1. Your values and priorities should be the basis of your spending plan. If knowing that you are prepared for a comfortable retirement, unemployment, or college for your kids matters to you, then that should be reflected in your day-to-day spending and saving. If these needs are already taken care of or not relevant, then what other plans matter to you: travel, art, experiences?
2. A cash flow plan may be needed as well if cash is tight and timing delicate.
3. Spending should never exceed income except for true emergencies.
4. Big purchases should be acquired, when necessary, through advance savings rather than credit.
5. Credit card bills should be paid off in full and on time every month .
6. Savings for emergencies and retirement (and college, if there are children) should come before discretionary spending; rainy day savings should equal six-months income (roughly the time it would take to find a new job) to be secure. Savings for different purposes (such as college or retirement) should be kept separate to prevent confusion and failure to provide adequately.
7. Comparison shopping is important for small purchases as well as large, and for services as well as for goods. There are great differences in cost of different banks, credit cards, insurance and all other services.
8. Analyze spending to look for ways to reduce expenses. The Internet provides endless resources for finding ways to lower your costs.
9. Avoid impulse shopping – make a list before going near any store. Allow at least 48 hours to elapse between your perception of wanting something and actually getting it to allow your better judgment to make a more rational decision.
10. Before buying a new item, use up the old one.