by Emily Wickersham

Created on: July 27, 2011   Last Updated: July 28, 2011

Wasting money can hurt you even more than you'd think.  Not only do you lose the money you wasted, but you may wind up borrowing at high rates to make up for it.  Even if you don't, you lose the use of that money and any interest you could have earned on it.  Here are some ways to plug your money leaks:

1)  Keep a money diary.  For the next 4 months, carry a notebook with you and write down every single penny you spend.  Be sure to include subway and bus fares, parking fees, and other incidental expenses.

2)  Go through the list and evaluate the expenses to find those you could have skipped.  Ask yourself whether the benefit you got from your purchase was worth what it cost you.  Ask if you could have gotten the same benefit in a less expensive way.  Could you have brought a thermos of coffee from home instead of buying it at work?  Could you have gotten that book at the library instead of buying it?

3)  Look at your monthly bills.  Are there any you could do away with all together?  Do you really need a land line if you make 90% of your calls on your cell phone?  Could you ditch your cable bill and download programs from the I instead? 

     Now go through the remaining bills line by line.  Are you paying for cell phone minutes you don't use?  Paying for movie channels you don't have time to watch?  Call your providers and get rid of things you don't need.  Also ask if there's a better package that would save you money.  If your teenager is running up a fortune in texting charges, see if the company has an unlimited texting feature.

4)  If you run a balance on your credit card, see if you can find a way to pay it down.  Even a few dollars will save you a great deal in the long run.  If you can't pay it down, see if you can transfer your balance to a card with a lower interest rate.  Do a google search to find the best deals.

5)  If you don't run a balance, do a search for the best deal on a cash-back rewards card.  Be aware, though, that taking out new cards may cause your credit rating to drop slightly.

6)  If you have investments, be sure you're getting the best deal.  If your mutual fund is failing to beat it's correlated index, you'd be better off switching to a low-cost index fund.  If you buy your own stocks, look for the lowest-cost discount broker.  Even if you only have a few dollars in a saving account, look for the best interest rate.

7)  If you want something you don't really have to have, try waiting a week to buy it.  Often you'll find you no longer want it when the week is up. 

8)  Never have work done on your house or car without comparing prices.  You'll be surprised at how much they vary.  Remember, though, that the best price isn't always the best choice. 

By being aware of where your money goes, you can save a lot without a lot of pain.  Not only will your financial picture look brighter, you'll sleep better at night and experience far less stress. 

Learn more about this author, Emily Wickersham.
Click here to send this author comments or questions.