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The single most important thing you can do to take care of your finances is to create a budget. Sure it’s an ugly word, and not a fun process, but if you don’t track where your money is going, and try to make a plan for future revenues and expenses, you aren’t going to achieve the kind of success you want.

The Real Value of a Budget

I’m not going to pretend that I sit down and plan my budget every month and stick to it to a T (or is it tee, or tea?), but the process of just making a budget of what you’ve done in the past 3 months is eye-opening.

When I went through this process a few months ago, I discovered I was spending around $700 just for a place to live (rent, cable and other bills), $750 for transportation (car payment, insurance, and gas – close to $200 for the fuel alone), and $400 or so for food (a pretty even split between groceries and dining out).

That’s nearly $2,000 I’m spending every month just to survive (shelter, food, and of course getting to a number of places for either P&G or comedy). All things considered, this isn’t really that bad – I have no children or wife to take care, I’m only paying rent, and my car payment could be worse, but when I went back and looked at my individual expenses, it certainly could have been lower.

The advantage to completing a budget (even if it’s one based on past data, not future looking), is that it informs you of where that hard earned cash is going – and as the GI Joes told us, “Knowing is half the battle.” Once you know where your money is going, you can take steps to curtail spending in key areas to increase the overall amount of money you are saving.

What to Do With the Money You Save

Before I get into some steps to save money, I want to briefly talk about what you should be doing with the extra money you are saving.

While “investing” may be a scary word, it is absolutely necessary in today’s world. Considering the state of social security in this country these days, you can’t rely on the government to provide you sufficient funds once you retire.

You need to be proactive and plan for your own future, whether it’s having kids, going to college, or retiring. Plus investing puts your money to work and allows you to accrue income just for having money (sort of). I won’t go into details of how you can get into investing, as I am certainly not an expert. Instead, I’ll point you to – the site that got me to really think about my finances.

The site is geared towards a younger audience, but it certainly has relevant information for everyone (I suggest starting here). If you’re serious about increasing your wealth and your future security, go to that site now (well, after you finish reading this post).

A Disclaimer About A List

Ok, so you’ve got your resource for what do when you have disposable income, what can you do to actually get disposable income? Below is a list of 15 tips you can do to save money. Most of them are tips I use every day, others are things I’ve read but don’t necessarily do. A few disclaimers before we get started though:

  • This list is just a set of suggestions. You don’t have to do every single thing listed to see results. You have to define which things will work for you.
  • If you take the time to actually do a budget, this list can help troubleshoot key areas. If you find that you spend a lot of money dining out, then the restaurant or food tips will be of particular interest.
  • Like we’ve talked before, it’s best to start out small. Don’t expect to find happiness or success by doing all of things listed below, as most of them require some type of sacrifice that you may think detracts from your overall happiness in life. Identify these and manage them. The list isn’t meant to turn you into an anti-social hermit that does nothing, it’s just meant to get the gears in your own head moving to find other ways to save where you can.
  • Finally, the biggest way you can increase the amount of money you have is to increase the actual amount you receive. This can be done by getting a better job, getting a raise, adding a second (or third) job. The key is that if you do increase your income, don’t increase your expenses. It’s truly powerful when you can live below your means.

15 Tips to Save Money

Ok, with all of that out of the way, here are 15 ways you can work to save money:

  1. Learn to love technology. Take advantage of new technology to save time (which then frees you up for other things) and to better educate yourself. Things like reading blogs (made easier through blog aggregators like Bloglines), listening to podcasts, and connecting with other people can help you learn new ways to save money.
  2. Become a savvy consumer. Use the Internet to do your research before you make any large purchases, and learn to negotiate prices. You’ll be surprise how many places you can actually haggle for a better deal. Check out this eHow article for more tips.
  3. Seriously, eat at home. Dining out can seriously damage the pocket book if it is done too often. The added expense of food, beverages, leaving a tip, driving to the restaurant, etc etc all adds up. When you combine smart grocery shopping with some creativity in the kitchen, you can create a number of meals that net out to be less than $3. And you don’t even have to be a great cook to dine at home. Anyone can use a George Foreman grill, and it’s perfect for hot dogs, hamburgers, grilled cheese, chicken breast, and a huge host of other things. Head over to Cheap Eats if you want to find some other inexpensive dining options.
  4. Be a freezer. If you really wanted to maximize your savings by buying groceries, learn to love your freezer. A Sam’s membership plus a sizable freezer allows you to buy in bulk and really find savings. Things like bread can be frozen now and then put in the refrigerator to be consumed weeks later. The watch-out here is that your savings from bulk purchases has to outweigh the cost of the Sam’s membership and of a new freezer (if necessary)
  5. Love water. For the times that you do dine out, stick to ordering water. Non-alcoholic drinks easily push the $2 range, and alcohol is even more – not to mention drinking water is healthier for you. If you dine out 5 times a month, that’s a savings of $10 a month or $120 a year – just to drink water. And if you must have your fix of Diet Coke or Iced Tea, buy it at the store where it only costs you $.50 a can. Drink water at the restaurant and then reward yourself when you get home with a much cheaper alternative.
  6. Be DD. I don’t drink alcohol for personal reasons, but it also turns out to be quite the money saver. Going out sober for a night nets quite a nice ROI, and not just because you aren’t spending money on drinks. If you offer to be the Designated Driver for your buddies, you can easily get them to pay for gas (if you drive your car), get them to let you drive their car (no gas or miles on yours), and/or pay your cover at the clubs/bars. They get to have a night of responsible drunkenness, and you get to have a night of free fun. If you don’t think this will work because you don’t think you can go out and have fun without drinking, then saving money shouldn’t be your only concern.
  7. Be creative. Find new ways to have fun that don’t require much money. Going to the movies is nice, but it’s also at least a $10 ordeal (whereas if you wait till it comes to DVD and do a rental it’s much cheaper). Find new and creative ways to have fun like playing Frisbee golf. Or do your research online and find free events happening around your area. has a whole list of events going on around Cincinnati, subscribe to their email and pay special attention to the free events on Fountain Square or down by the river.
  8. Find a hobby. Hobbies can help you fill free time and prevent from spending money out of boredom. The key here is to pick hobbies that don’t require much money (so golf would be a bad idea). Consider trying knitting, reading, writing (blogs are free) or improvising.
  9. Break the materialism. Stop tying your “happiness”/confidence/perception of fun to material things. People often go shopping or get their hair done when they think they need a boost in confidence, when all they are doing is adding an expense for something they can work to get for free. Similar to drinking, learn to work on your own personality and character so that you don’t require the crutch of material things to satisfy you.
  10. Kick the habit. Whether it’s smoking, gambling, or even being addicted to coffee, habits often cost money. The cost of cigarettes continues to rise, you’ll never beat the house when gambling, and that $4 Starbucks coffee is putting a drain on your budget. And while it’s certainly not easy to kick a habit, using some of the previous posts from this week, and getting professional help where applicable, can certainly help – you’ll end up with more money and a healthier lifestyle.
  11. Drive like a granny. When you average around 3,000 miles on your car every month, gas starts to add up. But even if you only drive 5 miles to work, improving you gas mileage will always make financial sense. There are plenty of ways to improve that MPG (removing unnecessary weight from the trunk, changing your air filter when appropriate, having properly inflated tires), but one of the biggest sources of better MPG might be your own driving style. Driving the speed limit and using cruise control can easily bump up your mileage 2-4 MPG. Every car is different, though the standard is 35mph and 55mph provide the best mileage, but do your own experiment to find the optimal speed for your car. The next time you fill up your tank, reset the trip odometer and drive like normal. When you have to fill up after that, divide the number of miles on your odometer by the number of gallons it took to fill your tank back up (that’s your MPG for that tank). Now reset your odometer and drive only the speed limit. Next time you fill up, do the same division and compare the two numbers. Repeat a few times to decrease variance, and play around with your speeds, and you’ll see the difference. In addition to saving money by filling up less, you’ll be doing a small part in saving the environment.
  12. Get rid of the crap. De-clutter your life to save time when cleaning and relieve unnecessary stress. Plus if you put your garbage on eBay, you might be able make some money for getting rid of your crap. How do you know what to get rid of? If you can’t foresee needing something within the next year, get rid of it. Sure there will be a few times that you throw out something only to need it a month later, but it’s worth it to get rid of the remaining 98% of crap you’ll never need. And remember, “when in doubt, throw it out.”
  13. Don’t be dumb. Stupidity can be a big expense for some people. Speeding leads to speeding tickets and increased insurance costs. Jumping from a 10-foot ledge leads to a trip to the hospital and the cost of a cast. Take some basic precautions and save yourself some cash (because, as of yet, stupidity insurance doesn’t exist yet).
  14. Live pet free. Dogs may be man’s best friend, but if you’re really strapped for cash, he’s also an added expense. There are a number of studies that talk about the positive effects pets have on their owners, so if you need that then consider this a last resort, but if your happiness isn’t tied to having a pet, then consider finding it a good home. Dog food, bones, leashes, and the overall time it takes to care for a pet can really add up. Note: please don’t do this with children, though they are also huge expenses.
  15. Drop the Cable. Not only does TV suck away hours from your life, sapping you of your productivity, but cable is pretty expensive. As broadband Internet connections become more and more mainstream, you can find nearly everything shown on TV online for free (or at least cheap). Sites like Joost and YouTube allow you to watch all types of video content, and stations like NBC are starting to allow you to stream their shows from their websites. You can find even more if you ignore that whole “law” thing, but I am by no means endorsing that.

And there you have it – 15 tips for saving money. I realize this is quite the marathon post, but there’s a lot of content to cover. I certainly didn’t hit everything, so don’t be afraid to google specific topics that you can use some help in (which you have identified by filling out a budget, right?).

Also, be sure to check out iwillteachyoutoberich and getrichslowly for more information dedicated to taking control of your finances.

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