8 tips for cutting costs without cutting the fun

Keeping track of expenses and putting money aside for those inevitable rainy days is challenging, but here are a few tips to help you get – and remain – financially on track.

1. Organize financial records.

Go through drawers, files and cabinets to find financial paperwork stashed throughout your home. Toss records you no longer need, including old bills, bank statements and receipts. If you receive and pay bills online, unclutter there too. Then create electronic or hard-copy folders, label them for easy identification and store them in one convenient spot.

2. Set a monthly budget and stick to it.

Many people aren’t realistic about their spending and find themselves low on funds before payday arrives. Learn where your money really goes by keeping a record of your regular monthly expenses: the house and car payments, utility bills, insurance premiums and installment loans. Then, every time you pull out your wallet, checkbook or credit card to purchase incidentals, write down the amount spent and the items purchased. We’re talking everything from groceries to cosmetics to Starbucks lattes and chips from the vending machine. At the end of a month, a review of the log will give you a good idea of where to cut back. Odds are you’ll be shocked to discover how quickly those under-$5 purchases added up.

3. Establish an emergency fund.

Don’t depend on willpower when building a financial reserve. It’s easy to overspend one month while telling yourself you’ll make up the difference the next. But have you ever noticed that something always foils the plan? Avoid temptation by paying yourself first. Deposit a portion of your paycheck directly into a savings or credit union account, or even into an investment account.

4. Curb your impulses.

Can’t live without that stainless steel, Dutch door refrigerator, even though your harvest gold antique is still plugging away? Just can’t continue without a new 60-inch, high-definition television? Put your decision on hold for a week or so. That “need it now” feeling may fade once reason sets in.

5. Put your money to work.

If you have extra money sitting around in a checking or savings account, congratulations! You’re a rarity. But you’re also not making the most of your bounty. Put your dollars where they can work for you by potentially earning a return on investment. Consider opening or adding to an IRA or increasing your 401(k) contributions.

6. Protect your future.

If changes to the U.S. health care system have affected your health care benefits, make sure you have a financial safety net that helps protect your family from expenses that can stem from an unexpected illness or accident. You may want to consider voluntary insurance policies, which help pay expenses major medical insurance may not cover. Among the most popular choices are life and dental insurance. You should also consider applying for coverage that helps pay daily living expenses if you’re sick or hurt and can’t work. For example, accident and disability insurance provide cash benefits that can help with the rent or mortgage, credit card bills, utility costs, grocery expenses or any other bill affecting your family’s financial security.

7. Schedule ‘plastic surgery.’

Most Americans don’t pay off their credit card balances each month. If you’re among them, remember that credit – used properly – is a useful tool. Just don’t let charges get out of control.

8. Reward yourself.

Your goal is to control spending and save for the future, not to live like a church mouse. Don’t skip vacations; shorten them or choose less-exclusive destinations. Don’t eat at home every night; choose less-costly restaurants. Leaving room in your budget for fun will make it easier for you to stick to your financial resolutions.

This article is for informational purposes only and is not intended to be a solicitation.

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