Start using a “spending system”

The best way to keep your spending in check is to have a system that gives structure to your day-to-day finances, and removes the guesswork from trying to spend less. Your system can be as high-tech or low-tech, as simple or as complex as you’d like. Here are some effective methods to consider:

The jars. Place a budgeted amount for each spending category (for example, “groceries,” “entertainment,” “transportation”) into a labeled jar or envelope. When the money in each jar or envelope starts to runs out, you make trade-offs or curb spending until it’s time to replenish.

Three questions. Before you buy anything, ask yourself three questions: (1) Do I really need this? (2) Do I have the money in the bank to pay for it right now? (3) What will happen if I don’t buy it? Only make a purchase if the first two answers are “yes” and the third answer is convincing.

Pay yourself first. Divert a specific amount of your income (such as 10% or $100) directly into savings as soon as you get it. The rest is yours to spend as you need and wish. Read more about why paying yourself first is so important.

3 easy techniques to limit spending and stick to a budget.