r stuff! Window-shopping can be dangerous to your wallet. If you find yourself overcome with desire, wait at least three days. If you still must have it, then buy it. Most of the time, the desire will pass.

2. Each month pick one utility or service bill and reduce or eliminate it. For example, on your phone bill, eliminate all those "extras" such as call waiting, call forwarding, caller ID, etc. I use a 3-cent a minute phone card for all long distance and so cancelled my long distance carrier that charged me $7/month for nothing. And, of course, I don't pay the ridiculous high prices for long distance they would have charged me! For electricity, shop around. Your service provider may not be the cheapest. You could save as much as 20%. Do you really need a monitored alarm system? Could you be comfortable with only an audible alarm? What about cell phones? The plans change frequently...and I do mean frequently! Call your cell phone company and request a lower rate or a better plan. Well, you get the i

Do your finances seem like a black hole? Money comes in, maybe even lots of it, but it gets sucked into nowhere and you’re not sure how it happened? This may occur for lots of reasons, but the biggest is biting off more than you chew (or pay for). Another way of saying this is you are not living within your means. For example:

· Buying a new car when a used one is good enough.

· Purchasing a bigger, more expensive house thinking your income will go up fast enough to cover the expense.

· Paying for services such as housecleaning, yard maintenance, childcare, club memberships, computer site fees, etc.

· Expensive, exotic vacations

· Charging everything from groceries to clothing to home remodeling on your credit card.

Did you know that most millionaires got rich by living below their means?

Being self-employed or being salaried but getting big bonuses may increase your risk for over-committing. You believe you can afford something because you have the money right now, but don’t remember that next month’s income may be much less or you may not get a bonus next year.

But the biggest contributor to biting off more than you can pay for is not knowing the true state of your money flow. Lots of people say, “But I don’t spend that much money” without having any facts to back it up. They may think or feel that because they are comparing themselves to others or to some ideal way of living. Do you know to the penny, okay, at least to the nearest dollar, what your fixed and discretionary expenses are each month? Do you have a spending plan for your fixed expenses that only come once a year such as auto insurance, property taxes, and home insurance, etc.? Do you have a spending plan for the big discretionary expenses that only come once a year such as birthday and holiday gifts, vacations, and seasonal clothing, etc.?

So what do you do?

For starters, if you don’t already know where your money goes, write down every penny you spend for a month. This will give you an idea of your daily discretionary spending. Is it going towards lattes, cokes, donuts, clothes, or lunches at work? Then comb through your bills, checkbooks, and credit card statements. The idea is to build an accurate picture of your entire financial life…what comes in, what goes out, and what do you have stored (savings, investments, assets). This may take you some time, but it is absolutely critical in understanding and finally changing your financial life. It is not fun, just necessary.

You may have to face some hard truths about your spending, but it is the first step to gaining control. And gaining control, I promise you, will vastly improve the way you feel. When reviewing your spending and income patterns, remember that it is no shame, no blame. It is what it is so don’t beat yourself up. You’re doing the courageous thing by looking at your money flow in the clear light of day. Having debt and finances that are out of control, or even that just don’t meet your own goals, wears on you, making you moody, irritable, worried, fearful, exhausted and may even affect your health and relationships.

Cutting Your Expenses

Now that you have been tracking and understand your money flow so that you have a total picture of your spending and income, it’s time to look at where your money is going. No matter how little money you have and how necessary you think the spending is, there are always ways to cut more, often without even feeling it.

So why cut your expenses? Many of us would like to save more...for retirement, for emergencies, a long vacation, a better car, or a sabbatical. Some of us are deeply in debt or moving in that direction. Some of us can’t make monthly bill payments. If you want to save more or are spending more than you can afford, you may want to start economizing or cutting your expenses. Here are my own favorite top ten ideas:

1. My number one pick for saving on your expenses is to stop shopping! Don't go to the mall, don't look at the dozens of catalogs that arrive in the mail, and don't surf the Internet for stuff! Window-shopping can be dangerous to your wallet. If you find yourself overcome with desire, wait at least three days. If you still must have it, then buy it. Most of the time, the desire will pass.

