by Colene Pefley

Created on: May 21, 2010   Last Updated: May 22, 2010

Many people think that more money equals an end to their money woes, but this is not necessary the truth. Finding an end to your problems begins with formulating new spending and saving habits and creating a new positive, self-disciplined attitude. Here are a few tips than may help you find an end to your money problems for good.

Live Within Your Means - Living above their means is the first mistake that most people make when it comes to his or her finances. This is all too easy to do because people are too often consumed with their wants and desires rather than their needs and responsibilities. Realizing your means is the first step to making conscious choices about what can be afforded and what cannot.

Track You Spending – Before making a budget, try tracking your spending habits for one to three months. This will give you an estimate of how much money that you could be saving each month.

There are bound to be many miscellaneous expenses that you may not have realized that you had, such as daily trips for coffee or fast food. Relatively small, unbudgeted purchases add up very quickly, so make sure that you have allocated them in the next step.

Create a Working Budget – Budgets can be very difficult to create and stick to and this is why the previous step is so important. A simple spreadsheet program can be used to create a budget. Once you have figured out what you actually spend your money on, you can figure out what you can cut from your budget.

Perhaps taking lunch to work a few times a week or preparing your own coffee every morning can help alleviate your money issues. If not, look for other ways to cut back. You can try calling your utility companies to see if you are eligible for a discounted rate, or try to combine services such as television, cable, and internet.

Create a Savings Plan – After creating a budget that best suits your needs, you need to figure out how much you will be able to put towards savings. Having savings set aside is imperative to financial security.  

Once you have allocated all of your expenses properly, see how much you have left over. If you can save at least half of that figure, it is a great place to start.

Don’t Forget to Pay Yourself – Allow room within your budget to treat yourself. Creating a spending and saving plan is hard work and you deserve to reward yourself if you are able to stick to it. Although this seems like a tactic that would work well for children, adults respond just as well to positive reinforcement.

Money problems will not go away without changing your own spending and saving behavior. It takes time and effort to train yourself to be financially responsible.

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