6 Ways to Save More Money in 2012

Dollars & Sense on 12.28.11
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As 2011 draws to a close, it's time to gather receipts and bank statements and take stock of your household's fiscal year. If a look at your balances shows less money in the bank than you'd hoped, a few changes may be in order for 2012. Here are a few tips to help you save more money in the coming year.

1. Set a financial goal that matters.       

what motivates you to save
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Saving money will require you to make some sacrifices over the coming months, something that will prove difficult if you haven't thought about why you should go without now and then. On the other hand, having a big goal that means something to you and your family can actually making saving (and even skimping) fun. Are you working towards a new home or dream vacation? Maybe you just want to be able to work less overtime.The first step in setting a financial goal is to find what motivates you

2. Create a budget.

create a budget
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Setting a goal tells you where you want to go and creating a budget tells you how you'll get there. The important thing to remember is that you're in the driver's seat; you get to make the rules. Many people avoid making a budget because they don't want to think about "going without" or being told what they can't spend, but that's not  what a budget is for. Making a budget is just taking the time to decide where you'll spend the money you have instead of letting it slip through your fingers without much thought.

3. Save first.

save first
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Build room in your budget for savings. Make it a priority. In fact, most financial experts recommend setting aside money for savings before you pay a single bill. Whether you set aside a percentage of your income or put a certain dollar amount in a savings account at the beginning of each pay period, saving first makes your goals a priority. When you save first, you probably won't even notice you have less to spend. If you don't save first, you'll probably find you don't have anything left over at the end of the month; life has a funny way of eating up the left overs.

4. Give yourself an allowance.

spending money
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Everyone in our family gets an allowance. If you don't set aside a little spending money for yourself, you'll hate living your budget, no matter how important your saving goal is. You're also more likely to quit saving all together if you constantly feel like you're going without. Be practical. Set aside a reasonable amount of money every month for discretionary spending, and then spend within those limits without an ounce of guilt.

5. Impose a waiting period.

waiting to shop
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Does impulse shopping make it difficult for you to save? Instead of denying yourself completely, set a waiting limit on all purchases. Tell yourself that you'll buy that perfect pair of jeans if you still want them after a month of waiting. (A week is never long enough for me; I can obsess about nail polish for a week.)

6. Spend more when it matters.

cashmere
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When you do make a purchase, avoid spending your money on inferior products that won't last. Invest in quality items, even if that means you'll need to save a little longer before doing so. You'll spend more initially, but save money in the long run when you don't have to fix or replace inferior products. Fair warning: this quality over quantity paradigm shift is often the toughest financial change to make.

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