2. Each month pick one utility or service bill and reduce or eliminate it. For example, on your phone bill, eliminate all those "extras" such as call waiting, call forwarding, caller ID, etc. I use a 3-cent a minute phone card for all long distance and so cancelled my long distance carrier that charged me $7/month for nothing. And, of course, I don't pay the ridiculous high prices for long distance they would have charged me! For electricity, shop around. Your service provider may not be the cheapest. You could save as much as 20%. Do you really need a monitored alarm system? Could you be comfortable with only an audible alarm? What about cell phones? The plans change frequently...and I do mean frequently! Call your cell phone company and request a lower rate or a better plan. Well, you get the id

emember that next month’s income may be much less or you may not get a bonus next year.

But the biggest contributor to biting off more than you can pay for is not knowing the true state of your money flow. Lots of people say, “But I don’t spend that much money” without having any facts to back it up. They may think or feel that because they are comparing themselves to others or to some ideal way of living. Do you know to the penny, okay, at least to the nearest dollar, what your fixed and discretionary expenses are each month? Do you have a spending plan for your fixed expenses that only come once a year such as auto insurance, property taxes, and home insurance, etc.? Do you have a spending plan for the big discretionary expenses that only come once a year such as birthday and holiday gifts, vacations, and seasonal clothing, etc.?

So what do you do?

For starters, if you don’t already know where your money goes, write down every penny you spend for a month. This will give you an idea of your daily discretionary spending. Is it going towards lattes, cokes, donuts, clothes, or lunches at work? Then comb through your bills, checkbooks, and credit card statements. The idea is to build an accurate picture of your entire financial life…what comes in, what goes out, and what do you have stored (savings, investments, assets). This may take you some time, but it is absolutely critical in understanding and finally changing your financial life. It is not fun, just necessary.

You may have to face some hard truths about your spending, but it is the first step to gaining control. And gaining control, I promise you, will vastly improve the way you feel. When reviewing your spending and income patterns, remember that it is no shame, no blame. It is what it is so don’t beat yourself up. You’re doing the courageous thing by looking at your money flow in the clear light of day. Having debt and finances that are out of control, or even that just don’t meet your own goals, wears on you, making you moody, irritable, worried, fearful, exhausted and may even affect your health and relationships.

Cutting Your Expenses

Now that you have been tracking and understand your money flow so that you have a total picture of your spending and income, it’s time to look at where your money is going. No matter how little money you have and how necessary you think the spending is, there are always ways to cut more, often without even feeling it.

So why cut your expenses? Many of us would like to save more...for retirement, for emergencies, a long vacation, a better car, or a sabbatical. Some of us are deeply in debt or moving in that direction. Some of us can’t make monthly bill payments. If you want to save more or are spending more than you can afford, you may want to start economizing or cutting your expenses. Here are my own favorite top ten ideas:

1. My number one pick for saving on your expenses is to stop shopping! Don't go to the mall, don't look at the dozens of catalogs that arrive in the mail, and don't surf the Internet for stuff! Window-shopping can be dangerous to your wallet. If you find yourself overcome with desire, wait at least three days. If you still must have it, then buy it. Most of the time, the desire will pass.

2. Each month pick one utility or service bill and reduce or eliminate it. For example, on your phone bill, eliminate all those "extras" such as call waiting, call forwarding, caller ID, etc. I use a 3-cent a minute phone card for all long distance and so cancelled my long distance carrier that charged me $7/month for nothing. And, of course, I don't pay the ridiculous high prices for long distance they would have charged me! For electricity, shop around. Your service provider may not be the cheapest. You could save as much as 20%. Do you really need a monitored alarm system? Could you be comfortable with only an audible alarm? What about cell phones? The plans change frequently...and I do mean frequently! Call your cell phone company and request a lower rate or a better plan. Well, you get the i

retionary spending. Is it going towards lattes, cokes, donuts, clothes, or lunches at work? Then comb through your bills, checkbooks, and credit card statements. The idea is to build an accurate picture of your entire financial life…what comes in, what goes out, and what do you have stored (savings, investments, assets). This may take you some time, but it is absolutely critical in understanding and finally changing your financial life. It is not fun, just necessary.

