n Make a list of expenses, such as mortgage payment or rent, average utility costs (heat, light, water, telephone, etc.), taxes, insurance, outstanding debt such as auto or other loans or payments due, and living expenses, such as food, medical or wellness needs, transportation, clothing, and extras, such as cable TV and other entertainment.
n Subtract fixed expenses from take-home pay to identify funds not already obligated.
n Save before spending by paying yourself first. Young recommends direct deposits, with funds divided and deposited into a checking and savings or investment account. Automatic savings can reduce the temptation to spend.
n Take a hard look at debt and resolve to reduce and eventually eliminate it by paying down and paying off credit cards and auto or other loans.
Paying off credit cards with the highest interest rates first is the typical recommendation, but sometimes paying off a card with a lesser balance can jumpstart the process and boost confidence in retiring debt.
If paying down (or off) more than one credit card, be sure to meet the minimum payments on all other cards, too, and pay promptly to avoid costly penalties and additional fees.
n To save more, track discretionary expenses for a week (or longer) to identify unnecessary expenditures and potential opportunities to save.
Purchasing a box of eight granola bars for $3, for example, rather than single bars priced at 75 cents or $1 from the vending machine can yield a savings. Using a re-usable water bottle rather than buying bottled water saves money and also reduces plastic waste.
Relatively minor changes such as carpooling to work, grouping errands, and sharing transportation to a child’s out-of-town athletic events all offer potential savings opportunities. Save these ‘found dollars’ and transfer weekly to a savings account.
n Shop with a list. Count shopping without a list as recreation. Try to eat before grocery shopping and to avoid shopping when tired or bored. Reducing the number of shopping trips can yield a savings. Remind yourself that sale fliers are advertisements, rather than an invitation to buy unneeded items.
n Pay with cash, a check or a debit card, rather than a credit card. Using a credit card can give people who think of their credit limit (rather than the money that’s on hand to pay bills) a false sense of buying power.
n Keep receipts until bank statements and/or credit card or other periodic statements are justified and/or for income tax or insurance.
n Bank your holiday bonus, future salary increases, and tax refunds toward an emergency fund.
n Start tax preparation early to allow time to identify and take advantage of tax credits and benefits.