Smart Spending
Learning to save what you earn and be responsible about your purchases will help keep you out of debt. Some debts, like student loans and a mortgage, may be unavoidable and can actually help you build a good credit history if you repay them responsibly. Other types of debt, like credit cards or consumer loans, should be taken out in moderation and managed carefully. In addition to reducing your debt, you should begin saving as soon as possible. The earlier you start saving, the more you’ll have when you need to make an important purchase, send a child to college, or retire.
Budgeting
Budgeting doesn’t have to be painful. Creating—and sticking to—a budget is one of the best things you can do to keep your finances worry-free. By developing a realistic budget and following it every month, you’ll be able to build a good credit record by paying bills on time and staying out of unnecessary debt. You'll also be able to save money for important things like purchasing a home, going back to school, or retiring.
Some ideas on how to reduce your spending
Housing
Consider your living situation. Could you save money by having roommates? Living on the coolest street in town may be fun on Friday night, but is it worth the increase in rent? If your parents live nearby, consider moving back home for a year. It may not sound like fun, but if it could reduce your financial stress, it may be well worth it.
Transportation
While having your own car may be convenient and cool, is it really a necessity? Consider taking public transportation to work if it is safe and reliable. Selling your car may allow you to cut your monthly spending and put aside some money from the sale. Just think - no more scalding leather seats or shoveling out snow-covered parking spaces! If you must have your own car, start a car pool with a few co-workers to share gas and parking expenses.
Everyday Spending
The little things really add up. Reduce your daily spending on food, coffee, magazines, CDs, etc. Cut out the thing that are not essential, and look for cheaper alternatives to what you can't live without. Your employer or health insurance provider may offer discounts on gym memberships or weight loss programs. Reduce your monthly expenses on cable TV, Internet access, cell phone plan, etc. Call the companies who provide these services to you, and ask if they have less expensive alternatives. Shop around for a better deal, but beware of getting locked into a long-term contract unless you are certain you can make the commitment.
Budget Worksheet
To create your worksheet, you’ll need to know or to estimate your income and expenses. Before you start, take a look at your checkbook record, pay stubs, bills and receipts to help you make accurate estimates.
