Getty ImagesIf you've ever lost sleep over your bank account, you're far from alone. Seventy-five percent of Americans are stressing out about their cash flow, finds a 2008 poll from the American Psychological Association. We promise that you'll rest easy from now on. As with diet and exercise, success is about taking small steps that lead to a big payoff, starting now. Try these tips below, and sign up for the full program at Self.com to help you realize your dreams, next week and 30 years down the line. And just by registering, you're entered to win a luxe three-day stay for two at The Mirage Las Vegas!
By MP Dunleavey
Sit down with your bank statement
Read your bank or credit card statement over a coffee. In the time it takes to down your java, you can plug spending leaks (do you really need to eat out four nights a week?), check charges (retailers make mistakes, too) and save money by canceling services you don't use (yes, Netflix is convenient, but only if you actually watch the movies). Repeat twice a month.
Where do your dollars go? If you haven't got a clue, try this radical experiment.
Think less, save more
Whether you're swinging from paycheck to paycheck or not, the amount you save probably has less to do with how much money you have and more to do with your habits, studies show. But because putting dollars away for the future doesn't come instinctively to most of us, the best way to get in a saving groove is to set up an automatic transfer from your checking account to your savings account for the same amount each week or every time your paycheck is deposited. Start with as little as $10 and increase the number each month. You can set up the transfer from your checking account in minutes, online. In fact, maybe you have a few minutes right now!
Splurge without regret
To learn which luxuries you can (and can't) live without, play a version of the either-or game (chocolate ice cream or mango sorbet?). You might like both, but you have to pick: another sweater or slingbacks. Once you have a feel for how often you can indulge in your top treats (twice a month?), you can save without skimping on delight. (Besides, you can live your dream life on any paycheck!)
Write down these four numbers
Can you afford that car payment or the latest iPhone? Making smart money moves requires knowing where you stand financially--which means keeping the answers to these four questions close at hand, according to Galia Gichon, who created My Money Matters, a kit of money tips and tools. Ask yourself: (1) What do I owe? (e.g., credit card debt, student loans, mortgage); (2) What do I own? (retirement accounts, savings); (3) What do I spend? (total monthly bills and expenditures); (4) What do I earn? (gross yearly income, net monthly total). There's no magic formula; the payoff here is knowledge and increased confidence. Nailing down the numbers may take 15 to 20 minutes the first time you do it, but once you know them, not only will you feel more in control of your finances, you'll also be able to make money choices you can feel good about. (This easy five-step plan will help you save more and spend less, without scrimping.)
Just walk away
Research has proven what any woman could have figured out for herself. Once you start shopping, it can be hard to stop. To thwart what experts call the shopping momentum effect (and the shame that inevitably follows), ask yourself three questions before you buy: (1) Do I need this right now or can it wait? (2) Am I shopping out of true necessity or a desire to spend? (3) Do I know what I want and what it costs, and can I walk out of the store happy once I buy it? If you're tempted to continue spending after your initial purchase, hit the brakes and distract yourself by taking a walk--but not in a mall. Just think: If you skip a few unimportant splurges here and there and sock away an extra $2,000 per year in your 401(k)--a mere $38 a weekend--in 30 years you could end up with an impressive $294,000. That's a lot of shoes!
Read the rest of our smart-money tips here!
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