If you're trying to increase savings, remember that savings are directly tied to spending - the less you spend, the more you have to save. Some tips to help you get your spending under control include:
- Analyze your spending for a month. Give serious thought to your purchasing patterns, looking for ways to reduce spending. Cut back on how often you dine out or at least go to less expensive restaurants.
- Go over major expenditures also. When was the last time you comparison shopped your auto or home-owners insurance? Have you checked mortgage rates lately to see if you should refinance? Have you reviewed strategies to reduce your income plans?
- Make a spending plan and put it in writing. Budget for all major expenditures, and resolve not to purchase items that aren't in your budget.
- Throw out your credit cards (or at least hide them for a while). Most people find it more difficult to spend cash than to charge a purchase.
- Don't purchase items over a fairly low dollar amount until your second shopping trip. Compare price and value on your first shopping trip. Then go home, think about whether you really need the item, and purchase it on another trip.
- Think carefully before making major purchases. Often, upkeep and maintenance will add to your costs. Do you really need a motorcycle, boat, recreational vehicle, or vacation home? Keep your car for four or five years instead of getting a new one every two or three years.
- Figure out the maximum amount you can afford for a house and then buy one substantially less expensive than that. Not only will you save on your mortgage payment, other costs associated with owning a home will be lower.
Living well within your means is one of the best ways to ensure you have money left over for saving.