Tips to Spend Less than Earn

Spend less than you earn  is a simple concept and yet the most difficult to implement as well.

The only way to save money is to spend less than you earn. This is the one thing that separates those creating wealth from those who live from payday to payday. Your ability to save is determined not by your income, but by your spending. There are couples on six figure incomes who can not save, and people on benefits who can. To start saving, decide how much you wish to save and deduct the money from your income as soon as you receive it, then use these following tips to help reduce that spending we provided here.

• Choose how you wish to use your money

Your income can only be used in three ways. You can spend it now on daily living expenses, spend it in the medium term on things you save up for, such as travel, a new car  and you can spend it in the long term in your retirement. To make the most of your money, you need to work out how much of your income you need to set aside to cover each of these categories and set that money aside on a regular basis.

• Get proactive about managing your money

The trick is to be PROACTIVE about managing your money rather than REACTIVE. People those live from payday to payday are reactive. They get paid, pay their bills, spend money on household costs and enjoying life and, if there is anything left over they put it aside in a savings account.

Any unexpected expenses are covered by using a credit card and there is no money left over for long term goals. REACTIVE money managers let their money  control and limit their lives. PROACTIVE money managers control their money and use it to enable them to fulfil their lives.

•  Grow your own green vegetables

Either in between your flowers or in a container. You could also extend the life of things like Basil by putting the potted containers you buy in supermarkets in some water and a sunny spot.

• Decide what’s important to spend your money on

Separate wishes from needs and avoid impulse buying.

• Do grocery shopping once a week with a list

Preferably when you are not feeling hungry.

• Improve your health as well as your budget

Quit or cut down on smoking, drinking, snacking between meals, frozen foods and fast foods.

• Take your own lunch to work

Or, pick a day in week where you treat yourself and buy lunch.

• Get a handle on ‘leaky bucket syndrome’

Many people are out of money not because they spend what they've on big expensive things, but as they spend little bits here and there. Five dollars here and twenty dollars there adds up to hundreds of dollars each payday. This is like a leaky bucket. Get a handle on where your money goes  and find ways to plug the leaks.

•  Don’t renew subscriptions for non-essentials

Such as satellite TV, magazines or library or club memberships. You can always sign up again next year.

•  Save petrol

Do as many errands as possible in one trip to town.

• Stop using your credit card

Transfer the balance to a low interest card instead.

•  Set aside a small amount of money each week

Use this to cover unexpected bills. One way of doing this is to put your coins into a jar at the end of every day.

So these are some tips to spend less than you earn.Hope you'd like it.Do you have any other idea to make this concept?Wish to share it with us?Then just use the below comment box.

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