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Find Budgeting Tips to Cut Back Discretionary Spending

Learn how to stop over-spending and live within your means

If you find you're spending more than you can afford each month, it might be time to take a look at your discretionary expenses. Whether you're spending on fashion, food or football, expenses for hobbies and impulse buys can add up, and before you know it, you're over budget for the month. When you're spending money with a credit or debit card, it can be easy to lose track of what you've purchased. Consider these budgeting tips to help you track your discretionary spending and look for ways to cut back without giving up the things you enjoy.

Track your spending with online banking

When you have your bank accounts set up with online banking, it's easy to monitor your past purchases and find ways to cut back. You can even use a tool like Quicken for your checking account and break your expenses into categories like car, home repairs and payments, groceries, clothing and discretionary spending. However, not all your discretionary purchases are as easy to identify as the new bike accessory, album or concert tickets you bought. Sometimes you'll need to go back and look at receipts to find impulse buys like that cute top or DVD you couldn't resist, or some extra snacks you grabbed while grocery shopping hungry.

Create a budget to help you control your spending money

Every budget should account for a few discretionary purchases a month. Whether you're dining out or buying clothes for a new season, there are fun expenses that need to be accounted for. The key to controlling your spending is to plan as much as you can and limit the money you set aside for extra, fun purchases. Start each month by paying your bills and setting aside money in your savings account. (With online banking, you can link your bank accounts to make transfers quickly and easily.) Then, create a budget for your necessary monthly expenses like groceries, travel, medical care and household products. With your remaining income, create a budget for your personal spending. Include meals out, fashion sprees, concerts or other events, expenses to maintain your hobbies and any planned vacation costs. You can even put this money in a separate checking account designated for discretionary spending. Just make sure you don't overdraw or cheat and make impulse buys with other cards.

Enjoy what you love without spending too much money

After you have a budget created, consider where can you cut back and contribute to a savings account. Whether you're saving up for a bigger purchase or planning for the future, putting a little of your spending money into savings instead will help you meet your goals sooner. Follow these budgeting tips to cut back on discretionary spending without giving up what you love or why you shop.

  • Exercise: Retail therapy is often an outlet for stress or a bad day. But, if you're trying to cut your spending back, consider hitting the road for a run to clear your head.
  • Make a list: Before you go shopping, make a list and stick to it in the store. Whether you're grocery shopping or clothing shopping, avoid buying anything that's not on your list. If something catches your eye that's not on your list, walk away from it or place it on hold for now. If you still want it after a few days, go back and get it. If it's still outside your budget, save up for it instead of using your credit card.
  • Just don't shop: Can't avoid buying best sellers or hot new blouses? Challenge yourself to go a year without new purchases. You might be surprised what new books you find at the library or what new outfits you can create from your closet. Trade with roommates or friends to mix or match, and treat yourself at the end of your challenge to a new outfit or other purchase.
  • Unsubscribe from emails: If online shopping is your weakness, unsubscribe from email blasts from your favorite stores. If you don't know about the sales, you're less likely to spend money. Once you get your spending on track you can always join the mailing list again.
  • Scale back spending: Love your country club membership or season tickets? You don't have to give up your games to save money. Consider joining a public club for less money, and buying tickets to a few games and hosting parties at home for the rest.

Maintain good budgets even when spending more money

No matter what your budget is, it's important to know where your money goes. Plus, when you're monitoring bank accounts you're more likely to make wise financial decisions. Consider saving up for one or two larger purchases rather than spending money on impulse buys. Creating goals like that new stereo system or designer bag may help you avoid the last minute chocolate bar or shoe purchase. Open a high-interest savings account to deposit your savings where they'll earn more for you over time. To learn more about budgeting tips and bank account management, talk to a representative at Citizens Bank.



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