How do you know if you are spending too much money? You run out of money before you run out of month. You are now that friend that no one invites out because you are "always broke". That twenty you took out of the ATM yesterday is gone, but you have no idea where it went. GetRichSlowly.com recommends an emergency fund, and you would love to start one, but how can you when you don't make enough to get by now?
Earning more money is one option, but keep in mind that a dollar earned is about 65 cents got. A dollar saved, though, is a dollar got. Here are some tips to help you plug the holes in your pockets and keep more of what you make. Pick a couple that work for you and implement them right away.
1. Track expenses
When your $20 disappears and you don't know where it went, that's a problem. Tracking spending identifies where the leaks are. Write down every penny you spend, where it was spent and why. How many of those expenses would be considered "necessities?"
2. Change small habits
The key to successfully curbing unnecessary spending is to do it a step at a time. If your expense tracking reveals a $300 monthly lunch habit, you probably won't be successful if you try to quit buying lunch cold-turkey-on-rye. Ease into it by brown-bagging two days a week. Then make it three. If you are making two trips a day to the coffee house for lattes, cut it back to one, then just a couple of times a week.
Identify a new target each month, and attack! It won't take long to strike a budget-life balance you can live with.
3. Write checks
That's right, I want you to be the only person on earth who still writes a check. Why? Because it takes time and requires thought. You have to write out the amount of the purchase not once, but twice. Let's face it -- how many silly purchases at convenience stores and drive-through windows could you avoid simply by making paying for them a hassle? Shred the debit card.
4. Give yourself an allowance
Put yourself on an allowance and carry just your weekly allowance on you. Reload once a week. Reload means you replace what you spent, so if your allowance is $50 and you only spent $30 this week, you reload $30 so you start the next week with $50; there is no carryover.
5. Cash only nights out
Nothing sucks money out of your pocket like a night out with friends. Take just the cash you budget for entertainment, and nothing more. No credit card or debit card allowed. No bar will let you start a tab without a card, so you'll be protected from the nasty end-of-the-night bar bill surprise. When you pay cash you see just how expensive a dozen shots of tequila are, which could save you from more spending stupidity later…
6. No drive-thru dining
When was the last time you set foot in a fast-food restaurant? If a meal is not worth parking the car for, how can it be worth eating? Go home and have a real dinner.
7. Grocery lists are not just for Mom
Make a list, and stick to it. Avoid convenience food. Don't buy more fresh food than you can use in a few days. Many foods (like pasta) make excellent brown-bag lunches, so cook a little extra.
8. Set a goal
Why are you saving money? Are you setting up an emergency fund, paying off debt or saving up for a big-screen? Whatever your motivation, set a clear goal and work towards it. Open a high yield savings account or money market account. Track your progress to stay motivated.
Earning more money is one option, but keep in mind that a dollar earned is about 65 cents got. A dollar saved, though, is a dollar got. Here are some tips to help you plug the holes in your pockets and keep more of what you make. Pick a couple that work for you and implement them right away.
1. Track expenses
When your $20 disappears and you don't know where it went, that's a problem. Tracking spending identifies where the leaks are. Write down every penny you spend, where it was spent and why. How many of those expenses would be considered "necessities?"
2. Change small habits
The key to successfully curbing unnecessary spending is to do it a step at a time. If your expense tracking reveals a $300 monthly lunch habit, you probably won't be successful if you try to quit buying lunch cold-turkey-on-rye. Ease into it by brown-bagging two days a week. Then make it three. If you are making two trips a day to the coffee house for lattes, cut it back to one, then just a couple of times a week.
Identify a new target each month, and attack! It won't take long to strike a budget-life balance you can live with.
3. Write checks
That's right, I want you to be the only person on earth who still writes a check. Why? Because it takes time and requires thought. You have to write out the amount of the purchase not once, but twice. Let's face it -- how many silly purchases at convenience stores and drive-through windows could you avoid simply by making paying for them a hassle? Shred the debit card.
4. Give yourself an allowance
Put yourself on an allowance and carry just your weekly allowance on you. Reload once a week. Reload means you replace what you spent, so if your allowance is $50 and you only spent $30 this week, you reload $30 so you start the next week with $50; there is no carryover.
5. Cash only nights out
Nothing sucks money out of your pocket like a night out with friends. Take just the cash you budget for entertainment, and nothing more. No credit card or debit card allowed. No bar will let you start a tab without a card, so you'll be protected from the nasty end-of-the-night bar bill surprise. When you pay cash you see just how expensive a dozen shots of tequila are, which could save you from more spending stupidity later…
6. No drive-thru dining
When was the last time you set foot in a fast-food restaurant? If a meal is not worth parking the car for, how can it be worth eating? Go home and have a real dinner.
7. Grocery lists are not just for Mom
Make a list, and stick to it. Avoid convenience food. Don't buy more fresh food than you can use in a few days. Many foods (like pasta) make excellent brown-bag lunches, so cook a little extra.
8. Set a goal
Why are you saving money? Are you setting up an emergency fund, paying off debt or saving up for a big-screen? Whatever your motivation, set a clear goal and work towards it. Open a high yield savings account or money market account. Track your progress to stay motivated.
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