by Raven Lebeau

Created on: March 20, 2009

If there always seems to be "too much month at the end of the money," then your money management strategies could use a tune up. Of course big changes like getting a higher paying job or moving to a less expensive home can help your bottom line, but not all of us are realistically able to make such drastic moves. Even if you can't make those large changes, there are small ways to control your everyday spending and help make sure your financial needs are met in the long run. Here are a few ideas for making sure you have enough to pay the bills:

1. Make saving automatic.

Ask your employer about changing your direct deposit so that a portion of your paycheck is automatically deposited in savings each pay period. Even a few dollars every two weeks will add up over time and help make sure you have enough for emergencies.

2. Cut monthly bills and other recurring expenses.

Making the decision to forgo a recurring expense will add up over time without requiring any additional thought or effort. Decide what you can live without in order to save money. For example, could you cut back to basic cable or stop paying for TV altogether? Many people claim they are too busy to watch TV, and yet the average person pays over $100/month for cable.

What about your phone service? Can you choose between a cell phone and a land line instead of having both?

How about services such as having your car washed or getting your hair colored? If you can do these things for yourself instead of paying to have them done, you can save a few dollars every few weeks.

3. Make rules to live by.

Some people are naturally frugal and can handle deciding whether to buy things on a case-by-case basis. If you are always finding your wallet empty, chances are you are not one of those people. This means you will need to remove the decision-making element from each individual purchase. Instead of doing your thinking at the store, do your thinking at home. For example, set a hard-and-fast limit for how much you are willing to spend at the grocery store and never go over that limit, even if it means taking an item out of your cart and putting it back on the shelf.

Other helpful rules to make are "no new clothes," "no decorations," and "no eating out". If those rules seem too tough to follow, then make more flexible versions such as, "no more than $25/year on clothes" or "no eating out except on Friday nights".

4. Compartmentalize your savings.

Some savings accounts, like INGdirect, will allow you to create several different named accounts. You can have a "vacation fund," an "emergency fund," a "Christmas fund," etc. Of course partitioning money this way is a psychological gimmick, but it can motivating to feel like you are saving toward a particular goal.

5. Wait on major purchases.

Instead of buying that big screen TV or those snazzy new shoes on your credit card, save up for your intended purchase. You can use a special savings account as described above or go with the old-fashioned technique of sticking your spare change in a labeled jar. By avoiding use of credit, you are making sure that compound interest is not working against you. If you use a savings account, compound interest will actually be working in your favor, and you will reach your savings goal sooner.

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