My basic money-saving strategy goes like this: Decrease your expenses, and increase your income. That’s really all there is to it.

While the concept itself is not at all complicated, in reality it can be difficult to actually put into practice because it requires you to change your poor spending habits. But complicated? No, not at all.

So how do you actually go about following this money saving technique? What, specifically, should you do?

Let’s use the following analogy. If you were trying to lose weight, you could accomplish that by going on a diet and not doing any additional exercise.

You could also accomplish the goal of losing weight by eating the same as you’re eating now, but doing a lot more exercise to ensure weight loss. However, the best, fastest and healthiest way to lose weight would be to do both: eat healthy food in moderate proportions AND exercise regularly.

Similarly, you’ll get out of debt and maximize your financial results most effectively if you reduce your expenses AND increase your income at the same time.

Reducing your expenses is fairly self-explanatory. Spend a day or two reviewing the past 60 days of expenditures in your check register, or if you haven’t kept good records, start tracking every single penny you spend, thus compiling a list of your ACTUAL expenses.
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Then you look at the list and determine what can be reduced or cut out altogether. Consider ways to becoming more frugal; clip coupons, cancel subscriptions and memberships you don’t need – and so forth.

If you can stick to a new streamlined budget that alone will dramatically increase the amount of money you have left over at the end of each month. But if you really want to TURBO-CHARGE your progress, you need to find a way to increase your income, too.

That part is a little less self-explanatory. If I already have a job, and if getting a raise isn’t an option, then how am I supposed to make more money?

There are actually many ways. Consider working overtime hours at your job. Is there an at-home business you can do on the side? Do you have things you could sell on eBay for a profit? Do you have skills that can be utilized for consulting or freelance work?

Get creative; the sooner you can pay off your debt, the more quickly you’ll be able to concentrate on building wealth!

If you’re married, even if you’d rather not have both spouses working full-time outside the home, consider your options. If Mom is home with the kids during the day, she may be able to devote some time to an online-based business.

Debt-to-Income.com shows people hundreds of ways to make more money at home. Reading these real life stories may be just what you need to get your creative juices flowing.

Either reducing your expenses or increasing your income will help your savings situation. But if you do both at the same time, your financial reality will improve at a much faster pace.

Do both, earn more – spend less. It’s the best money saving technique you’ll ever hear. While the strategy is simple, no one is saying it’s easy. However, the effort you invest now to get out of debt will be well worth your time and attention.

Stuff happens. And it usually costs money. If you don’t have an emergency fund equal to three to six months worth of basic living expenses, you’re living on the edge. There’s no time like the present to get started.None of us have the ability to foresee the future or predict the hurdles which lie ahead of us. This makes building an emergency fund a financial priority. People who are living on a lean-and-mean budget will have the toughest time setting aside money for emergencies. If it’s possible to squeeze out another $40 or $50 each month and put it in a money market account, it’s worth doing.

Establishing an emergency savings account is vital in good times and in bad. The purpose of the fund is to sock away three to six month’s living expenses. But this money could also be used when you’re staring at major, unplanned expenses such as a car breakdown or a leaky roof.

Housing a small rainy day fund should be a vital part of an individual’s financial goals. This is of high importance if you don’t already have readily available funds in your account for covering any unanticipated expenses. They provide financial security because they give you funds to fall back on if you become ill, or if you or your spouse loses your job, you incur large medical bills, or have an unexpected large bill such as a major car or home repair. You do not want to end up in a situation where you have to buy daily necessities on credit.

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Saving your money in a small account for emergencies is definitely a better alternative to taking a loan or cashing in your long-term investments. If you take a loan, there is the additional burden of paying interest. Encashment of your investments before maturity means not only will you lose out the interest, but also some part of the original investment. This will also set you back significantly in your overall financial plan.

I echo the idea of treating the emergency fund as a bill, put the money away and don’t be tempted by the latest sale. Success at building an emergency fund depends on consistency of saving money on a regular basis and keeping this money separate from the general savings account. Otherwise you will be tempted to dip into these monies even if you simply run over your budget at a certain point.

The size of the special savings account will depend on your personal situation. I always advice my clients to keep between three to six months salary in the reserve. But you will have to decide on an appropriate amount based factors such as your Dependants and fixed monthly expenses.

