In these tough economic times that we find ourselves in, one of the most effective ways to climb out of debt, is by reducing our personal spending. Here are some hot tips to get it done:
1. Leave your plastic at home.
Referring to credit cards as "plastic" probably isn't a wise idea. Too often we hand over credit cards to store clerks, forgetting that we're spending money. The purchase is reduced to some figures on our monthly credit card bill. Limit your credit card purchases to emergencies and big purchases. And instead of carrying ten credit cards with you at all times, carry one. Basically, if you can't afford to buy something with cash, then don't buy it with a credit card.
2. Carry a minimum amount of cash.
Basically, if you don't have the cash with you, then you can't spend it! It's OK to carry a little extra with you, so you won't be stranded when you need to make small (but necessary) purchases. But there's no need to carry 0 with you, if you're heading out to the convenience store for a pack of gum. And avoid substituting checkbooks and credit cards for cash. Spending cash is more tangible way of making purchases, than writing out a check or handing over a credit card.
3. Make a monthly budget (and stick to it).
Make a monthly budget that includes both small and large expenses. Even include expenses that seem insignificant. A few cents here and there add up, and can make the difference between being in the black or red. Besides big and small expenses, make sure to included non-discretionary spending (i.e. utilities) and discretionary spending (i.e. sodas).
4. Reduce your discretionary spending.
Discretionary spending is stuff that you choose to spend money on. In modern society, the vast majority of spending is discretionary, and quite frankly-unnecessary. If you're truly honest with yourself, you don't REALLY need to buy those hamburger earmuffs or chewed gum magnets that you've had your eye on. Here are some common items that will help you to significantly cut your discretionary spending:
magazines: you can get most of the information on the Internet now
cable: wait for the DVD to come out, or better yet-watch less TV!
cell phone: landline phones are much more affordable
restaurants: eating at home will not only save you money, but can also be healthier
books and DVDs: check out books at the library, and rent DVDs
The list goes on and on. Analyze your monthly spending and determine which expenses are unnecessary.
5. Make a grocery list.
This will prevent buying foods that you weren't planning to purchase. Without a grocery list, your food costs can be significantly higher. Also, clip coupons and look for specials. Cutting your expenses will help you to survive tough economic times when the nation's economy is struggling you're between jobs, and so on. When coupled with an increased income, you'll be on your way to being back in the black.
