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Regaining Control of Your Finances: Establishing a P&L and Thinking Twice Before You Spend

We all live in a society where you need to spend money on everything. You need money to go to work, grab a bite during the breaks, pay your bills, go to a good college, take a new course, eat, party, and in many other situations. In other words, time means money, and not spending it wisely can result in devastating consequences.

Another sad aspect of life is that when you don’t produce money, you actually spend money in one way or another. Even if you don’t actively do anything, you still consume water, electricity, or internet bandwidth. Obviously, all those utilities that you consume will be reflected on your next bills

There are plenty of ways to regain control of your finances, and we’ll gladly present you with some of them:

Establish a P&L

P&L stands for Payments and Losses, and it lets you keep track of your money in a very efficient way. It implies simply putting on a table or on paper all the payments and losses you have during a certain period of time, such as a month or a week. Slice your revenue into a few parts, and establish a certain budget for each of your major payment areas. Don’t spend more than what you have in those mini budgets!

For instance, you can decide to spend a maximum of $300 for utilities, $600 for food and shopping, and $500 for that “special something” that you’ve wanted to buy, such as a laptop or a new TV. As long as you don’t spend more than you have on those budgets for each group of payments, you should have full control over how much money you spend. Optionally, you can start saving some money from what you have left from the mini budgets after making all the payments. Saving money in the long term is a very good idea!

The P&L method obviously implies that you need to estimate how much you’ll be spending over the course of a month or a week for each area – utilities, groceries, hobbies, etc.

Think twice or triple before you spend money

We all have to admit that there are a lot of temptations out there on the web or when you go to the hypermarket. Everybody tries to convince you in one way or another to buy their product, although you don’t necessarily need it. And on many occasions, those sellers will only present you with the positive side of a certain product, although it can also have some negative specs that surely won’t make you happy. That’s pretty much how marketing works, unfortunately, or not! Therefore, it’s a great idea to always search for a specific product on the internet and check multiple sources that present it. It’s even better if you look for reviews as well. In this way, you can know for sure if you really need a specific product or not, if it really will be helpful for you or if it will just make you spend money on something useless.

You should always think a lot before you buy something! Another great tip is to ask yourself if that specific product that you want to buy represents what you need for the long term. What’s the use of buying a midrange phone, for instance, if in a year or two, there will be many other smartphones on the market that are superior in terms of specs? You might have gotten yourself a better deal by simply buying a better smartphone in the first place.

These are some of the best tips we can give you to get rid of hemorrhaging money! Would you have any tips of your own that weren’t exposed here? Feel free to comment in the section below!

By Henry R. Lares

Henry Lares is still early into his career as tech reporter but has already had his work published in many major publications including Tech Crunch and the Huffington Post.  In regards to academics, Henry earned an engineering degree from Apex Technical School. Henry has a passion for emerging technology and covers upcoming products and breakthroughs in science and tech.

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