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First Person: I Cut My Expenses By 25% and Now Live Better

I managed to cut my spending by 25% this year, and I am having a better, more luxurious life than ever. I just bought a new 46-inch TV and redecorated my condo bedroom. So, how am I doing all this while still spending 25% less per year on expenditures? Three easy steps, with an accent on "easy."

Stop shopping online

Online shopping is too impulse oriented. We're more likely to over-spend online than in a real store.

It's convenient to hit the order button and then move on. The $150 online purchase is quickly forgotten, spent on a gadget I don't really need. It got delivered, quick and easy, but by the time the bill came in, I'd done more shopping... and then realize I'd spent $700 this month on … nothing important. That was a common problem before I quit online shopping. Shop as much possible in real stores. It helps you save, and it helps your local economy.

Cash over Credit Cards

Stop using your credit and debit cards for everyday expenses. I pay cash for everything. You'll be surprised at how fast those lines go at the coffee shop when people have cash instead of charging $4 for bagels! I know your bank is trying hard to convince you to use that plastic crutch, but fight the urge. Surely you have the common sense to know that banks just want your money, your debt, your fees. Stop taking orders from your bank. The point programs don't add up to much, compared to the fees you pay and the debt you acquire.

By spending only cash, in stores, I find that I don't "impulse buy" as often.

Last year I spent hundreds less every month, because I only used my credit card three times for airline tickets and once to send flowers. The rest of the year, my cards went untouched. If I put $100 into my wallet, I squeeze every last dime out of it, eager to make it last as long as possible before adding more cash. Over time, the difference is amazing.

The most interesting result is that I have more money, and seem to have more luxuries. I found that if I don't charge up all those little unnecessary expenses, I have a lot left over for the big ticket items I really want.

Cut Recurring Expenses

More than what we spend, what we "commit" to spending causes problems. Buy a new phone, and take on a new $75 per month contract? Buy a cute puppy, but take on a $50 per month expense to feed him and pay the vet? Too many of these, and suddenly you have recurring commitments to pay out a lot of money - every month! Be careful of recurrence bills. Buying a TV is a one-time expense, but committing to a $70 cable bill... that's a bill that keeps coming back.

Spend wisely in a few key areas, and you'll have plenty left over. It's very easy to switch back to cash, and suddenly you'll have more money for savings, travel, and the big things in life.

*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

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