Editors Note: This is a guest post from Nikki Dell
Now that you’re an adult, it’s time to stop spending your money like there’s a never-ending supply. While it may have seemed that you had all of the money in the world when it was being handed to you by your parents, the money train has come to a quick stop. Living on your own is vastly different than taking up residence in the parents’ house, and you’ve got to learn how to live on a budget. Here are five ways to fatten your wallet and reduce your expenses:
1.Know Your Wants Versus Your Needs
It’s a simple lesson of life, but one that many don’t learn until their in debt: wants versus needs. The key to any good budget is knowing the difference between these two things. We need food, shelter and clothing; we want designer jeans, Starbucks coffee and flat-screen televisions. Before you make any purchase, determine which category it fits into. If the item of your desire is a need, go ahead and make the purchase. If, on the other hand, the object is a want, take some time to decide if you can fit it into your budget.
2.Reduce Your Expenses
Another way to fatten your wallet is to reduce your expenses. If you have a cable package with 300 channels, cut it back to only 100 channels. If you haven’t shopped for auto insurance since you signed for your policy, get online and compare rates. Look for ways to cut the other expenses in your life: pack your lunch, dump your expensive cell phone, make your own coffee or even grow a garden. If you look hard enough, you’ll discover dozens of ways that you can reduce your monthly expenses.
It’s difficult to save if you don’t have goals. Whether you want to save a certain amount of money in a set period of time, or you want to buy your first house, establishing concrete goals will give you something to work towards and make it easier to save. You can set weekly, monthly or even yearly goals, but the key to saving is making a plan and sticking to it.
You’d be surprised at how much money you can save if you leave the credit cards at home and start using cash. Not only will you skip the expensive interest charges, but you may just think twice about the purchases you are considering. If you consider that a $200 television can cost you double that amount if you pay only the minimum monthly amount due on your credit cards each month, you’ll quickly see how using cash can save you money.
No one likes the thought of taking on extra work, but if you’re able to live on your first salary alone, your entire second paycheck can be put into your savings account. If you have a talent to share, consider working at home and making a few extra bucks a week. You can design websites, write articles or even sell items on eBay for extra money. If you make $100 a month, that’s an extra $1,200 in your savings account each year.
Keeping more money in your wallet at the end of each week doesn’t have to be difficult. If you set goals for yourself, reduce your expenses and even take on a part-time job, you can eventually have more money than you know what to do with. If you’re smart with your money, you’ll quickly start to see it add up.