It’s pretty simple: What you save is the difference between how much you make and how much you spend — but it’s tough to save anything if you don’t know how much you can afford to save. So look at your expenses and determine exactly how much money you’re spending and where it’s going.
Extra credit: Audit your expenses by writing down everything you spend your money on for a couple months. The trick is to be as detailed as possible; use a spreadsheet to capture even the smallest purchases. Assign categories for your expenditures such as: housing, automobile, groceries, utilities and entertainment.
5. Your tastes exceed your spending capability.
Understand that this is not a problem so much as an excuse. When your expensive tastes starts impacting your ability to save, you’re in trouble.
Extra credit: Ratchet your tastes down a notch or three — and stop making lame excuses.
6. You can’t say no.
Being able to say no is a crucial skill in the world of personal finance. Those that can’t will always have the most trouble keeping their personal finances on an even keel.
Extra credit: Master the art of saying no.
7. You’re an impulse shopper.
Impulse buying is a nasty habit that can best be cured by careful planning.
Extra credit: When buying groceries, make a list of everything you need. Establish and adhere to a household budget. And always know exactly how much you plan on spending before walking out the door. In short: Think before you buy.
8. You worry about what others think about you.
People who are highly competitive, or worry about what others think of them, often have a predilection for conspicuous consumption, otherwise known as the desire to keep up with the Joneses.
Extra credit: Forget the Joneses; nobody cares. Besides, odds are they’re probably broke anyway.
Len Penzo is a personal finance blogger with a strong disdain for debt. His blog, Len Penzo dot com, has been featured as one of Kiplinger's Personal Finance Best Money Blogs in 2010 and 2012.