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Do  you find yourself reaching the end of the month with less money than you want (or need) to handle all of your living expenses and bill payments?  Maybe you’ve got just enough to pay for all of that, but never anything more for entertainment or a few “extras”…  The problem is most likely that you’re spending more than you make, or at the very least, spending ALL that you make each month.  Here are 4 tips to spending less than you make:

1. Track Where Your Money Goes.  If you come up short every month and aren’t keeping track of where your money is going, you have no chance of correcting the problem.  Get a memo book (the kind kids use for assignments) or spreadsheets, use mint.com, or Quicken… anything you want as long as you keep track of where every $1 goes.  You may discover at the end of the month that you’ve spent $47 on candy bars, donuts or coffee; another $75 on “extra” purchases made at the grocery store because you stopped on the way home three extra times during the month, or other purchases you wouldn’t remember if you hadn’t been keeping track.  Focus on eliminating these non necessities and giving yourself back that money.

2. Use Paper, Not Plastic.  At least until you’ve got your spending in check, get into the habit of paying with actual cash instead of credit cards or debit cards.  You have to physically have the cash on hand, and count it out which is a better reminder of what you’re spending than simply swiping the plastic through the card reader in the checkout line.  You can’t keep track of where the money goes when you swipe a card, so use cash.  When you spend on credit, the $20 payment per month may not seem like much at first, but just wait until you’ve used several credit cards and the minimum payments are in the “several hundred dollar” range per month… you’ll wish you hadn’t swiped the card at that point!

3. Remember Financial Obligations That Are Not Paid Monthly. Just because your car insurance is set up on a quarterly schedule, or you only pay your homeowners insurance and property taxes once per year, doesn’t mean you get the entire rest of the year to forget about these expenses!  If you’ve got an annual expense, take the total amount and divide by 12 months to figure out how much it costs you on a monthly basis.  Actually SAVE that much each month in a savings account until it comes time to pay the bill – then when the bill comes in the mail, you’ll have the money ready to go versus trying to come up with the entire amount before the due date.

4.  Before Making a Purchase, Stop and Think.  One of the biggest problems people have is buying something on a whim.  You know how you go to the store for a bag of flour and come home with the flour, a few snacks, a bottle of soda and a deck of cards that were on sale in the checkout line?  Retailers count on impulse spending.  Before you put anything on the belt for the cashier to ring up, take time to think about it.  If it costs more than $100, make a rule that says you have to wait 48 hours before buying it – if you still want it after 2 days, it may be worth the money.  Most of the time, you’ll have forgotten about the item before the 48 hours is up!



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