You may have to face some hard truths about your spending, but it is the first step to gaining control. And gaining control, I promise you, will vastly improve the way you feel. When reviewing your spending and income patterns, remember that it is no shame, no blame. It is what it is so don’t beat yourself up. You’re doing the courageous thing by looking at your money flow in the clear light of day. Having debt and finances that are out of control, or even that just don’t meet your own goals, wears on you, making you moody, irritable, worried, fearful, exhausted and may even affect your health and relationships.

Cutting Your Expenses

Now that you have been tracking and understand your money flow so that you have a total picture of your spending and income, it’s time to look at where your money is going. No matter how little money you have and how necessary you think the spending is, there are always ways to cut more, often without even feeling it.

So why cut your expenses? Many of us would like to save more...for retirement, for emergencies, a long vacation, a better car, or a sabbatical. Some of us are deeply in debt or moving in that direction. Some of us can’t make monthly bill payments. If you want to save more or are spending more than you can afford, you may want to start economizing or cutting your expenses. Here are my own favorite top ten ideas:

1. My number one pick for saving on your expenses is to stop shopping! Don't go to the mall, don't look at the dozens of catalogs that arrive in the mail, and don't surf the Internet for stuff! Window-shopping can be dangerous to your wallet. If you find yourself overcome with desire, wait at least three days. If you still must have it, then buy it. Most of the time, the desire will pass.

2. Each month pick one utility or service bill and reduce or eliminate it. For example, on your phone bill, eliminate all those "extras" such as call waiting, call forwarding, caller ID, etc. I use a 3-cent a minute phone card for all long distance and so cancelled my long distance carrier that charged me $7/month for nothing. And, of course, I don't pay the ridiculous high prices for long distance they would have charged me! For electricity, shop around. Your service provider may not be the cheapest. You could save as much as 20%. Do you really need a monitored alarm system? Could you be comfortable with only an audible alarm? What about cell phones? The plans change frequently...and I do mean frequently! Call your cell phone company and request a lower rate or a better plan. Well, you get the i

ful, exhausted and may even affect your health and relationships.

Cutting Your Expenses

Now that you have been tracking and understand your money flow so that you have a total picture of your spending and income, it’s time to look at where your money is going. No matter how little money you have and how necessary you think the spending is, there are always ways to cut more, often without even feeling it.

So why cut your expenses? Many of us would like to save more...for retirement, for emergencies, a long vacation, a better car, or a sabbatical. Some of us are deeply in debt or moving in that direction. Some of us can’t make monthly bill payments. If you want to save more or are spending more than you can afford, you may want to start economizing or cutting your expenses. Here are my own favorite top ten ideas:

1. My number one pick for saving on your expenses is to stop shopping! Don't go to the mall, don't look at the dozens of catalogs that arrive in the mail, and don't surf the Internet for stuff! Window-shopping can be dangerous to your wallet. If you find yourself overcome with desire, wait at least three days. If you still must have it, then buy it. Most of the time, the desire will pass.

2. Each month pick one utility or service bill and reduce or eliminate it. For example, on your phone bill, eliminate all those "extras" such as call waiting, call forwarding, caller ID, etc. I use a 3-cent a minute phone card for all long distance and so cancelled my long distance carrier that charged me $7/month for nothing. And, of course, I don't pay the ridiculous high prices for long distance they would have charged me! For electricity, shop around. Your service provider may not be the cheapest. You could save as much as 20%. Do you really need a monitored alarm system? Could you be comfortable with only an audible alarm? What about cell phones? The plans change frequently...and I do mean frequently! Call your cell phone company and request a lower rate or a better plan. Well, you get the i

r stuff! Window-shopping can be dangerous to your wallet. If you find yourself overcome with desire, wait at least three days. If you still must have it, then buy it. Most of the time, the desire will pass.