Seriously you dont…

I advise people on personal finance including banking, budgeting, saving, and investing. How to save your money-tricks, how to budget, and using credit cards, etc. How to make more money by investing? What are stocks? Bonds? Mutual funds? What can you do to start today and maximize returns?

All you need is three ingredients, income, discipline and time. Chances are, you already have two of them, income and time. All you need to do is add the third, discipline.

There’s a saying in economics “expenses rise to meet income”. This means money that’s easily available to you is certain to be spent. That’s why most people’s paychecks disappear before their next payday. They get used to having a certain amount to spend, and habitually run down their bank account.

Here’s how it works: Say you start with nothing, invest $500 (of your income) a month (a healthy discipline), and let your money ride (over time) in diversified investments. Long term, the stock market returns at least 10% annually. Assuming a 10% return, you’d have $102,000 after 10 years, $380,000 after 20 years, and $1.1 million in 30 years.

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It REALLY pays to start now. Check this: if you save 100 bucks/month until you’re 30 (for only 10 years, then you never save money again), and your dumb friend starts later–saving 100 bucks/month from age 30 to 65 (that’s 35 years compared to your 10 years)–you will have way more money (over $100,000 more) than him at age 65. Start early and you will be rich.

Here’s the bottom line, like it or not: The fate of your retirement, your comfort in older age, probably lies in your commitment to the concepts laid out above.

It’s not easy. But it’s very, very simple.

Do you ever wonder where your spending money goes or how you can spend so much on practically nothing in so little time? In the old days people brought their paychecks to the bank, deposited most of the money and pocketed the rest in cash. The cash was supposed to last until the next check. If it didn’t, it was an obvious cue that too much money was being spent.

Fast-forward to these days when paychecks are deposited electronically and we stuff our pockets with debit and credit cards. Beaten-up dollar bills and heavy coins never dirty our hands. It’s so much nicer than the old days. Unfortunately, it makes it too easy to bust the budget.

Without that dwindling pile of cash it’s harder to recognize how much is being spent. Sure, you can log on and look at your bank account every day, but most people probably don’t. When they finally see their balance they think, “no way!” More than likely it’s not the mortgage that’s killing them; it’s the daily money drain. If that scenario fits your life, the seven-day money challenge may help you get on track.

Use this challenge to give yourself a wake-up call to those who don’t realize how much they’re spending. I ask some of my clients to guess to the best of their ability how much cash they’ll need for a week’s worth of spending. It’s just the day-to-day stuff like gas, groceries, going out for meals. The usual outcome is they’re out of money by Wednesday.”

Learn your weaknesses. “I was trying to go from Monday to Monday, I carried a little notebook and would write it down if I stopped for coffee or went to the drugstore. Wednesday night I went to buy gas and I didn’t have enough cash. I had to resort to my credit card to get me through the rest of the week. I was shocked and a little disappointed.” Thats what some of them say.

The Money Diet: READ

I always encourages some clients to employ the notebook method to monitor their spending for a short period of time. If you need to get a handle on your budget before trying the challenge, use our handy work sheet. I have seen many people set financial goals for retirement or the kids’ education only to watch them fall short or even derail because the budget isn’t under control.

“It’s the variable expenses that are always the problem. It’s fairly easy to account for fixed expenses. It’s the daily routines that can make up a large percentage of the money that’s left unaccounted. You can’t expect to lose 30 pounds overnight, and you can’t expect to resolve years of lax spending habits in a week. But if it makes you think twice about spending $5 on something you really don’t need, you’re making progress. And, just as with a diet, there are those determined individuals who will make the change permanent and there are those who will slide back into their old habits.

Get ready in three steps:
If you’d like to get a handle on your spending habits, all it takes is a small notepad and a bit of determination.

1:Figure out how much cash you need to cover a week’s worth of gas, groceries, entertainment, dinner on the town, breakfast, books, music CDs, cosmetics, gifts — the whole lot of casual expenses.

2: Be honest. Don’t deliberately overestimate so that you’re sure to have enough cash to get through the week.

