The Best Ways to Rein in Your Spending

Whether it’s the aftermath of a busy summer spent vacationing or the lead up to the winter holidays, there comes a point when you realize you’re spending far too much money. These bad spending habits can empty your savings, rack up debt, and leave you in the lurch when an unexpected expense comes your way.

Undoing them isn’t always easy. Some habits may be ingrained, like the financial mistakes we learn from our parents, while other parts of our spending routine simply make us feel too good to give them up.

However you came by your bad habits, check out this guide to put a stop to them. These good money management tips will help you rein in spending and boost your savings.

1. Only Use a Line of Credit in an Emergency

Using your line of credit like it’s cash is a dangerous habit to get into for two reasons.

  1. It makes you spend more than you intend. One study shows people spend 100 percent more when using a credit card over cash.
  2. It ties up your line of credit or credit card limit. When you rely on this account to cover everyday expenses, you’ll have less credit available in case of an emergency.

Benching your line of credit may help you ignore temptations that you don’t need. It will also keep its limit free for its true purpose: helping you in an unexpected emergency.

2. Save 20 Percent of Your Income

Unless you’re psychic, you won’t always be able to tell when an unexpected emergency expense will arrive — or even what it will be. But it’s a pretty sure bet you will face these expenses. Life throws you curveballs whether you have the cash to cover them.

Roughly one in five Americans have no savings, which means they may have to get a personal line of credit to help them cover an unexpected expense.

You may be able to avoid this if you make savings a regular part of your monthly budget. A popular budgeting technique suggests holding 20 percent of each paycheck to put towards savings.

Cut out other expenses to free up the cash you need to hit this target. If you can commit to this plan over the long-term, you may not have to dip into credit when disaster strikes.

3. Change up Your Commute

The average American commute takes 26 minutes each way. But the time it takes you to get to and from work isn’t the only thing your commute robs from you; it takes your hard-earned cash if you drive alone.

The cost of maintaining your vehicle, parking, gas — it all adds up to an astronomical bill. Each mile you live from work tags on $170 in annual car expenses.

You may be able to save a considerable sum by switching the way you get to work every day. Check out these four tips to saving money on your commute:

  • Carpool with a colleague, friend, or someone from these rideshare sites.
  • Switch out your car for a train, bus, or subway
  • Walk or cycle to work if it’s safe to do so
  • Talk to your boss about working from home

Bottom Line

It will always be easier to spend money than it is to save it. That much is true. But saving doesn’t have to be as hard as you think. Simple things like revisiting your budget or changing up your commute could help you put more money in the bank.