10 Rules of Being a Smart Spender

Whether you make $50,000 or $500,000, people always find a way to spend more than they have. That’s why so many lottery winners go broke after hitting the jackpot: they just don’t know how to handle all that money.

The real trick to a life of prosperity is learning to live within your means, whether your salary is big or small. And it’s not a huge mystery. You just need to follow a few simple rules about spending, and train yourself to get more for less. Here’s how:

1. Track your spending. The reason why people get into financial trouble is that they don’t even keep tabs on where their money goes. Start tracking spending to the penny, using sites like Mint or Wesabe to help you out, and you’ll discover a whole lot of areas where you can cut back.

2. Set a budget. Once you’ve seen where your cash is going, set limits for where it should go, and stick to it. Allocating certain percentages for housing, bills, food and entertainment will keep your impulse spending in check.

3. Separate needs from wants. Buy only what you need as opposed to what you want, and you’ll see much of your spending vanish immediately. Food and the water bill are true needs; a bigger flatscreen TV is a want.

4. Use credit sparingly. There’s nothing easier than whipping out that credit card and running up a huge bill. Don’t do it. Force yourself to pay cash, and you’ll spend far less.

5. Comparison shop on the Web. Before making big-ticket purchases, simply scour the Web for a cheaper deal. Sites like PriceGrabber can help you. A few clicks of the mouse could save hundreds of dollars.

6. Clip coupons – virtually. When you’re checking out online, there’s almost always a line for entering promo codes for big discounts. Here’s a tip: Web sites like RetailMeNot assemble them all for you.

7. Use your air miles. When you do use credit, make sure you have a card with a great rewards program, and then take full advantage of it. Rather than letting them pile up indefinitely, use points for buying things you’d otherwise be paying cash for.

8. Negotiate. Whether it’s your credit card interest rate, your cable package, or even that washer/dryer at the local department store, brush up your bargaining skills and talk the salesman into charging less. You’ll be surprised how often it works, if you just get up the courage to ask.

9. Plan ahead. Instead of whipping up a new gourmet spread every night, plan your meals for the week beforehand, and spread the costs out over multiple days.

10. Buy in bulk. Big-box retailers like Wal-Mart and Target may not be good for neighborhood mom-and-pop stores, but there’s no doubting the savings. Load up on bulk purchases of store-brand goods to shave plenty off your monthly bills.