Many people look at Growth on their money as being the number one priority, but how many people stop to consider the fact that they can make their money grow, just by cutting down on costs.

Developing self-control of your spending is a basic step in cutting the cost of living. Some families instinctively seem to know how to get what they want, even on a limited income. But others need help in managing their finances to get what they need and want. Research shows that people worry more about money than any other family problem. If families communicate and everyone understands what the financial situation is, there will be greater cooperation.

This article may not be read by many people, but rest assured there are people in every walk of life who have difficulty in restraining their expenditure. So if this article helps just one person, then it has been very worthwhile to us.

Setting Budgets & Goals

You and your family need to set goals and establish a plan for earning, saving and spending money. Lack of planning may lead to serious difficulties. By setting budgets & goals, you are taking the first step for solving family money problems. There is no other way to achieve your goals on a fixed income. Design your spending plan to suit your particular circumstances and your goals.

1. Estimate your monthly take-home pay.

2. Write down an estimate of your basic expenses using your previous experience. Do not forget to include those expenses that occur seasonally, such as your insurance. If you are unable to recall the amounts, keep records of expenditures for two or three months. Your expenditures should reflect your goals. Almost every expense can be reduced, if you want to use that money for other goals. The main purpose of the spending plan is to help give you direction in achieving your financial goals.

3. Test your spending plan. A simple spending record shows where your money actually goes. The trial test will show whether the plan is realistic. A good spending record will also locate money leaks, or spending that you never really intended.

Tips for Reducing Expenditure

You probably know of specific things you could do to reduce spending. The following suggestions may work for you:

• Do not let your impulse determine major purchases.

• Avoid shopping when you are down or depressed.

• Before purchasing an item, ask yourself why.

• Reduce the number of trips you make to the shops.

• Take advantage of seasonal sales throughout the year.

• Pre-shop to stop leaks. Decide what you want and why you want it before you go shopping. Make it a habit to compare prices and values.

• If at all possible, try out or try an item before you buy it. This practice will provide you with the opportunity to determine if the item will meet your needs.

• Compare the cost per unit of items available in different sizes. It is not always cheaper to buy in bulk.

• Save on food by planning meals with abundant seasonal items and supermarket specials. Take a carefully prepared list to the grocery store and stick closely to it. Utilize point-of-sale information for comparing product quality and price.

• Save on clothes by planning your wardrobe. Check for fit, and buy only clothes that fit comfortably. Coordinate your clothing and accessory items. Examine care labels for fiber content and cleaning instructions. By taking proper care of your clothes, you will make them last longer and save money on replacements.

• Save on dry cleaning by spot cleaning clothing, furniture and rugs or carpets as soon as a spillage or stain occurs. Purchase items that are washable. Save money by measuring cleaning supplies (detergents, softeners, bleaches) when you use them.

• Save on transportation by selecting an automobile that adequately meets your needs, but does so without extremely high costs. A fuel-efficient automobile will have substantial savings over time. Planning trips in logical sequences instead of doubling back to places you have already been also saves fuel.

• Stay on a cash basis. If you have debts you should accelerate repayment. There is little reason to retain savings that earn 5% interest while you still owe installment debts and loans that carry true interest rates of 12%-20%.

• For your banking services, select an institution with the lowest service charges on your accounts. Some banks do not charge anything as long as you keep your current account above a certain minimum amount.

• Buy property insurance at a reasonable cost. In general, you save by combining several coverages in one policy. A homeowner's policy costs less than separate fire, theft and liability insurance policies.

• When buying insurance, avoid buying on a weekly or installment basis. This costs you much more than payments made every six months or annually.

• House repairs can be costly. Get competitive bids from reputable firms before the work is started.

• Do not waste electricity or the life of the motor running your heaters or air-conditioners by making the fan pull air through a dirty filter. Forgetting to change or clean a clogged filter can burn out the motor and cost you a repair bill.

• Take all steps to conserve heat, cool air and hot water. Use weather stripping, caulking and insulation to reduce utility bills.

• Water leaks are not only annoying but also expensive. Water use charges vary from one locality to the next. A series of seemingly minor leaks, can run your water usage up several thousand gallons a year. A hundred gallons can stream through the tiniest of openings. A leaky toilet can waste larger amounts. So repair leaks immediately.

• Water your lawn, not the pavement. A carelessly-placed or over-powerful sprinkler can send expensive amounts of water washing down the path and into the gutter each year.

• When buying a household appliance, remember that the bottom-of-the-line model will perform its intended function without the frills of the more expensive top-of-the-line model.

• Compare the warranty coverage of the appliances you are considering in your purchase decision. A way to save on the high cost of repairs is to avoid them.

Basically, for most of us Cutting Cost is common-practice but there are some people who, for a myriad of reasons, cannot understand that saving money by cost-cutting is not considered ‘tight’ or ‘penny-pinching’, it is deemed to be prudent financial planning and you would be amazed how quickly you will notice the returns.

If it helps, look at self-made wealthy people and if you were to have an insider view of their personal financial situation, you would see that they employ the “waste not, want not” philosophy to their entire financial being.

For further help, you may want to try out our 'Cost of Spending' Calculator by clicking Here.