How to spend less money with free tools

With the new year underway, it’s an excellent time to review your spending from last year to identify potential ways to spend less money. Today, I am going to discuss a few tools (there are many more than these) you can use to help you do so.

Mrs. Edge and I use Personal Capital to track all of our financial accounts. It’s free, and they do offer an advisory service for your investments which may be of interest. We do use the built-in retirement projection and investment asset allocation tools to see how we are tracking. But, what we mainly use the site for is to see how much money we have, but not as much fun, to check our spending and see what bills are due. This past week, we dialed up the site to see what happened to our money in 2014. Our main expense categories, which weren’t really a surprise, were mortgage/housing, restaurants, travel, automotive, and grocery expenses. Ouch.

I definitely want to spend less money but wish my balance were this

spend less money

Credit: Personal Capital

While the mortgage/housing and automotive expenses are pretty fixed, for travel, dining out, and groceries, we could definitely spend less money there in those areas. We love travel but it is definitely a luxury cost. What makes it worse is that it typically involves dining out, too. We could save quite a bit more on groceries, since we do have store options, but saving money on food also involves making initial choices on the type and quality, too. Coupons help and so does using our American Express card which rebates 3% at grocery stores. Experimenting with grocery delivery has been fun, but there’s clearly a markup there, too.

Besides, Personal Capital, other online options include Mint.com,which I don’t use, that serves essentially the same purpose as Personal Capital. And, there are many apps on Google Play and the iTunes app store, too. Some are really geared for budgeting and planning as opposed to just tracking what you have already spent. Try out a few out before buying them as not all are free.

Since these sites do take a bit of set up time to figure out, another easy way to monitor what you have spent in the last year is by reviewing your year-end summary statements from banks and credit card companies. Chase, my credit card provider, typically around the 11th of January publishes a complete list of all of my spending on a certain card in the past year. Then, they put it in a pie chart so I can really see how much those once-a-day habits really add up. The categories they use to code transactions are fairly accurate, but for the more detail-oriented folks (I count myself) you will want to import these transactions into a money management tool and re-code them yourself. A great example of mis-coding I will see on statements is for Walgreens. I usually buy a lot of household products there and some groceries but the coding comes up as Health/Wellness. It doesn’t really apply here. More on my frustration with credit card transaction coding another time.

The point of this is that no matter what your income, reducing spending and controlling costs that you can are great, time-tested strategies for healthy wallets. Any identified savings are also great for boosting your savings and investments, too.

Now that we have identified some “problem areas,” the next step is to see how we can address them, which I will do in future posts. With the exception of housing costs and perhaps some automotive expenses, which really depend on a lot of variables such as personal preference, safety, convenience, lifestyle, and credit score, most expenses can probably be reduced. For these, I will look forward to presenting alternatives for you to spend less money that ideally won’t compromise your lifestyle too greatly.

 

 

 

Posted in advice, credit cards, free, savings and tagged , , .

mschroed@hotmail.com

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