Most people find it easier to earn more than spending less. Earning more allows them to satisfy all their wants and needs while spending less could force them to make severe lifestyle changes…which no one really wants if it’s going to take away their luxuries. Unfortunately for them, spending less – and not earning more – is what will get them wealthy and set for life.

Here are several ways for you to help you spend less and make do with what you’re earning.

Tip #1 Income Equals Necessities, Savings, and Frivolous Expenses
All the money you earn, whether it comes from your work, the business you have on the sides, part-time gigs, or the prizes you’ve won from the lottery, should be considered as your income, and there is a simple but exact formula on how to allocate it properly.

Pay Yourself First. Having money in the bank is always a must because this is the safest way to let your money grow. Be sure to choose investments wisely; don’t go for something you don’t have adequate knowledge and skills for.

Second, your remaining income must be spent on the necessities: putting food on the table, paying off utility bills, mortgage dues, school loans, purchasing groceries, and so forth. Necessities are everything that allows you to survive…they may not make you enjoy life, but they allow you to live to another day. This should be your number one priority.

And lastly, leave a bit of money for you to treat yourself…enough to purchase a book, eat out, or watch movie once or twice a month. These small treats are to ensure that you won’t go crazy making yourself spend less.

Tip #2 The Proper Way of Using Credit Cards
Credit cards are useful because they allow you to pay instantly for emergency expenses even without having the actual amount of money with you. But make sure that you only own one credit card because you don’t need more. Remember: it’s for emergency use only. Secondly, contact your credit card company and have them reduce your credit card limit to the amount you feel would be reasonable. Even if you can afford it, having a credit card limit of $50,000 seems too extreme doesn’t it? Lastly, and to make sure that you really won’t be tempted to use it for any frivolous reason, place it at the bottom of your bag or anywhere else that isn’t easily accessible.

Tip #3 Bring Only What You Can Afford to Spend
Most people tend to bring more, if not all of the cash they have with them, to make sure that they have the means to buy whatever catches their notice. But that’s a shopaholic’s point of view. If you want to spend less and save more, you need to forget about whatever materialistic principles you have. By bringing the exact amount of money you know you have to use, you’ll prevent yourself from getting tempted when temptations do arise.

Tip #4 Think Long-Term
Motivation is very important to help you spend less than you earn, and one way of motivating yourself is by thinking long-term. Always think about your objectives for spending less. Let’s say you want to spend less because you want to save for college, have your own home or car, or be able to travel to another country.

Tip #5 Moderation is the Key
When shopping for almost anything, most people tend to buy more than they need because they want to have enough for “emergencies” or they want to fully take advantage of the sale or promotion offered by the seller. These however won’t help you spend less. If you really want to save money, you should moderate your consumption expenses by buying only what you need and no more than enough.

It’s understandable if you won’t be able to accomplish all these overnight. But when you do get to accomplish them, don’t forget to give yourself a pat on the back because that will motivate you to stay on the path you’ve chosen…and that’s the road to wealth. Good luck on trimming your expenses!

[image from Kentskie]