by Paola Grochi

Created on: April 10, 2009   Last Updated: April 20, 2009

On these times when everybody is or might be suffering from the effects of the world economic crisis, it is a great time to start acquiring some thrifty habits in order to start saving some money. The tips below have a specific order following this rationale: reduce, save, control.

1- REDUCING MAKES THE DIFFERENCE

Before doing anything else, sit down and write down how much money you spend in every purchase: groceries, gas, clothing, electricity and others. You can cut off many extras you can perfectly do without, such as eating out, ordering takeaways or going to the movies every week. You can rent DVDs, which is much cheaper, you can learn new recipes to try at home and start eating healthy.There are many items you can find a more economic substitute for.

Other items you can cut down on: gas (walk wherever you can, carpool or make all you errands in one trip), clothing (are you sure you really need to buy new clothes every week?), food & medicine (go generic), electricity (change your incandescent bulbs for the more efficient CFL bulbs).

2- THE TEN PERCENT RULE

For everything you cut down or save, put a ten percent into a savings jar. For instance, if you were able to cut down on your electricity bill from 300 to 250, you had saved 50 bucks! Then put aside 5 into the savings jar. The same applies for every income in the house, on the condition that you put aside the 10% before paying any bill! Why? Because if you only have 90% of your regular income to spend then you'll be forced to save more in other things such as eating out, clothing, electricity, cell phones bills, etc.

If there's no possibility for you to save a 10% every month, then start with a 3 to 5%, and try to increase it every month. At the end of the year this money can be used to pay off your mortgage, or a student loan, or you can also save it for an emergency. The key is not to splash it out unnecessary: don't go and buy a new TV & home theater set, or the effort would have been pointless.

3- START A MONEY DIARY

Write down how much money you spend and how you paid, and leave a comment on how you felt about the purchase: was it necessary, such as groceries or was a latte? At the end of the week read it again and reflect on your feelings. You will find there are plenty of things you can cut down, look into the future and change your habits.

4- PAY IN CASH, NO CREDIT

Most probably, you are up to the neck in debts, therefore, using credit cards is just delaying the debt and making it bigger. If

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