Most people assume that credit cards are something which causes you to spend more than you would if you were just using cash for everything. For many people, that is truly the case. However, it is actually possible to use credit cards to reduce your spending. This can be done through using your credit card to track your spending and create a budget for yourself that reduces what you spend in each area of your life. It can also be done through the use of a low-limit credit card that won’t actually let you spend more than you have.

The main way that you can use credit cards to reduce your spending is to take advantage of the tracking and organizational features of your credit card statement. Many credit cards will allow you to set up a category-based system that shows where your money is going. If yours doesn’t, you can track this yourself by reviewing your credit card statement each month and organizing the expenses in to basic categories. This allows you to easily see how much of your money goes towards groceries, utilities, retail shopping, entertainment, gas and other types of expenses.

Your goal will be to reduce the spending in each of these areas which you can track through the same categorical system on your credit cards. Aim to reduce each area by ten percent from one month to the next. For example, if your credit card statement shows that you spent $100 on entertainment in January, aim to spend only $90 in February. When you get your February credit card statement, double-check to see if you met your goal. Try to do this for each area of spending; it’s generally an easier way to significantly reduce overall spending than trying to just randomly cut back on what you spend.

You can also use the limitations of the card to reduce your spending. Get a credit card with only a $1000 limit so that you are forced to stay within a $1000 budget each month. Alternately, you can apply for credit cards which you pre-pay so that you can’t spend more than what you’ve already put down on the card. There are certain limitations to these approaches. With the $1000 limit card, you risk going over the limit and incurring fees. This requires will-power and good tracking skills of your spending to make sure you don’t exceed the limit. With pre-paid credit cards, you may pay high fees to get the card. Be aware of what you’re spending to reduce the cost of these methods.

Credit cards don’t have to be something that you use to recklessly toss away more money than you have. Unfortunately the nature of their design often causes us to do precisely that. In order to avoid this problem, you’re going to want to make a concentrated effort to use your credit cards in a way that will allow you to reduce your spending instead of increasing it. This requires that you are conscious about where you are spending your money, using the credit card statement to assist you in clarifying this. Making smart choices with your credit cards will let you use them to your benefit instead of to your detriment.

If you take a good look at the people around you today, you might notice that all of the adults are playing with toys. Sure, we call them ‘gadgets’ or ‘electronics’ but these things are more commonly used for entertainment purposes than for the functional productivity that they may offer. For example, the iPhone is good for both voice and data communication but it’s also a toy for playing games and music. If we’re honest, most of us didn’t go out and buy it for its phone functions. The problem with our love of techie toys is that they’re not cheap. If you want to reduce the amount of money that you’re spending, the first thing that you should cut out is your love of toys. (more…)

When you don’t have any money to spend, you simply don’t spend it. You find ways to make your paycheck stretch until the next one comes around. As a result, there are a number of tricks that people with low income employ which can be useful to the middle class person who is trying to save some money.

Here are six areas of life where you can save money if you act as though you don’t have any: (more…)