Are you looking for the key to financial success? It certainly doesn't involve finding some secret money-saving strategy no one else knows about. In fact, there's no real secret to it at all. If you're looking for a way to save more money, start small by focusing on the key fundamentals. Consistently doing the little stuff right — over and over again — could be your key to success.
A money challenge could be a great way to start, as it could help you better understand your spending and identify areas where you could cut back. These adjustments could help you get that much closer to reaching your long-term savings goals.
The 30-Day Track Everything Challenge
Many people struggle to save more because they feel they don't have enough left over at the end of every month. But here's the thing: You might actually be able to come up with extra money to boost your savings by taking a closer look at your budget. Your budget might have a leak — and money may be slipping out without you even noticing it. Luckily, the 30-day tracking challenge could help you find (and plug) your budget leaks and gain more insight into how you use your money.
Here's what you need to know to try the challenge for yourself:
- Choose your first day: This could be any day, but it might be easier to complete the challenge if you start on the first day of a new month. Doing so helps you stay more organized and makes it easier to track how far into the challenge you are.
- Track every single penny: Literally. You'll want to record and pay attention to every single cent you spend over the next 30 days. If it's a transaction that involves money leaving your wallet or bank account, you need to track it.
- Look back at your spending once the challenge ends: Once the 30 days are over, evaluate where you spent money and see if you can spot anything surprising. This review is a great way to find additional room for improvement in your budget. How? You can eliminate the unnecessary spending and possibly put the money toward your long-term savings goals, such as homeownership, college savings, investments or retirement.
In addition to knowing how the challenge works, you'll need a few tools to use along the way. First, consider how you'll track your spending over the next 30 days. There's no one right answer here: You can use pen and paper, a spreadsheet or an app on your smartphone. The right choice for you is whatever system you're most likely to stick with consistently.
Remember, your goal over the next 30 days is simply to track everything you spend. That's it! Once you reach the 30-day mark, then you can look at all your data, evaluate it and make a plan that outlines how you'll save more moving forward.
Evaluating After 30 Days: What's Next?
This 30-day challenge might seem like it's all about your spending, but it can really help with your savings. At the end of 30 days of tracking every penny, you'll better understand how you use your money — and you might even uncover some things you didn't know about before.
You might realize you're spending far more on a certain budget item or category than you thought. Maybe you actually spend $100 on coffee every month, when you've been assuming you only spend about $50. By paying attention to your spending, you're also more likely to notice things like buyer's remorse or realize when something you bought didn't actually move you closer to your goals.
Look back through your 30 days of transactions with a highlighter in hand. Flag anything you now regret buying or money you wish you hadn't spent — these are areas where you could probably stop spending immediately. Then, go back through the list of transactions with a different-color highlighter. Highlight the expenditures you now feel were wasteful or unnecessary, such as a subscription you don't actually like or use anymore. Consider removing these unnecessary services, subscriptions or recurring spends from your budget.
Once you take these steps, you can restructure your budget to reflect the kind of spending you want to do. Adjust each line item to reflect a realistic spending amount — and then see what's left over. You can put the extra money toward your largest savings goals.
You can use this challenge over and over again. In fact, the more you pay attention to your money, the more likely you are to have an easier time saving. When you're aware of your spending, you empower yourself to make better, more mindful choices about what matters most to you.