3: Set the anticipated amount aside and don’t use debit or credit cards. If you get through the week with the cash set aside, congratulations! If you need to make a trip to the ATM, it’s OK. Review your purchases and see where you could have trimmed costs. This is about developing a mind-set where you seriously consider daily cash expenditures. It can lead to more money in your savings account and long-term financial plans that stay on track.

Obviously the answer lies somewhere in the middle– but where? We take pride in making responsible choices for the future instead of thinking only of today, but do you ever feel like you’re going too far? Not appreciating the present enough?

I hear that suggestion a lot regarding how much money frugalites and penny-pinchers spend: that we’re not enjoying life enough because we’re not willing to spend much money. The thing is, I don’t think that spending more money would make me noticeably more happy! I mean, certainly there are some things that I could spend more on and enjoy– probably more expensive vacations, maybe going out to eat more and/or at fancier places– but in general I’m very comfortable with the way things are. I find ways to enjoy myself that are just good values for the money… and if there’s something that comes up that’s expensive but would be really wonderful, I weigh it carefully but am pretty good about letting myself go for it if it’s worth it.

However, it’s the flip side that concerns me. The amount you save is a combination of how much you make and how much you spend, so it follows that to save the most for tomorrow you need to make as much money as you can today. A lot of personal finance bloggers like to stress the importance of increasing your income as much as possible.

For me personally, while I’m not earning as much as I could if income was my only priority but I’m still doing a job I like and one I feel is good for society. The thing is, I’ve never really envisioned myself following a standard “career path”. Yet most of the other options will likely pay substantially less, in some cases perhaps as little as half as much. So the question is, how long should I stay at a good-paying job that I’m fairly but not completely happy with? I definitely want to try other work, but don’t I have plenty of time for that later on?

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There are many arguments for doing higher-paying work first– getting money into savings and taking advantage of compounding interest, paying off debt– and putting off more satisfying but lower-paying work for later, maybe even until retirement or an early retirement. (For just one example, it’s the classic recommendation for socially-minded lawyers: put in a few years at a big firm, rake in the dough, pay off your loans and save up, and then later you can give it up and go do your public interest law.) But the approach worries me in a lot of ways. What if I get too used to the benefits of making my current income? How do I decide when I’m financially “ready” to switch to a lower-paying job? And what if when that “ready” comes, it coincides with the time in my life when I’m looking to buy a home, get married, have children, etc, and suddenly the financial hit seems a lot less doable?

So maybe it’s better to try different and more challenging options now, when I’m young and more flexible and I know I can pull it off. Besides, who knows what unforeseen things could happen in my life that might constrain my future decisions? I’m sure I’ll regret it if I don’t try working at other kinds of organizations; I would hate to look back and realize that I missed out on great opportunities only because I was too concerned about the size of my retirement account. There’s a lot to be said for seizing the moment.

I have a personal goal to let concerns about money affect my choices as little as humanly possible. The hard part is finding the best way to do this. Working to save as much money as I can is one way to help free me from money concerns later in life, but it means putting money squarely in the center of my decision-making process today. If I try not to worry about money and income in the present, that will make things harder in the future. It’s so hard to figure out where the right balance is.

Do you struggle with trade offs between earning money and being happy and fulfilled? While I doubt many people have precisely the same concerns as me, I feel like this dilemma is probably applicable using a lot of different measures of happiness and satisfaction: pleasant vs. unpleasant work environments, a more personally satisfying career vs. a higher-paying career, a job that has shorter hours and/or is more flexible vs. a job that eats into your personal life but pays well, even working vs. staying home with kids. How do you make these kinds of decisions in your life?

Does it sometimes seem as though you cannot afford to do things because your financial obligations are holding you back? If you find that you are asking yourself these sorts of questions, perhaps you should take a look at your financial situation and assess whether you are practicing good personal finance management or not. Good personal finance management spends within their income, plan for the future and solve financial problems as they arise. Poor personal finance management pay more, do without and fall behind. If you find yourself in the second category, you can do something about it. You can learn to take charge of your finances by planning your personal finances.

Planning your personal finances doesn’t always come naturally, and even if you’re just beginning to take your financial matters seriously, then you likely need a few personal finance tips.

Evaluate your current financial situation. One of the most important goals for most people is financial independence. Collect accurate information about your personal financial situation. Calculate your net worth which includes the real estate, saving and retirement accounts, and all other assets. This will help you decide how much money you can set aside for meeting future needs and goals.

