Practical Ideas for Cutting Spending

You probably don't have enough money for everything that you want in life--which is the reality for most people. This means you must make choices. A good first step in making wise choices is to exercise control over spending.

Controlling spending doesn't have to mean major sacrifices. Simple changes can help you afford the things that are most important to you--for example: your choice of housing, an early retirement, or college education for you or your kids. It also means you'll be more likely to be able to afford the costs associated with coping with a chronic condition, such as epilepsy.

Step One: Know Your Goals

There's no reason to change spending habits unless you have some goals in mind. For example, one goal could be to get out of debt. Another goal could be to always be able to afford good health care and prescription drugs. Try to come up with a few goals that you want to achieve in about a year and those you want to achieve in five or 10 years.

Consider writing down your goals on a piece of paper and keeping that paper in your wallet or wrapped around your credit card. This step may keep you from impulse buying.

Step Two: Try Out Some Tips

Try some of these 20 tips for cutting back on your spending:

1. Separate your needs from your wants. Make sure that your limited dollars first go toward your needs. Wants should take a back seat.
2. Shop at consignment and thrift stores. You often can find name-brand clothes or appliances at a fraction of their original cost.
3. Shred easy money offers, such as those "convenience checks" that show up in the mail. These checks are not gifts--they're expensive loans. Use one and you've agreed to pay the money back--plus as much as 20 percent interest, or more!
4. Make your own lunch and bring to work or school (at least a few times a week).
5. Bring your own coffee or soft drinks to work and avoid expensive shops or vending machines.
6. Cut back on long-distance telephone calls. Use a timer to limit your time on the telephone.
7. Set a strict limit on holiday spending. (Gifts are quickly forgotten and not worthy of going into debt.)
8. Wait for sales (particularly "end of season" sales) and use coupons.
9. Avoid buying items through rent-to-own stores. The item likely will cost you two to three times what it would cost in a retail store.
10. Shop with a list--at department stores as well as grocery stores. Attractive retail displays can make you forget your needs.
11. Avoid premium cable TV channels.
12. Swap clothes or other items with friends and relatives.
13. Buy only energy-efficient appliances (you'll pay less for electricity).
14. Carpool or use public transportation when available. (If you can limit your driving, tell your car insurance company. Driving less could equal lower premiums.)
15. Use your local public library instead of buying books.
16. Avoid buying clothing that requires dry-cleaning.
17. Save up the money to buy something. Avoid taking out a loan or using a credit card.
18. Avoid buying service contracts on appliances or automobiles; these contracts often aren't worth the money.
19. Don't assume that outlet stores offer the best prices. Compare with retail sale prices.
20. Go to "dollar" movies or rent videos.