Financial Baby Steps, Step 4: Watch Your Spending

Broke (adj.): (1) Having completely run out of money. (2) Being completely effing spent


These days, it seems like the cost of everything is UP:
Gas prices are up
The cost of living is up
Unemployment is up
Energy prices are up
Healthcare costs are up

Can you guess whats down? Employment and salary increases.

But you need to spend money to live, right? Of course you do. There's a cost to pay if you want to be a bawse. Problem is, some people have bawse tendencies but don't have bawse tender. Fret not because it is ok to first learn to live within the means you have before you can handle an increase.

Here are 7 things you can do to limit your spending:

1.Track your spending. Write down every PENNY you spend. I know it sounds absurd to ask you to write down what you spend in order to limit the amount of money but stick with me. I know many of us have smartphones with banking apps and thats awesome. Checking a banking app is easy. You can use your debit card and then check your receipt against the actual charges. Thats makes impulse spending easy. No emotion goes into that. If you get into the habit of actually writing down your spending 2 things will happen: (1) it will serve as an opportunity for you to think twice before you buy something you don't need and (2) you can see where you spend the most money. Seeing it all on paper will help you see where you can make cuts.

"People who don't have money, spend money to look like they have money while wealthy people spend like they don't have a pot to piss in."

2. Do well. Doing well in school can earn you scholarships and you will have the first dibs on good jobs. For those of you not in school, do well at work. If your job offers bonuses, you can earn them by allowing people to see you doing your job well. Doing well also leads to promotions and more money. Before you go off and become the ultimate brown-noser, recognize that doing your job well does not always mean kissing up to your boss. It does mean you should do your part to make sure they KNOW you're doing your job well. Your boss should know more than just your name.

3. Limit your vices. If you go to a club ($20 admission AND $20 valet) and get a drink ($13) twice a week that number adds up to over $200 a month. If you enjoy having a drink with friends here and there, consider going during happy hour because the drinks and food will be much cheaper. My favorite spot is incredibly expensive but during happy hour I can get a $23 gumbo for $5! Don't think you ciggie smokers got off easy. I'm not sure how much a pack of Newports cost nowadays but I saw a sign for a carton a few weeks ago that was $23. Cutting back on your vices will free up money.

4. Buy used when possible. Depending on where you live, thrift stores are hidden treasures. "Thrifting" is fairly popular in the district so you don't have to be embarrassed to shop there. The clothes and jewelry are sometimes vintage one of a kind items. I admit I thought shopping at thrift stores was thee most gross thing ever but I got over it after I copped a vintage necklace and designer dress for next to nothing. Whats more, I can wear them both comfortably without worrying about someone else copying my style. Apply the same logic to certified used cars, and other consumer goods.

For college students,  used textbooks are a good place to start. Also consider that you won't get anywhere near the price you paid if you decide to sell the book back. I once took a $150 science book to a buyback window and they offered me $23 and even tho it pissed it me off I accepted the money. I was not a science major and I knew the book would end up just collecting dust. I later found a treasure inside of a bookstore off campus that specialized in selling used books.

5. Sell things you don't want. If you have books or clothes you don't want, create an E-bay and Amazon account so you can sell them to people who have a need for them. Its a win-win.

6. Obey the law. It sounds silly but don't dismiss it. Don't speed. Wear your seatbelt. In the District we have photo enforced traffic light and speed limits so you don't even have the opportunity to talk your way out of the ticket. Thanks to those amazing cameras, 2 months ago I spent $90 on tickets. I sure wish I could have spent that $90 doing something more fun.

7. Get a part time job. If you find yourself broke, you have to consider what you are willing to give up. If you are willing to sacrifice 6 months of nights and weekends you could get a part time job. You could make your money go even farther if you work at a store where you frequently shop. Why? Discounts of course! You know you will shop there anyway so why not shop for a discount?

Before you go on a spend-cutting spree, remember the point of cutting your spending is to save. It is not to find money to spend in other places. As you watch your savings account grow, resist the urge to go back to your old bad habits thinking you can afford to be reckless again.

The more you know.