Ways to Decrease Spending

Once you have a good handle on your monthly income and expenses, you can take a closer look at easy ways to reduce your spending. According to Bankrate.com, the 10 biggest money drains are the things that you can easily do without.

  • Coffee: The average price of a cup of coffee is $1.38 (or more depending on the coffee vendor), reports the National Coffee Association. If you buy a cup of coffee every morning for a year that could add up to at least $500 a year. That's money that could be contributed to your retirement fund or savings account. Consider making coffee at home to save money.
  • Cigarettes: The average price for a pack of cigarettes in the United States is $4.54. A pack a day can cost you about $1,660 a year.
  • Alcohol: The average cost of one beer is $5 including tip. If you buy two beers a day, it can add up to $3,650 a year. It gets even more expensive if you buy a round of drinks for your friends.
  • Bottled Water: A liter of bottled water will cost you $1.50. Buying one bottle of water a day will cost you around about $540 a year. This purchase will cost you and the environment in the long run.
  • Manicures: A $20 weekly manicure could rob your savings of $1,040 a year. Doing your own manicure will only cost you about $5--the price of a bottle of nail polish.
  • Car washes: The average cost for basic auto detailing is about $58 and if you have your car detailed every two months it will cost you $348 a year.
  • Buying Your Lunch Everyday: $9 will generally cover a decent lunch most work days. If you buy rather than pack a lunch five days a week for one year, you shell out about $2,350 a year.
  • Vending Machine Snacks: The average vending machine snack is about $1. Buying a snack a day will cost you $365 per year.
  • Interest Charges on Credit Card Bills: The median credit card debt for most Americans is $6,600. Rate tables on Bankrate.com indicate that fixed interest rates on a standard average is 13.44%. If you make the minimum payment each month it will take you 21 years to pay off the debt.
  • Unused Memberships: A gym membership that goes unused is probably $40 a month, which can add up to $480 a year. Either use the membership or cut your losses.

More Ways to Stretch your Dollar

  • Carry small amounts of cash to limit your spending.
  • Eliminate or control your use of credit cards.
  • Buy only what you need versus what you want.
  • Take your written savings goals as a reminder when shopping.
  • Use a grocery shopping list to prevent impulse buying. Stick to it!
  • Use coupons to save money on items you need.
  • Cook meals at home, freeze food/save leftovers and take lunch to work instead of eating out.
  • Buy used clothing, furniture, etc.
  • Limit your song, ringtone and app downloads.
  • Shop around for the best deal on big-ticket items, like cars and appliances. Some stores offer discounts for automotive clubs or to military personnel.
  • Pay your bills on time to avoid late fees, extra finance charges, utilities being turned off, eviction, repossessions and a bad credit rating.
  • Avoid rent-to-own stores, pawnshops and check-cashing stores.
  • Use direct deposit for your paycheck--it’s safer and easier than using paper checks, and your bank may reduce or eliminate the monthly fee if you have direct deposit.

If you’re diligent and cut back on the extras, you’ll be able to contribute more money to your savings account or reserve fund than you expected.