15 Spending Tips

"Practically everyone loves to spend money, but getting something of lasting value is another matter," says the nonprofit Institute of Consumer Financial Education (ICFE), a San Diego based group."Spending money is more exciting when it is carefully planned in advance...but spending without planning usually results in wasted money," the ICFE points out in its personal finance classes and literature.

Millions of Americans, young and old, routinely take on expensive, short-term credit card debt in order to purchase goods and services that they otherwise normally cannot afford. Most American consumers are wasting 20 to 30 percent of their money just because of poor spending habits, such as not taking the time to comparison shop.

It is not just credit-based spending decisions that get people into trouble. Some people, who have either exhausted their credit or ruined their credit rating, have no trouble overspending at all. Cash slips through their fingers so fast that by the end of the day, if they started out with $50, they often have less than $5 remaining. Many people will also have great difficulty determining on what their money was spent. Remember, an overspender is not just an individual who spends more than they earn; an overspender is also an individual who pays too much for things.

Here are some ways to develop improved spending practices:

  1. Write down your detrimental spending practices that you want to change.
  2. Write down how you plan to bring about the changes in each area.
  3. Construct a cash-flow sheet showing income and expenses.
  4. Set up and implement a spending plan.
  5. Manage your credit card use wisely.
  6. Begin collecting and making notes on your cash purchase receipts.
  7. Review all insurance coverage for duplication, higher deductibles, etc.
  8. Save one dollar and all pocket change daily.
  9. Look for alternatives and substitutes to spending.
  10. Use coupons and mail in for rebates.
  11. Wait for the sales; comparison shopping can save more than 50 percent.
  12. Take advantage of rebuilt and used items where practical.
  13. Start doing things for yourself that others were paid to do previously.
  14. Meet with your family members weekly and discuss how to improve spending.
  15. Separate shopping trips from spending trips (when actually making the purchase). Avoid carrying credit cards, much cash, or a checkbook on the shopping trips.

For many individuals, debt is a roadblock to saving money. One easy way to get into the savings habit and still pay off debt is to begin saving one dollar and all pocket change daily. Be sure to do this even on the weekends. It will average about $50 a month. At the end of each month, take the money saved and pay down on a debt. Two positive things have been accomplished—getting into the savings habit and paying off some debt.

This article was submitted by the Institute of Consumer Financial Education, whose Web site provides financial education for all age groups with a special section devoted to teaching children about money

What Why How Where Home