If your day-to-day spending feels out of control, you may have tried tracking your expenses to reign them in.
Tracking can be illuminating, but it’s time-intensive and tells you where your money went. It doesn’t provide guardrails to protect where you want your money to GO.
Try this instead:
- Look over the past few months of your day-to-day spending – gas, groceries, eating out, coffee, Amazon, DoorDash, etc. – and determine your monthly day-to-day spending budget.
- Set up a separate checking account and call it your spending account.
- Divide your monthly day-to-day spending budget by the number of times you get paid each month and transfer that amount to your spending account every pay period.
- Use your spending account for all of your day-to-day expenses.
Now your day-to-day spending is a fixed expense. Like your car payment or cell phone bill.
When all of your day-to-day spending happens inside of your spending account, you don’t have to worry about everyday expenses ransacking your bill account. You can confidently put money toward debt payoff or savings or whatever you want!
This step is a game changer.