Copyright © Chantal McBride
http://www.WebTD.com
When most Americans examine there spending, especially if it is the first time, they may be surprised at the amount of their overall spending and how little they are saving. How does one know how much is enough to save? The answer depends upon your goals and how good your investing skills are. For most people to reach their financial goals, they must save at least 10 percent of their gross (pretax) income.
Most people who are planning to buy a first home need to reduce their spending in order to accumulate enough money to pay for their down payment, closing costs and create enough slack in their budget to pay for the extra costs of homeownership. Here are some proven ways to cut your spending now and in the future.
Purge consumer debt - Credit card debt, auto loans, and other debts along those lines are detrimental to your long-term financial health. Consumer loans encourage you to live beyond your means and the interest rates are high and are not tax deductible. If possible pay down your consumer debt.
Trim non essential spending - Americans spend a great deal of additional money on luxuries and nonessentials. Even some of what people spend on what they would consider “necessities” is partly for luxury.
Purchase products and services that offer value - High quality doesn’t have to cost more. In fact, the higher priced products and services are sometimes inferior to lower cost alternatives.
Buy in bulk - Most items are cheaper per unit when bought in larger quantities or sizes. You can save a lot of money on bulk items bought at superstores such as Costco and Walmart.
Keep in mind, cutting back on spending does not mean you have to adjust to a lower quality of life. If done properly, you can live a very comfortable, fulfilled lifestyle without spending as much.
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