How to save more, spend less

Smart consumers always try to stretch dollars. Follow these tips to help you save money, spend less and improve your finances.

▪ Deal with your debt. To start saving money, deal with the money you already spent. Overspending often leads to credit card balances, expensive personal loans and other high-interest debt. Unless you develop a plan to pay off these debts – and stick to that plan over time – odds of paying off your debt are low.

Set aside a specific dollar amount for debt repayment each month and make sure this amount exceeds the minimums due. Pay the minimum on each of your debts and direct the remaining amount toward the debt you want to pay off first.

Paying extra toward the debt with the highest interest rate is best mathematically. If you juggle multiple debts, start with the debt carrying the lowest balance since you reduce the number of outstanding debts faster.

▪ Cool off on buying. Impulse purchases fuel our overspending. Even if your spending habits keep you clear of debt, diverting money from your financial goals still potentially hurts you.

▪ Implement a cooling-off period on impulse purchases. It’s not just big-ticket items like TVs, smartphones and cars that lead to trouble; smaller purchases add up quickly. Pause a week or two before buying. Use this time to see how the purchase affects your budget and to determine whether you need or just want certain items.

▪ Stick to your shopping list. How many times do you go to a store for just a couple of items and come out with a cart full of stuff? Making a list before you go shopping – and sticking to it when in the store – helps you spend less.

Also go directly to the part of the store that stocks what you want to buy. Wandering a store or meticulously going down every aisle often results in your buying things you don’t really need.

▪ Pay bills automatically. Expensive late-payment fees add up fast. Set up automatic bill paying for your credit cards, utility bills, phone bills and other regular expenses to make sure you never miss a due date. Not only does this help you dodge a late fee, it also saves your time.

Most banks offer automatic bill paying or you can charge bills directly to your credit card. I prefer to charge my bills to my card and automatically deduct the full card balance from my checking account at the end of the billing cycle. I get reward points and only worry about one draft from my bank account each month.

▪ Check recurring charges. You easily lose track of how much you pay for magazines, newspapers, credit-monitoring services, video services like Hulu and other recurring subscriptions. Go through your bank statements and credit card bills to see what you pay for perhaps without realizing and determine whether you want to keep a subscription.

Spending comes easy. Saving takes care and diligence. Striking the right balance between the two ensures your financial stability and success.

This story was originally published November 25, 2015 at 10:25 AM with the headline "How to save more, spend less."