Image via Wikipedia

Early in our marriage, my husband and I had ourselves convinced that we were doing everything we could to pay down debt and set aside some savings. “It’s not like we’re spending money on things we don’t need,” we’d tell each other over and over again. “We really need to spend money on this.”

Of course, looking back, all those arguments seem rather hollow. When I look at the “necessary” spending that kept us from saving more, or the excuses that were used to justify putting “just this small purchase” on the credit card, it seems so silly. Of course we didn’t need a 19-inch TV to replace the 13-inch TV I had won in a high school raffle, or to go out someplace nice once a week for date night. We didn’t need to move into a three-bedroom apartment when we had our son; a two bedroom would have suited just fine (and been $150 cheaper each month). And we certainly didn’t need cable.

My eyes were opened a bit in 2004 when my mom got us Debt-Free on Any Income, a book that pointed out that most households waste between 10% and 15% of their monthly income. What if you took that wasted money, the book’s authors asked, and put it toward debt reduction and then toward savings? I began looking at our money habits in a whole new way. We really weren’t saving all we could, and a lot of that was due to the fact that we were spending money on things that we really didn’t need — or even want in some cases.

Saving More

It is possible to increase your savings to an emergency fund, or to a retirement account. However, you need to take the steps necessary to create a spending plan that works for you:

1. Determine your priorities: The first thing you need to do is decide on your financial priorities. What is important to you? What do you want your money to accomplish? Having a little fun, and spending some money on things that you enjoy is not wrong, but you should make sure that these are things that give you true pleasure, rather than spending money on things that you are mostly indifferent about.
2. Find the waste: Next, look through your spending and find the waste. Keeping track of your spending for a month or two can help you pinpoint where the waste is. Find expenditures that do not match up with your most important priorities, and begin looking for ways to cut those out so that you can save more.
3. Create goals for your money: Once you know your priorities, you can make goals for your money. If you want to build up your emergency fund, pay down debt, save up for a vacation or put more away for retirement, these are all goals you can make based on your priorities. Start with the goal that aligns with your highest priority and go from there.
4. Make a plan: In order to reach your money and savings goals, you need to have a plan. Based on your priorities and goals, and armed with information about where you are wasting money, create a spending and saving plan that will help you accomplish your goals. Cut out wasteful spending that isn’t helping you reach your goals, and, if necessary, look for additional income. Sticking to the plan may require a little discipline, but you are more likely to reach your money goals if you have an active plan to follow.

Only you can take charge of your money life. Take an honest look at your finances, and see where you are wasting money. You might be surprised at how much you could be saving — once you trim the waste.