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Living within your means can be a challenge. Here are a few practical steps and tips that will help you be successful in your quest to save more and spend less.

1. List all of your necessary monthly expenses. Bills, gas for the car, groceries, and any other essential expenses should be included here. Use your online bank information, checkbook register, bills, and receipts to help you get an accurate picture of all your outgoing money. You may also want to try to estimate your expenses a few months into the future.

2. Next, list your monthly income using your pay stubs and bank balances over the past six months to a year. If you are paid on a consultant or irregular basis, try to estimate your monthly average over about 3-6 months. Also, try to estimate your income for the next few months so that you'll know what to expect over the coming financial season.

3. Enter all of this information into a financial program so that you can accurately track your income and expenses. Many people, myself included, choose to use a program called Quicken, software that makes expense tracking easy.

4. Determine what you can afford to spend every month and track every purchase. Yes, every purchase, no matter how small. You would be surprised how quickly those little purchases add up to big money. To track on-the-go purchases, simply save your receipts throughout the day, and enter them into the financial program that evening.

5. If you tend to lose receipts like my friend does, pay with cash. She pays for every purchase with cash, then subtracts what she has left in her wallet from the total amount she began the day with - the resulting number is the amount spent that day. Example: If she began the day with $25 and has $10.75 at the end of the day, she spent $14.25 that day. Of course, the totals will not be as itemized as they would be with receipts, but you will at least have the total spent.

6. Paying with cash also makes it more difficult to overspend. Swiping a piece of plastic through a machine does not have the same financial feel as cold hard cash being handed over to the cashier. I conducted an unscientific experiment, just to see how payment type affected my spending. When using cash instead of a debit card, I spent $35 less on purchases. Plus, at the end of each week of paying cash, I was able to put the loose change in my piggy bank.

7. If you realize at the end of the month that you spent less than you expected, stash the extra cash into a savings account. Having a small financial cushion for emergencies is a great way to avoid using credit cards in the future.

8. If your expenses exceed your target spending amount, take a closer look at your expenses over the past month. Quick dinners out, a few CDs, and a new shirt can easily put you over your target spending amount for the month.

9. Want to move beyond the basics and take your savings to the next level? Here's what we did to save $100 every month! We canceled the satellite TV, switched to dry line DSL, got rid of our home phone line (we switched to cell phones and internet calling), and downsized our garbage cans. These 4 changes save us over $1200 a year.

Learn more about this author, Grace Foster.
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