As you have created a good habit of tracking your expenses every day, the next step on the money-saving journey is to cut back on your spending by creating your daily spending allowance. I still remember the time when I used to spend money carelessly on random things. Most of the time, I buy things at first sight. Instead of thinking carefully about whether I really need a particular item or not, I just bought it anyway regardless of its value and contribution to my life. This is the worst action ever since you will run out of money even before you can notice.
What is a daily spending allowance anyway?
A daily spending allowance is a limit I created to limit myself from spending carelessly every day. At first, this seemed like an impossible task since I did not know how much is enough since every day is not the same. There are days I need to go out, have a drink with my friends, dinner with my lover, or some other miscellaneous expenses that I could not foresee. However, not thing is impossible if you put your heart and mind into it. I believe that nothing beats practice, and practice makes perfect. To successfully save money, I started by allowing myself to buy only necessities plus one or two miscellaneous items. For instance, as a student, I live by myself so I planned to cook at home. If you cannot cook due to whatever reasons, don’t panic since you will still be able to save a lot of money if you are strict enough with yourself.
How I did it
With that said, I allowed myself less than forty dollars per day for breakfast, lunch, and dinner no matter where I have those meals. If I went out for breakfast, and it cost me over a third of my daily allowance, I would have to figure out what I want to eat for lunch, and what I want to eat for dinner. In most cases, lunch and dinner are more expensive than breakfast since they are bigger meals. However, for some people, their breakfast is the most important meal of the day and it costs them more than their lunch or dinner. If you belong in the second group, just make sure you think thoroughly about what you are going to buy during the day so you do not run out of money.
Tip of the day
In case you spent too much on breakfast and lunch and ran out of money before dinner, use the allowance on miscellaneous items to buy dinner instead and don’t buy anything else until the next day.
Aside from the daily allowance for my meals, I also set up a daily allowance for other purchases. For instance, after I subtract all of the fixed expenses from my monthly income, I divide whatever I have left by 30 days. As long as I know how much I have to spend for one day, I can figure out how much I got left to spend on food and other miscellaneous things.
I would like to ask you to try and figure out your daily allowance. It may seem confusing, but as soon as you get it, your life will be much easier since you are in control of your expenses.