1. Create a budget Creating a budget is the first step in your road to recovery. If you don’t know how much you are making and need to spend how will you know if you are overspending? To get started you need to make a list of your expenses for each month. Include the mortgage payment, utility bills and car payment. You then need to set aside money for gas, groceries and entertainment. You also need to budget some money in case unexpected expenses should arise. In addition, saving money should be a part of your budget. You need to stick to your budget. If you are going to exceed your budget, you do not need to buy it. It is important to live within your means.

2. Pay off debt

Paying off debt can be hard, but it’s a MUST if you want to have flexibility with your spending. If you have no credit card debt or loans, you will have extra money to save. Start by paying off your high interest credit cards, then working down the list. Sites like Mint.com provide tools that will help you know how much to pay each month, and project when you will be debt free. If you have too much unsecured debt, you might consider debt settlement.

3. Cut back on expenses

You will be able to save more money if you eliminate superfluous spending from your life for a short period of time. You can stop going out to movies, or you can stop eating out. You do not need to attend the sporting event, or you do not need a new designer sweater. Just live within your means. Yes it’s hard, but so is having your only mode of transportation break down on you and not having a way to take care of it.

4. Use coupons

Many people think finding coupons can be very time consuming. However, I have saved a significant amount of money by using coupons. You can find coupons in the paper, or you can find them online. They will be very beneficial when you are purchasing groceries.

5. Save energy

Make sure you turn off the lights when you do not need them, or unplug your electronics when they are not in use. When you are not at home, turn the air up in the summer and turn the heat down in the winter. This will save you money on utility bills. Living paycheck to paycheck can cause a lot of unnecessary¬†stress, and will not give you the ability to live the life you want to live. By following the tips above you can pay off debt and start building up your savings. If you have any tips to add to the list feel free to leave them in the comments.   Image Credit: Freedigitalphotos.net
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