Improve Your Spending Practices

The following is a guest contribution from Paul S. Richard of the Institute of Consumer Financial Education (ICFE). The ICFE was founded as a non-profit organization in 1982 to help consumer improve spending habits, increase savings and use credit more wisely. Working in cooperation with government and business, the ICFE offers several certification programs with Continuing Education Units and Professional Development Units.

Young Americans are taking retirement planning seriously. A new study shows they are “frantic” about having enough cash to live on after 70. The following tips will help consumers improve their spending practices:

1. Create a plan of action to make the necessary changes.
2. Construct a cash-flow sheet showing income and outgo.
3. Set up and implement a monthly spending-plan.
4. Discontinue use of all credit cards.
5. Collect cash purchase receipts.
6. Review insurance coverage for duplication.
7. Begin saving one dollar-a-day and all pocket change, every day.
8. Seek lower cost alternatives to spending, such as rentals, reconditioned products.
9. Utilizing cents-off coupons and mail in for rebates.
10. Wait for the sales. Comparison shopping can save more than 50 percent.
11. Take advantage of seconds, rebuilt and used items where practical.
12. Start doing things for yourself that others were paid to do previously.
13. Have meetings on improving spending with family members.
14. Separate shopping trips (when comparing prices, value, reparability, etc.) from spending trips (when actually making the purchase). Avoid carrying credit cards, much cash or a checkbook on the shopping trips.

People whose spending may need a little mending in order to come within suggested budget and expense guidelines often discover they are paying too much for things because they fail to comparison shop. That practice, like borrowing to meet regular expenses, is another form of overspending. It is everyday spending decisions, and especially credit based spending decisions, that will cause severe erosion of one’s financial future.

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