Tips on Money Management

Making the transition to a money-conscious lifestyle is difficult, but with careful money management it can be done. Getting a tight grip on your money now rather than later can save you thousands over the course of a year and will help guide your money in the right direction.

Keep Track of Usage

Bills fall into one of two categories: flat fee and variable. Bills that fall under the flat fee category include Internet, cable and rent/mortgage. Bills that fall under the variable category are cell phones, groceries and utilities. Seeing as how variable bills are strictly dependent upon your usage, take the initiative to track your usage throughout the month to avoid being surprised by an exorbitant bill at the end of the month.

If you are a parent of teens, check cell phone usage online twice per week to see whether your children are nearing the allotted limit for minutes and text messages; if they are nearing the limit, warn them to minimize cell phone usage to free night/weekend minutes and emergencies only.

To track your electric bill, use an energy-monitoring device. There are several types of energy-monitoring devices on the market. For example, take the Kill a Watt energy monitor, which allows you to perform your very own DIY energy audit on your appliances. All you have to do is plug in the energy monitor and the appliance into the same outlet and the device will read the amount of energy used by the kilowatt hour. Another cost-efficient energy monitor is the Energy Detective Monitor. This energy monitor displays your current energy usage and your real-time electric bill and projects your monthly electric bill based on your current energy usage. There are dozens of energy-monitoring devices on the market to suit the price ranges of all consumers; prices range from $25 to $200.

Nix the Unnecessary

Be honest with yourself about your family's spending habits. Does your husband really need the "Total Sports" cable package, which adds $30 to your monthly cable bill? Do you really need your daily 20-oz Caramel Macchiato from Starbucks, which sets you back $4 each morning? Would you survive if you canceled your HBO subscription, which costs an extra $15 per month? Cutting back on unnecessary spending each month can amount to quite a bit of savings at the end of the year. What would you do with an extra $1,980 per year or $165 per month? That's what you would be saving if you cut back on all of the unnecessary spending mentioned above. Your spare money is better applied toward paying off debt or accruing interest in your bank account.

Don't Be Afraid to Clip Coupons

Clipping coupons is another tactic that will help you save a substantial amount of money each month; it will help you get more "bang for your buck" and often get items for free. The first step to effective coupon clipping is being informed about your supermarket's coupon policy. For example, Wal-Mart accepts manufacturer coupons, store coupons, soda bottle caps, pharmacy coupons and Internet coupons with a scannable bar code.

Long gone are the days where you have to eat up an entire Sunday afternoon clipping coupons from the newspaper at your kitchen counter. Now there are websites that display manufacturer and store coupons online and allow you to print coupons from your home computer. For example, coupon.com allows you to scan through pages of coupons on its website; when you come across a coupon you simply click and print. Tip: When you go to the supermarket, print out the store's coupon policy to have on hand just in case the cashier gives you any problems.

Are you still hesitant when it comes to clipping coupons? If so, the coupon experiment carried out by "Good Morning America" will likely sway your decision. "Good Morning America" enlisted two women, one being Stephanie Nelson of CouponMom.com, and sent them to the same supermarket, equipped with the same shopping list. The only difference between the grocery shopping trips is that one woman (Stephanie Nelson) was equipped with coupons and the other wasn't. The grand total of the shopper without coupons was $77.97. The pre-coupon total of Stephanie Nelson was $112; after coupons: $36.85. Stephanie Nelson says, "You really want to use coupons when the item is on sale. That's how you save 80 to 90 percent."

References

• Good Morning America: Coupon Clipping

Resources

• Five Sites for Your Finances