how much it really comes to. Is this money that you could have used to pay down a credit card or build up your savings account?

Even if smoking and eating out aren’t something you do, you probably are still spending small amounts of money on something each month. Once you figure out what that is, you will be in a better position to make some positive changes.

Everyone does this at some point in their life. They spend money without even thinking about it, especially when they are only spending a few dollars at a time. Step back and think about it. Instead of spending a few dollars here and a few dollars there, why not put that money into your savings account and use it to pay down your debt at the end of the month. The quicker you pay down existing debt, the better your credit score will be.

To figure out if you are spending your money on a lot of small things, try keeping track of your daily spending, at least for a month. Create a budget that details your income as well as all of your debt payments and monthly expenses. At the end of each month add up the small purchases you made. When you add everything up at the end of the month you will easily see where you are spending too much money and where you could cut back. Even if you are able to comfortably pay your monthly expenses and still go out for lunch every day, consider cutting back on the lunches, and putting the cost of those lunches into a savings account for the future. Small changes will make a big difference to your financial situation.

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