A lot of people outspend their income every month. What most people earn from their jobs is simply not enough to meet their needs; hence most people take on a second part-time job or start their own business to supplement their income from their main jobs.

In addition to finding ways to increase one’s earnings, there are several key ways through which you can reduce your expenses; manage your finances better and start saving some money.

1. Pay off or consolidate your credit cards. In order to save some money, it is very important for you to be in control of your credit cards. It is very easy to spend more than we earn because we have credit cards. You pay high interest on your credit cards, so it is important to prioritize clearing your credit card debts. If you can not pay off your credit cards yet, try to consolidate them into one credit card with a lower interest rate and one single payment in a month. By simply paying off your entire credit card bill each month or using a check, cash or debit card for purchases, you can save a lot of money each year in lower credit card interest charges.

2. Set up an automatic bill paying system. Paying your monthly household bills is obligatory, and it is important that you make this is as easy for you as possible. Set up automatic payments of your monthly bills so that you pay on time and minimize charges for late payments, which cost you money. If you can not do automatic payments of your bills through online banking, then put your bills in one place every month, and allocate a day in a month when you can pay off your bills; and it is ideal if this day coincides with your payday. By paying your bills as soon you get paid, you minimize the risk of you overspending the money you will need to pay your bills.

3. Apply for a debit card. Unlike a credit card, a debit card ensures that you spend money that you actually have. Since the money will be coming out of your own check account, you will tend to be more responsible with the purchases you will make with your debit card.

4. Have a savings account. Life can be full on unexpected expenditures, and it is important to set aside a certain amount of money every month to meet these ‘emergency expenses’, no matter how small the amount is. In the long term, the money in this account will accumulate; and should an ‘emergency’ expense occur, then you have some money to use, and you will not need to borrow any money or use your credit card. During the months when you can save more money, make an effort to put more money aside in your savings account.

5. Keep track of your monthly expenses and checkbook. Although it is not fun doing this, but if you want to keep control of your finances; then it is very important for you to keep track of your monthly expenses and checkbook. This will help you know the purchases you have done in the month, and how much money you have in your account. Most importantly, this will also help you assess the expenses you have incurred which were really ‘necessary’ and those that were not necessary, and are to be avoided in the future. This process gets easier every month, and your savings skills are also improved as you assess your monthly expenses.

6. Shop around for best deals. If you want to reduce your monthly expenses, it is essential that you shop around for everything. Make an effort to get the best deals for your purchases from your car loan to your mortgage provider. You will be amazed at how many savings you make if you shop around. There is a lot of competition in the market, and all companies are doing all they can to attract customers and increase their sales. By taking advantage of these ‘offers’, you can get some good bargains which can save you some money.

7. Use your bank’s ATMS. Although Automated Teller Machines are very convenient, they can also be costly if you do not use your bank’s ATMs. If you use an ATM that does not belong to your bank, you can get charged a $0.50 or $1.50 fee. Although this is a very small amount, in the long run it adds up; hence you end up having paid a large amount in a year.

8. Learn to live within the limits of your income. Although this is the hardest approach in helping you save some money, it is the most effective one. If you can not afford it, do not buy it. It is important for you to think twice before you buy it with money that you do not really have – like using your credit card. It is very important for you to learn to live within your income.

9. Change your spending habits. There are various expenses which you can cut down in your household, so it is essential for you to constantly identify all the ‘little’ ways through which you can save some money. Few examples of the things you can do is to refinance your mortgage or car loan to a lower interest loan, stop purchasing impulse items, avoiding eating out too often and try to do more activities at home. Once you start practicing these cost-cutting strategies, it will become very easy for you to save money. By simply changing your habits and staying committed to saving money, you can save some several hundred or thousand dollars in a year.

10. Do ‘things’ for yourself. These days, it is very easy to get almost everything done for you. Car washing, gardening or lawn mowing, carpet cleaning and car servicing are some of the various things we can do for ourselves and save some money.

By simply following the main strategies outlined above, you can start cutting your expenses today. Everyday, do something differently and in a way that contributes to you saving more money in the long term. If your needs simply exceed your earnings no-matter how much you try to reduce your expenses, then it is important for you to find ways of supplementing your income, such as starting a home-based business.