Too many personal finance bloggers are just too extreme in the advice they give their readers.  They expect you to either live like a monk who never spends a dime or haggle over each and every purchase you make because “a penny saved is a penny earned.”

That kind of advice may work for some people.  But for the average person trying to dig themselves out of debt and take control of their spending…it just sets them up for failure.  You can’t expect to change years of bad habits overnight, and if you try to go cold turkey and deprive yourself of everything fun you’ll only be in even deeper trouble when you inevitably give in to temptation and go on a spending spree.

I think it’s much better (and easier) to break those bad money habits if you just focus on spending your money more wisely rather than trying to eliminate spending altogether.  Here are a few tips to help you stay focused on spending wisely:

Live below your means

One of the most important financial lessons you will ever learn is that the way to build wealth is by spending less than you earn.  It’s just that simple.  It doesn’t really matter how much you earn, if you’re spending more money then you earn you’re definitely headed in the wrong direction.

Suppose your neighbor to the left earns $100,000 a year but spends $110,000.  Your neighbor to the right earns only $40,000 but spends just $35,000.  Which is in better financial shape?   If you said it’s the neighbor living a modest lifestyle and slowly building his net worth you win a prize.

Cut out the fat

If you need to reduce your spending then it’s time to take a long, hard look at where your money is going.  Pick a quiet day to sit down with a good cup of coffee and go over all of your credit card bills and bank statements.  I guarantee you’ll find purchases that you wish you could take back.  We all have spending black holes where our money disappears without a trace… you might be shocked when you see how much money you’ve been blowing on parachute pants!  It’s important to identify these trends so you can break the spending habits that keep them going.

Stop using your credit cards

I know credit cards are incredibly convenient, but they can also be dangerous to your financial well being.  Unless you are paying your balance in full every month, every purchase you make it costing you a lot more than you realize.  The more you charge and the deeper you go into debt, the harder it will be to dig yourself out.   And if you get in trouble and miss a few payments the interest rates will skyrocket and you might as well give them your first born child.

Let me say it one more time.  If you’re not disciplined enough to pay off your entire balance every month, don’t pay with a credit card.

Mike Collins

Mike Collins

Mike Collins is obsessed with building new streams of income and achieving financial freedom so he can live life to the fullest with his wife and 3 amazing children. Read more about his adventures at