If your debt keeps increasing, then you are spending more than you earn. The first step to financial freedom is to keep track of your spending.

Every year, the first task our Money Makeover candidates undertake is to see where their money is going – to take a detailed look at their spending. It is only with this insight that they can truly take control of their finances.

When assessing your spending habits, it is usually the small things that do the biggest damage. We often look for “big fixes” or large items to cut from our budgets, but often it is an accumulation of smaller, everyday behaviours which is having the biggest impact.

Take a look at the changes that our six Money Makeover 2023 contestants have decided to make in their spending habits.

Three steps to help you keep track of your spending

Step 1: Print your bank account and credit card statements for the last three months. Colour-code similar expenses with highlighters and break it up into these categories:

• Expenses that are needs, for example: rent, electricity, school fees, saving contributions;
• Luxuries that you can live without, for example: takeaways, eating out, beauty and spa treatments, unnecessary clothes;
• Expenses to review, for example: car and long-term insurance, medical aid, consolidation of policies.

Step 2: Capture all your expenses on a spreadsheet and compare the total with your take-home pay. Identify which expenses you can cut back on. You can use the budget template tool (the household budget calculator) on the Money Makeover website.

Step 3: Spend some time each week  (it can be as little as 10 minutes) reviewing what you have spent. Being mindful and aware of where your money is going is the first step to having control over your finances and setting yourself free from burdensome debt.