Southland News

April is Financial Literacy Month, so we're going to take you through the basics of five financial principles:

• Earning
• Saving and investing
• Protecting
• Spending
• Borrowing

Follow along each week to learn some key information about each topic!

Principle 4: Spending

How you spend your earnings has a huge impact on your financials, so it's important to learn how to manage your spending in a way that will set you up for long-term financial success. 

We'll cover three things you can do to keep your spending in check:

1. Tracking your spending
2. Creating and sticking to a budget
3. Practicing positive spending habits

Tracking your spending

Tracking your spending is an important first step that will show where your money is going and what your past and current spending habits are. 

So how do you track your spending?

First, gather up all of your account summaries for the past several months. This would include any summaries from your bank or credit union accounts, credit card summaries and receipts from your purchases, especially if you use cash often.

Second, use these reports to categorize and add up all of your transactions. If you have recurring charges for ARCO and Chevron, you can group those into "Gas" or "Transportation", and so on with the rest of your transactions. 

Third, separate these categories into needs and wants. For example, your rent and utilities would be needs whereas your Amazon Prime subscription and eating out would be wants. 

Now that you can see just how much you're spending in various categories it's easier to see where you may need to cut back and where you do the most of your impulse spending. 

Creating and sticking to a budget

Using the information you found from tracking your spending, you can now easily create a budget. Be sure to include your savings and investing goals that we covered in Principle 2. 

If you are a Southland Member, you can take advantage of the budgeting feature in Digital Banking to create your budget, track your spending, and set spending alerts. If you aren't a Southland Member or you use several accounts to manage your finances and spending, you should consider using a budgeting app like Mint or EveryDollar. 

There are several types of budgets, so it's important to find the method that works for you!

Now that you have created your budget, it's time to stick to it! Sticking to a budget can be a difficult task, especially if you're new to setting spending limits for yourself. 

Let's explore how to build healthy spending habits to making your budget easier to follow. 

Practicing positive spending habits

Having conscious spending habits that you follow will make a huge difference in how you manage your spending!

The easiest way to lose control of your spending is by giving in to impulse wants, so let's prevent that from happening with the following methods:

1. Track your expenses somewhere you see often. 
2. Use a list when you go shopping.
3. Establish a waiting period before you buy anything.
4. Do your research and compare prices. 
5. Don't save your card on apps or devices. 
6. Stay away from habitual convenience purchases. 

Don't let spending derail your financial plan

You've worked so hard to earn, save, invest and protect your finances - don't let your spending habits set you back. It's never too late to start examining your purchases and creating positive spending habits for yourself, so start today!