Curb Spending by Slashing Your Disposable Income

To have more money, spend less money. This is a basic economic truth, but millions of Americans can't seem to apply it to their lives. We fall for impulse purchases or throw money around in front of our friends, then have to put on the brakes and tighten our belts before we're halfway to the next paycheck. Often, this sets off a cycle of debt as we take out costly payday advance loans. Hope lies in the fact that you can't spend what you don't have. If you might make the wrong choice between paying the bills and paying for the next round, it's best to take the decision out of your hands and freeze your hard-to-hold liquid assets. Resist the temptation to raid your rent money by putting your funds beyond your fingertips.

Direct Deposits

If your employer pays you by direct deposit, look into your options; you will probably be able to divide your paycheck between several accounts tailored to your needs and goals. For example, you and your roommates can open a secured account for rent and utilities that can't be accessed without all of your signatures on the check. Your bank may also offer long-term investment plans and savings accounts that cannot be withdrawn from easily, cushioning your financial future and giving you practice at spending more moderately in the meantime.

If you don't already have direct deposit, set it up. Just turning your wages into a bank balance to hoard instead of a pile of twenties to spend may be all the help you need. Additionally, many costs associated with your banking, such as monthly fees, service charges, and balance minimums can be cut or waived if you receive direct deposits. Be wary, however, of bank offers to advance money against future deposits. The interest rates on these advances can add up to big bucks, especially if you get caught in a cycle of taking out new advances to pay back old loans.

Automatic Payments

Most personal checking accounts with major banks can be set to automatically pay for monthly expenses like rent, Internet, car payments, and gym memberships. If you have a long history of spending money that you should already consider spent, schedule your automatic payouts on your payday instead of letting it sit and tempt you until the first of the month. For your utilities and other accounts that can carry forward a positive credit balance, just have your bank pay ten or twenty dollars more than your average usage fees. If the extra pay-in doesn't end up cushioning you from sudden rate hikes, you'll get it back as a refund when you discontinue service.

DIY Layaways

If you already live like a Spartan, you may not feel like making the additional sacrifices necessary to save for large purchases. Layaway plans help you to make steady progress toward the full price of goods like electronics and furniture, items whose price tag may equal the rest of your already hard-to-cover monthly expenses. Unfortunately, many stores that used to offer layaways are now more interested in getting you to finance purchases or take out store-brand credit cards at astronomical interest rates. Happily, there's an easy way to make incremental payments even when a seller doesn't offer a layaway, or the privilege of making payments comes with an extra charge you can't afford.

These days almost every retailer offers a gift card or certificate that spends like cash. Become your own layaway department by buying one every pay period and squirreling them away until you've amassed your total. Gift cards more than a few months old can still devalue in some states, so spend the most you can afford every month to reach your big payoff quickly. This is even better than a layaway for purposes of freezing your runaway cash flow: layaways can be cancelled and the funds recouped (and frittered away), but gift cards are nonrefundable.

Extra Withholding

If all else fails, let the government be your piggy bank. Reinforce your budgeting decisions by declaring wages in excess of modest living expenses as extra income tax withholding. This diverted cash will come back in your refund, and with a firm plan for where all that money will go, you can make annual steps toward purchases and investments that will serve you well for years to come.

Having your extra money lodged someplace useful instead of burning a hole in your pocket may be what finally teaches you to live within your means. Decide how much you need to survive every month, leave a tiny cushion in case of emergencies, and then give these techniques a try. Yes, your adjustment period may be uncomfortable. As any successful dieter will tell you, though, self-denial becomes its own reward once you see results: in this case, your more pleasingly plump net worth.