- Stop eating out. For many Americans, eating out is as common—or more common—than cooking a meal. Did you know that “eating out” is a relatively recent trend? A century ago, eating in restaurants was only for travelers and many unsavory sorts. A half century ago, eating at a restaurant was a very special event. These days, many people eat out every day. If you calculate your expenditures for a month of eating out as well as document the food you are eating, you will find that not only are you spending an arm and a leg for food, but you are eating some of the unhealthiest food possible. Better option--cook all of your meals at home in order to save money as well as eat healthier food.
- Review your bills, one by one, and determine ways to decrease each debt. Many of your “fixed” expenses really aren’t cast in stone. Look at your cable bill; you can switch to the most basic cable service and save a little extra money every month. Look at your electric bill; a handful of changes in your daily habits (washing and drying only full loads of laundry, lowering your thermostat, turning off unneeded lights, etc) can save you big bucks over the course of a year.
- Don’t go shopping. For many of us, shopping, going to the mall to hang out with friends or buying things online is an almost every day activity. Try finding other activities to occupy your time, doing a “shopping fast” and look for ways to reduce, reuse, repair or go without.
- Take care of your own service needs. Do you really need to hire someone to mow your lawn while at the same time you are paying to go to the gym to work out for an hour? Can you clean your own pool, home or office instead of hiring these jobs out? If you are following rule number 3 above, you should have lots of extra time to accomplish these tasks.
- Make current spending decisions based on how your life is now, not how it was. For many of us, we develop our spending patterns when our children are young. Things such as buying in bulk, keeping the freezer full, paying top dollar for life insurance, and having a 4,000 square foot house were necessary when we had a houseful of kids. Now that the kids are grown and moved out it is time to reassess what our current needs are. We no longer have the need to buy in bulk, a full freezer could last us for years, life insurance needs change over the years, and a huge house means having lots of unused space that we need to heat, air condition and clean.
- Base your spending on logical, rather than emotional reasons. A whole shelf of library books has been written on emotional spending. The bottom line is to know why you spend and spend logically not just on an emotional whim.
- Make at least two days a week, “no spending” days. This is hard to do for most of us. We automatically spend money just about every day, whether paying bills, buying a mocha or filling up our gas tank. Make it a family project to not spend money for a couple of days each week. This will entail pre-planning (making sure your car has gas prior to the ‘no spend’ days), preparing (taking a thermos of coffee to work instead of buying it at the coffee stand), and making do (if you normally eat out for dinner, you may be raiding the cupboards for sustenance…be creative and see what your family can come up with for dinner).
- Reduce your credit card interest and consolidate your bills. Call your credit card companies and ask for a reduced interest rate. If you have five small credit card bills, consolidate them all on the card with the best terms. If you have a first mortgage and a second mortgage, ask your accountant if it makes financial sense to refinance these into one loan.
- Change the way you shop. Use a list when shopping. Buy only food that is on sale and create your menus off of these specials. Only buy clothes from the clearance rack. Vow to never pay retail. Choose only one day a week to do all of your shopping. Many people go on autopilot when it comes to shopping. They buy the same brands they have always bought and they shop at the same stores they always shop at. Try buying different brands or shopping at discount stores, anything to get off of autopilot and into conscious purchasing.
- Look at alternatives to paying money for the things you need. Try bartering. Try carpooling or riding a bike to work. Try checking out free activities in your community. Try borrowing movies from your library instead of renting them.
Monday, June 2, 2008
10 Ways to Decrease Your Spending
It's one of the basic laws of life…if you want to get out of debt, you need to increase your income and/or decrease your spending. It’s just that simple. Check out these ways to decrease your spending so that you will be able to use the money you save to buy your way out of debt, fund your dreams, and change your life.