Finding ways to reduce expenses and spending will enable you to start tipping the scale toward more money coming in than going out. Here are some tips to help you get started.
Is the item I am buying a need or a want? Groceries, housing and clothing are needs. A high-priced restaurant or expensive vacation are wants.
Focus your spending on needs and avoid “just for fun” shopping. To prevent overspending carry only small amounts of cash and leave credit cards at home.
Use lists and plan ahead to avoid impulse buying. Purchase only what’s on your shopping list and don’t buy just because something is on sale. Set money aside regularly for large purchases.
Pay your bills on time to avoid paying late fees, extra finance charges or the cost of having utilities turned back on. Using online bill pay can help.
Have an emergency fund to pay for unexpected expenses like doctor bills or car repairs, instead of being forced to pay with credit cards. Experts recommend 2-3 months of take home pay or 3-6 months of living expenses in an emergency fund.
Steps to building an emergency fund:
Once debt is paid off, continue adding to your emergency fund.