A basic personal finance tip is to make a budget. A personal finance budget is information made up of your income and expenses and the more accurate this information is, the more likely you are be able to meet your goals and realize your dreams. A personal finance budget should be made for at most one year at a time and include a list of your monthly expenses.

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All expenses must be included. To be sure of that go through all your paid bills, check register and receipts to find expenditures that recurs every month and expenditures that happen less frequently. Personal finance budgeting requires some small sacrifices. To be able to make good personal financial decisions and set priorities, you must know where your money is actually going. Start your budget and accomplish your goals.

Get an electronic bill pay. This is a very convenient way to pay your bills. You pay them electronically, by direct withdrawal from your bank account. The transaction is processed immediately. You can even link your bill pay service to your personal finance budget, so that your expenditures are automatically entered in the appropriate category. Personal financial management can be really easy.

Make an investment and finance plan. Now that the fundamental state of your personal financial security has been established, the time has come for the more prosperous part of your personal financial life. You need to make a personal finance plan of what you really want in life that money can buy. Your personal financial plan can be as simple or as detailed as you want it to be. Find out how to finally start to implement this plan and get the money to finance it. This is the long term part of your financial. This journey is the most interesting and exciting part of personal financing you can have toward financial freedom.

You can prepare for a secure personal financial future by following these simple tips. When you take control with your money, you don’t have to worry about debt taking control of you.

Are you short for month at the end of each month? Do you have 5-10 credit cards, all maxed out to the limit? Do you forget to pay your bills on time? If you have answered, “Yes,” to any of these questions, don’t feel bad and don’t worry. I have some tips that can help you improve your financial picture: Create a Bill-Paying System

The first thing you’ll need to do is to go out and pick up some colored hanging folders. If you don’t have a file cabinet, get a file box that you can find in any stationery store or discount department store. They’re very inexpensive. Then, make a folder for each expense. Use one color for your bank statements, another for your utility bills, and another for credit cards. Keep the system pretty simple or complexity could let procrastination) take over.

Each day when your mail arrives, separate it immediately into what you don’t need and want to throw away and your bills and other things that need attention right away. Do the things that are needed and either pay the bill right away or put them in a central place where you can retrieve them when the money is available for paying the bills. This could be the front of a desk drawer, for instance, or even a basket on top of your desk. Just be sure that nothing goes into that basket besides your bills.

Online banking is a great way to streamline the bill paying process. Bank security is top notch, so the question of you having a problem online is really out of the equation. The chances are very slim. So, what you do is you take each bill that you receive and you put the information needed into the online banking account. You don’t have to do this all at once. Wait until your next bill comes in and do it one or two at a time. That way, it seems less daunting, and remember, you only have to do it once. After all the information has been entered, paying a bill becomes as simple as clicking a button, a mouse button, that is.

When you’re finished paying your bills, be it online or off, put the paid bills with the date of payment written on the front, into one of the colored file folders. That way, when tax time comes around, all your financial records will be at your fingertips.

Don’t carry around huge wads of cash or a debit card linked to your bank account, either. If you prefer the convenience of plastic, open a separate bank account and put a monthly “allowance” into it for yourself. When the money’s gone, you’ll just have to wait until next month to get more. This should help you to budget your spending and hold back on those impulse purchases a little.

And if you want to buy something, decide whether you need it or just simply want it. If you think you need it, just walk away and take 25 hours or longer to consider the purchase. Once it’s out of your site, you may find that it’s really a want, disguising itself as a need.

Before you pay any bill, any expense for the month, you should always be paying yourself. Ten percent of your income, every time you get money or a paycheck, should go into a savings account. If you don’t have a savings account, get one and never, ever use it except for depositing. Your savings account is for huge expenses, like buying a house, repairing your car, or retirement.

Put at least one of these tips into practice and see how well it works for you. I guarantee that you’ll be back to try another.

None of us have the ability to foresee the future or predict the hurdles which lie ahead of us. This makes building an emergency fund a financial priority. People who are living on a lean-and-mean budget will have the toughest time setting aside money for emergencies. If it’s possible to squeeze out another $40 or $50 each month and put it in a money market account, it’s worth doing.

