The New Year is a time of new beginnings — a chance to get a fresh start, and change your life. What better way to do so than by taming your spending? It’s an awesome way to take your financial life from stressful to amazing.
It all starts with a mindset change
The key to taming your spending — and getting control of your finances — is to become aware of why you spend money, and to pay attention to how much of it you’re actually spending.
That’s right. Two little things: “Why” and “How much”.
You can do this most easily by sticking a piece of paper in your wallet or purse. (That can be the back of a receipt, in a pinch.) When you buy something, make a note of what it cost you and why you bought it. For example, you might write “Candy bar, $1, bored at work.” I know this doesn’t seem like the usual advice on reducing your spending, but it’s truly key.
So pay attention
Give it a week, and see what you’ve been doing with your money. You’ll probably see a pattern. And I’m betting that by the end of it, you’ll be spending less without even trying. (It’s like in science — just the act of observing something can impact what’s going on.)
From there, you can actively reduce your spending more. Cut out things that you’re not benefiting from (like that old gym membership that just makes you feel guilty), and shop around for better rates on the services you do want to keep.
Set a goal to reduce your spending by a set amount this month, and keep reducing it each month until you reach a level that feels good to you.
You’ll be glad you did.
P.S. To help you along in turning over that new leaf, here’s a chance for you to win $100 :)
I'm Jackie Beck, personal finance writer and creator of 
In 2013, I’ll be increasing my liquid savings in the emergency fund, in anticipation of graduating with my MLIS in May and looking for a library job. I’ve stepped back from my largest non-work, non-school commitment, and the associated costs will be saved instead of spent. This past year I saved more than 50% of my net income, and a large chunk of that will go toward paying off my grad school loans in the coming year.
That’s really awesome :)
The new year is as good a time as any to start changing your financial situation and to get on the path towards getting rid of debt forever.. I kind of love this time of year, with everyone in the self-improvement mindset!
It’s a nice mindset :)
I need to limit or budget for household expenses. I never budget for these items and then $4K that wasn’t in my budget ends up getting spent (flat screen TV, new curio, etc.) That’s my focus this year – set a budget for these items!
It makes a big difference to have a monthly budget for those.
“The key to taming your spending — and getting control of your finances — is to become aware of why you spend money, and to pay attention to how much of it you’re actually spending. ” I could not agree more. Not only tracking your spending, but why you’re spending it is a great way to find see how & why you’re doing what you’re doing. That’s a great way to get a better grasp on your finances for the long run.
Yup, it really does make a difference.
The “why” is something I need to be better at. I’ve taken to saying “because I deserve it” lately, and that’s the wrong answer. Yes, we need to indulge ourselves occasionally – in a budgeted manner, of course – but doing it all the time is a bad move!
Yup, doing it all the time can lead to trouble! Plus, it becomes not all that enjoyable even if you can afford it.
For 2013, I made a promise that I will start managing my financial resources so that I will have enough funds to start a business by 2014. It’s pretty challenging, but I want to believe that I can do it.
Depending on the kind of business you want to start, you may not need all that much money.
In 2013 I’m focusing on saving $12,500, getting my LCSW so I can get a raise and possibly start my own private practice, and cooking in more so we can save money on our dining out budget.
Those sound like awesome goals :)