On August 1st, 1834 the Emancipation Proclamation was enacted, signalling our freedom from physical slavery. As we prepare to celebrate, let us be financially responsible. Remember, “Freedom without responsibility is just another form of slavery” and “The price of freedom is eternal vigilance.” Follow the Five Tips for Spending Less below and get on the path to financial freedom.

Five Tips for Spending Less

Everyone knows that if you want to get your finances in order and start being smart about your financial future, you need to make a plan.  This shouldn’t be big or complicated – just a few small steps can make a real difference. The big challenge you’ll then face is following your plan – this isn't a financial issue but a motivational one.  So here are a couple of tips for making sure you plan in a way that make it easier to follow through on your good intentions.

1.   Be very specific about what you want to achieve.  "Save money each month" sounds good, but how much money?  "Pay off credit card debt" is a great idea, but how quickly?  How much and on which cards?

When the steps in our plans are vague, they give us way too much wiggle room. We settle for very small changes in the right direction when actually people are much more motivated when working toward challenging goals.  So be specific and set the bar high.

2.   Once you know how much money you want to save, decide on some concrete actions to get there.  One of the most common reasons we fail to reach our goals and stick to our plans is that we don't translate what we want to accomplish into real, everyday behaviour. 

So turn "Spend less money eating out" into "I'll bring lunch with me to work each day and eat out no more than once a week." And turn "Cut down on my clothing expenses" into "Spend no more than $X on clothes each month". Unless you do this, you'll never succeed in making real change.

Most of us are guilty of buying things we don't really need.  If your finances are in a sorry state, you will need to get a handle on your impulse buying. Out-of-control spending is just another example of succumbing to temptation – for some of us it's doughnuts or chocolates, for others it's gadgets and designer shoes.  Here are three tips to help you resist the temptation to spend

3.   Never, ever shop as a pick-me-up.  When you are tired, anxious, stressed or depressed, your self-control will be at its weakest.  This is a perfect recipe for a bad decision.

4.   When you are faced with the temptation to overindulge, stop and think about someone you know who has lots of self-control – someone who is financially responsible. Self-control is actually contagious. Just thinking about someone who has it can boost your own self-control.

5.   Finally, reward yourself for good behaviour.  Everyone needs incentives.  When you manage to follow your plan for a week or a month, treat yourself to something you want that won't blow your budget. Reward yourself with a little something that speaks to you.

Further advice

If you want to know more, there is lots of terrific advice out there from personal finance experts on how to make and stick to a plan. Use the links below to help guide and keep you on the path to financial freedom. It’s never too late to start.

http://moneymattersbvi.org/ManagingYourMoney/Spending.aspx  

http://moneymattersbvi.org/ManagingYourMoney/Budgeting.aspx

• The Money Management Calculator will also prove helpful.