Establishing an emergency savings account is vital in good times and in bad. The purpose of the fund is to sock away three to six month’s living expenses. But this money could also be used when you’re staring at major, unplanned expenses such as a car breakdown or a leaky roof.

Housing a small rainy day fund should be a vital part of an individual’s financial goals. This is of high importance if you don’t already have readily available funds in your account for covering any unanticipated expenses. They provide financial security because they give you funds to fall back on if you become ill, or if you or your spouse loses your job, you incur large medical bills, or have an unexpected large bill such as a major car or home repair. You do not want to end up in a situation where you have to buy daily necessities on credit.

Saving your money in a small account for emergencies is definitely a better alternative to taking a loan or cashing in your long-term investments. If you take a loan, there is the additional burden of paying interest. Encashment of your investments before maturity means not only will you lose out the interest, but also some part of the original investment. This will also set you back significantly in your overall financial plan.

I echo the idea of treating the emergency fund as a bill, put the money away and don’t be tempted by the latest sale. Success at building an emergency fund depends on consistency of saving money on a regular basis and keeping this money separate from the general savings account. Otherwise you will be tempted to dip into these monies even if you simply run over your budget at a certain point.

The size of the special savings account will depend on your personal situation. I always advice my clients to keep between three to six months salary in the reserve. But you will have to decide on an appropriate amount based factors such as your Dependants and fixed monthly expenses.

Last month I had made a post “Needs and Wants, getting REAL about Money” which attracted a great comment by Althea. I immediately thought that the comment itself would make a good post, so here it goes.

“I liked your article and it’s so true. The following information was taken from the book “The Insider’s Guide To Saving Money” by Michael Ellenbogen. “Cutting back does not necessarily mean giving something up all together, but rather finding a less expensive way to do it. Let us say, for example, that each morning you stop by your favorite coffee shop and buy a cafe latté. It costs $3.00, or $15.00 per week. Another option is that you could stop by a local convenience store and buy your coffee for $1.00. You would save $10.00 per week or $520.00 per year. Not bad for a minor adjustment. If you took the $10.00 savings each week and invested it at a 5 percent return, after 20 years you would have over $17,600.00. Not bad for altering one buying habit. Most people have more than one cup of coffee a day. Just think of those savings. You could even make your own coffee at work, which would save you even more.”

This book was a real eye opener, on the amount of money I have been wasting on cigarettes and so many other things. The savings added up quickly. I will be saving over $86,000.00, over 20 years because I stopped smoking 1 ½ packs per day”.

You and you alone, are ultimately responsible for your financial well being. Your decisions will affect how you live on a day to day basis and in the long term. Handling the financial issues associated with starting out, establishing a household and having more responsibilities can be stressful.

A solid financial foundation can help you spend less time and effort on your finances so you can devote your time and energy to other important matters like your job, your family and your future.

The only reason for earning a fat salary is not to blow it away for the good times; a sensible option can be to save some for future when destiny decides to pick on you. Putting some money aside in a savings account is a safe bet, as the ‘market’ can be a tricky territory to tread!

Reaching a point of financial security is a process that takes time, effort and perhaps some sacrifices. However, the results are worth it. By starting early, you can put time on your side. By doing a few things right from the beginning, you can make that process easier and minimize the sacrifices you may be forced to make later.

Save what you do not spend. After you have paid your bills each month, move what is left over to your savings account. You will probably want to keep some funds in your checking account to cover unexpected expenses, but by moving excess funds to your savings account, you will be accumulating assets and probably earning more that what you would have earned if you left your excess funds in your checking account.

Opening a savings account is easier than gobbling up a delicious piece of cake. All one has to do is to walk up to any high street bank and open an account. There are different types of accounts for different needs; you can easily select yours according to your means and requirements. The good life will be here before you know it. Putting a little money away today means big dollars for later.

The interest rates that you will get, differs from bank to bank and account to account as well. The rates will be slightly lower in an easy access savings account but then you will get instant access to your money whenever you need it and no notice or penalties for on the accounts.

As for now all I can say is no one can foresee the future and one should be ready to tackle the issues waiting for you in the future (yes there will be a few, life is not a fairy tale) and by having a plan B to every problem that raises its head, you can actually give your life a “…happily ever after” ending.