by Lou Belcher

Created on: March 18, 2009

How to stop wasting money and build your savings.

When you stop wasting money, you naturally begin to build your savings. That is, you build your savings if you don't find a place to spend the money you stopped wasting. It's important to save money. Here's how to stop wasting money and build your savings:

1. Keep track for a month of every penny you spend. Carry a small notebook with you. Every time you spend, write down how much you spent and what you bought. Don't just write down cash purchases. Write down everything including cash purchases, credit card purchases, on line purchases, checks you write, etc.

2. At the end of the day, go through your list and make any additional notes you feel will be helpful when you analyze your purchases at the end of the month.

3. At the end of the first week, you should begin to see some patterns emerging in your list. For example, you buy a paper every morning and you buy a fancy coffee on the way to work. At ten, you hit the vending machine for some cookies and a soft drink. A couple of times a week you go to the book store, have coffee and usually buy a magazine or two. On weekends you go to at least one movie, etc. Many of us are creatures of habit and we tend to spend our money on the same things each month. Keep good notes so you'll be able to identify these patterns.

4. At the end of a month, sit down with your list. Pick out one item on your list you can live without. Eliminate it from your purchasing. For example, maybe you buy one magazine a month. Once you read it you throw it away. Instead of buying that magazine, go to the library once a month and read it there. Contribute the money saved to your savings account.

5. Now look at purchases on your list that you can modify. For example, if you buy fancy coffee every morning, buy regular coffee four days a week and fancy coffee once. Contribute the savings to your savings account. Or, if you buy a newspaper every morning, subscribe to it. It's cheaper. Contribute the savings to your savings account. If you buy from vending machines, take snacks to work and take your lunch instead of eating out. You get the idea. Make some modifications to your regular purchases to save money and contribute the savings to your account.

6. Here are some other ways to save: 1) turn off lights you are not using; 2) avoid fast food restaurants; 3) buy groceries and make several meals from one item. For example, bake a chicken, eat some, make a casserole with some, make chicken salad with some, etc.

The most important part of saving is to actually put the money saved into a savings account or some similar account where it isn't quite so easy to spend.

Another way to stop wasting money and to start saving is by paying off your entire credit card balance every month so you don't waste money on interest. If you have trouble paying off your credit card balance each month, stop using your credit cards. You are spending too much money if you are relying on your credit cards as income. Try to embrace the concept of only buying what you can afford and you will find that you will not waste as much money and you will eventually be able to build your savings.

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