5 Reasons to Pay Attention to Your MOney

There are plenty of things to do that are far more exciting than watching ourselves spend money. But, if you have lofty financial goals like saving for retirement or paying off debt, paying attention to your money is critical. Even if you’re not trying to reach a good goal, you should watch where your money goes simply because you’ve earned it.

Because you work hard for it.

Money does not come easily for most of us. You work 40 to 60 hours a week to earn a living, you shouldn’t let your money go without paying close attention to where it’s going. Think about the money you spend in terms of the hours of the hours you’d need to work to earn that amount. For example, if you earn $15 an hour, you’d have to work about 2.5 hours for a $30 dinner, factoring in taxes and benefits. Is it worth it?

To better meet your financial goals.

It’s much easier to meet your financial goals when you know where your money is going. You have a better idea of how much is going out and what’s left to put toward your big goals. Want to save for a vacation or new furniture? You may be able to save up a little faster by cancelling some subscriptions: Hulu, Netflix, magazines, satellite radio, etc. Consider all the things you pay for on a monthly basis. Cancel a number of them and you could easily come up with an extra $100 per month.

Avoid a habit of spending without thinking.

You can easily create a habit of spending thoughtlessly without checking your budget or making sure you can afford a purchase. Continually paying attention to your money, reviewing your spending frequently, helps keep your spending habits in check. If you pay close attention, you can catch overspending before it gets too out of control.

Notice if prices have increased.

Companies have a sneaky way of increasing prices on the products and services we use. Prices inch up slowly and without warning, so many of us don’t realize we’re paying more money for the same service we were getting last year or even last month. Keep track of what you spend on recurring services like cell phone, cable, electricity, insurance, etc. Call your service providers if you notice prices have increased. You may be able to have your rates lowered to where they were before.

Make sure you’re not going into debt.

People don’t typically go into debt on purpose. It often happens because they weren’t paying close enough attention to their finances to realize that they’re spending more money than they’re bringing in. Don’t take for granted that because you’re paying all your bills, including the minimums on your credit cards, that everything is ok. When you track your monthly spending, make sure to include what you charged on your credit cards. If your total expenditures exceed your income, you have a problem that has to be corrected.