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7 Ways to Spend Less and Like It

Monday, September 24, 2018

By Barbara Pronin If it sometimes seems as though money disappears, it’s time to figure out where it went – and to take some baby steps to spend your money mindfully.

Consumer finance gurus at The Motley Fool offer seven good ways to do that – and use the savings realized from your new thoughtfulness to beef up your savings account.

Track your spending. When you go on a diet, you keep track of every calorie. In the same way, start your financial diet by tracking where every dollar goes. For at least 30 days, carry a notebook and pen and keep track every time you open your wallet. Reviewing your notes at the end of a month should give you good idea where your money is going and where and how much you can cut.

Set a budget. Use your newfound understanding to make a plan for spending more reasonably; how much for needs, how much for wants, and how much for savings. The hard part is sticking to a budget, but having one in place is a good beginning.

Consider going cash only. There are two advantages; first, people tend to spend less freely when they have the visceral experience of handing over cash instead of a card. Second, once you run out of cash, there is nothing left to spend.

Use an envelope system. Divide your cash for the month into envelopes marked for groceries, bills, household expenses (such as cleaning or other services), savings and optional spending (from lattes to clothes and other wants.)

Freeze your credit cards. Literally! Avoiding the use of credit cards for a while is a good way to get control of your spending. If this is hard for you, freeze the cards in a block of ice for a while so you can’t use them until the ice thaws out.

Make a 24-hour rule. For purchases over $100, make it a rule to think it over for a day before making the buy. It will give you time not just to debate it, but to look for a better price.

Make saving a game. Putting your change in a piggy bank every night or putting aside the savings from using coupons or discounts can be a gamechanger. Seeing the pile grow higher becomes so rewarding, you’ll feel triumphant every time you bank it.

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