2. Each month pick one utility or service bill and reduce or eliminate it. For example, on your phone bill, eliminate all those "extras" such as call waiting, call forwarding, caller ID, etc. I use a 3-cent a minute phone card for all long distance and so cancelled my long distance carrier that charged me $7/month for nothing. And, of course, I don't pay the ridiculous high prices for long distance they would have charged me! For electricity, shop around. Your service provider may not be the cheapest. You could save as much as 20%. Do you really need a monitored alarm system? Could you be comfortable with only an audible alarm? What about cell phones? The plans change frequently...and I do mean frequently! Call your cell phone company and request a lower rate or a better plan. Well, you get the idea. Don't just assume that there is nothing you can change.

3. Look at any service fees you may be paying. Service fees are the fastest growing category of spending for consumers. For example, Internet service providers, investor reports and services on the Internet, weather bulletins, subscription fees, user fees, download fees, etc. These can add up to hundreds of dollars a month if not carefully watched. There are several really inexpensive Internet service providers that work quite well. Don't stick with AOL or Earthlink just because you always have. It's easy to investigate others and many give free 30-day trials. For example, try academicplanet.com, netzero.com, ev1.net, hal-pc.org or pcpeople.com.

4. Everyone seems to assume that they must have cable or satellite television and that the $50 or $70 or $99 per month charge is "just the way it is". I double-dare you to take charge of your family's television viewing. With no cable or satellite, you still get 3 to 6 stations in Houston, for example. If you need more, buy the absolute minimum you can live with. For example, if you get HBO only to watch the Sopranos, can you watch it with friends? Ask them to tape it for you? Or at least have HBO connected only during the season! Don't even get me started on how bad TV is for children and how much time adults waste watching it!

5. Shop around for big-ticket items. If you have not shopped on the Internet, you will be amazed at the differences among prices for the same item. Prices can vary hugely. You can always go to a brick and mortar store to see and touch the item, make a selection, but then shop online for best prices and warranties. You can use shopping comparison sites such as nextag and pricewatch. I just this week bought a popular money software program that was listed for $89.99 at my local office supply stores. I checked around and it was the same price at my local huge discount store. Online, I found lots of lower prices including $79.99, 59.99, 41.95 and 23.88. I finally bought it on ebay for about $29 with shipping. This all took about 10 minutes.

6. For smaller, regularly used items, shop around, both on the Internet and locally. For example, I buy my printer ink cartridges at half the office supply store price at a local store called Cartridge World. The first time I went in, I saved $122. For gift-wrap items such as paper and ribbons, try a dollar type store or your local party goods discounter. When I bought my day planner updates for 2005, the price at one office supply store was 1/2 the price at the other a few blocks over for the identical item, a savings of $22!

7. One of my biggest weaknesses is books. I read voraciously. The Houston Public Library has an online service that is incredibly useful and efficient. You can look in their catalog, find the book you want, have it sent to your local library branch and they notify you when it arrives and is ready for pick-up. If the Houston Library system does not have the book, they will search other libraries in the state including university libraries, have it sent to your local library and notify you. You can even renew the book online. Many libraries across the country have the same service. If you really must buy a book, try Half-Price Books (chain store) and as well as consignment and thrift stores locally. But none of these has catalogs so you have to go and look around for what you want. Online, try the book shopping comparison services: fetchbook.info and addall.com. Also try for used books on half.com and ebay.com. Again, you can often get books for pennies on the dollar. I promise!

8. Reduce or eliminate a daily habit. For me it is canned sodas. I drink several a day. Eliminating these would save me $2/day or more than $700/year. I have cut back, but haven't eliminated them...yet. I'm not suggesting you do without all pleasures, but many are just habits, nothing more. Lattes? Bottled water? That morning donut or candy from the vending machine? One more purple stuffed bear for your collection? Another pair of shoes