Six Ways to Become Money-Wise

March 12th, 2008 • Related • Filed Under • by Debbie Dragon

Most people are feeling the crunch of the economy. Income that used to be just enough to get by suddenly doesn’t seem to stretch as far. There are things you can do to become a little more money-wise, and help you live comfortably on less money. Whether you believe it at first glance or not, chances are there are areas in your life that you can cut back on spending, which can make it easier, too.

Living on less, or thrifty living, doesn’t necessarily mean you have to do without everything, though.

Know where your money is currently going. Before you can make any changes for the better, you need to know where you spend your money. Go back over your spending for the last month or two and see how much of what you spend goes to necessities and how much goes to satisfy “wants”. Are their things that didn’t satisfy either? You will probably find areas in your regular spending that can be reduced just by looking at your current habits; and that money can be used someplace more important- like to pay for groceries or a bill.
Buy store brands. Do you really need to have a box of cereal with the brand name on the box? Many of the store brands are exactly the same as the brand name version, but can save you considerable amounts of money.
Use Cash. Whenever you physically spend cash instead of swiping your debit or credit cards, you feel it more. People who buy with cash will almost always spend less than people who are buying on their debit or credit cards.
Look at a different way to pay for your mortgage. If you pay once a month, you should look into paying for your mortgage twice a month (every other week). Simply break up your monthly payment into two payments and pay that way- it can often save you years off the end of your mortgage term (and thousands of dollars in interest).
Use the 24 hour rule. If ever you are out and have the urge to buy something, make yourself wait a minimum of 24 hours before you make the purchase. If after 24 hours you still really need/want the item, then you can consider buying it. But by enacting the 24 hour rule, you will overcome most impulse purchases.
Pay yourself first. Before you have a chance to spend or pay bills, transfer a portion of your income to one of the many high interest savings accounts on the market.