Track Your Expenses

First, you should track your spending. You can try a new organizational tool, like a budgeting app or a spreadsheet, or simply review your bank statements from the past few months. Either way, make sure you have an accurate record of your spending that accounts for all activities, from daily purchases to major expenses like insurance.

Observe your patterns, and make notes about anything surprising. Do you spend more on dining than you thought? Do your utility bills spike at certain times of year? It can help to categorize your expenses into larger groups, such as housing, debt payments, essentials like groceries, and discretionary spending.

Consider where you can save more, but also where you have room to allocate funds. Maybe that nice dinner out is more attainable if you cancel some unnecessary subscriptions, or seal your windows to lower heating fees. Remember, budgeting is not meant to punish you but to improve your life. It’s important to, responsibly, reward yourself for saving money and progressing towards financial goals.

Set Spending Limits and Goals

Keep an eye on your tracker for several months, adjusting along the way. It can be helpful to write down some ideas to improve your financial habits, or to discuss them with a trusted friend, for clarity and accountability. You may want to set spending limits for certain categories. Alternatively, you can try setting a savings goal - for example, saving $30 a month by making coffee at home instead of buying it at a cafe. This can work as a positive reframing method that motivates you to save more.

Allow yourself the flexibility to change your budget and find what works for you. The “perfect” budget is only as good as your ability to follow through, and the smallest, good decisions can stack up into huge benefits over time. If you need help setting realistic goals or keeping track, try connecting with one of Affinity’s Certified Wellbeing Coaches¹.

Make Your Accounts Work for You

Once you start budgeting and saving, set yourself up for greater ease and success. Consider automating bill payments and savings account contributions. Also, make sure to use a convenient and high-yield savings account, like Affinity’s SmartStart². With SmartStart, you can set up direct deposits and earn up to 3.5% APY. This can make saving simple and effective.

If it’s convenient for your lifestyle, you should also use digital account statements and a banking app to track your money on the go. With modern technology, it’s easier than ever to keep track of your spending and accounts.

Review Regularly

As budgeting, saving, and understanding your spending habits becomes more of a routine you may want to check in on your needs, goals, and income as they may change over time. Your financial journey will be dynamic and varied over your lifetime, but learning good habits will always keep you moving in the right direction. Try to review your spending on a monthly or quarterly basis and reassess as needed.

Understanding and refining your spending trends is an ongoing process, but consistent monitoring will empower you to make smart financial choices and celebrate your success. By tracking expenses, identifying patterns, setting realistic goals, and reviewing your spending regularly, you can take control of your finances and create a spending plan that supports your financial wellbeing.

This information is for informational purposes only, is intended to provide general guidance, and does not constitute legal, tax, or financial advice. Each person's circumstances differ and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and legal counsel to discuss your particular needs before making any financial or other commitments regarding the matters related to your condition.

¹Retrieved from: https://www.affinityfcu.com/financial-wellbeing/certified-wellbeing-coaches

²Retrieved from: https://www.affinityfcu.com/personal-banking/banking/savings/smartstart-savings