How to Spend Less and Save More Every Month

With incomes remaining flat or increasing very little for most families, just about the only way to save more money and reduce debt is to cut spending. The idea of cutting back may not be relished by any members of the family, but it can be easier than most people think. Once the savings are realized and debt begins to disappear, some people may even wonder why they didn’t start sooner.

Getting started

Nobody can just jump in and start spending less and saving more. There are a few initial steps that should be followed to ensure success.

*Set goals – Whether the family wants to save enough for a new car, a vacation or just to pay off some debt, the goal should be clearly defined with a timeline. A goal serves as a reminder to everyone as to why certain sacrifices are being made.

*Create a budget – Write down the amount of income brought in by family members and then figure how much of that income is committed to monthly bills and other necessary expenses. It may be necessary to spend a couple of weeks or a month tracking spending by writing down everywhere money is spent. After spending has been tracked, try to find areas that can be eliminated or changed, such as packing lunch for work rather than eating out on breaks.

Start saving

Once spending is under control it should be easier to start saving money.

*Plan on saving – Set aside a certain amount of money every month into an account for savings, retirement, college education or all of the above. Most financial experts recommend putting aside at least 10 percent of income into a savings account. The easiest way to do this is to take advantage of an employer’s option to have funds from a paycheck automatically deposited into a savings account. This way, the money is never received and so the temptation to spend it rather than save is not there.

*Pay down debt – Eliminating debt can lead to even more savings later. In the short-term, some of the money saved from reductions in spending can be applied to the debt in order to get it paid down faster. If more than one account is owed, choose one to concentrate on first, paying as much as possible each month while applying only the minimum to the other accounts. Once one is paid off, pick another one and follow the same steps.

*Expect emergencies – Set aside a little money every month for an emergency repair or other major expense. These unexpected disasters are often what cause people to slide into debt from which they can’t recover.

It seems simple to save money, just spend less than is earned. Doing so often requires finding where spending can be cut and then making an effort to put the money saved into an account for possible future use.

About the Author: Christina Lloyd writes for a website that has useful advice on federal college grants such as Pell grants, as well as tips on how to apply for help towards the cost of education.