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This week's column is the second of two in which I'm offering tips for new college grads and other twentysomethings on how to get a handle on your spending and save more money (read part one).
My expert tipster is Lynne Koplitz, a young woman who does stand-up comedy for a living but whose finances are no laughing matter. The showbiz life can be feast or famine, so Koplitz has perfected a financial routine to smooth out her erratic income and keep from overspending.
For example, Koplitz sets aside money for each category in her budget, from manicures to entertainment. She jots down her actual expenses in a notebook and tallies them at the end of each week to see if she's over or under her estimates. She builds in more than she needs to have a cushion -- and when she comes in under budget, she treats herself to a reward.
Tracking your spending might sound like work, but you don't have to do it forever; even a month will do. Nor do you have to record every penny. An easy alternative is to use your monthly credit- and debit-card statements to see where your money goes. Then you can plug the one or two areas where you're leaking cash, and probably come up with an extra $20 or more per week in savings. That's $1,000 a year -- and a grand is real money.
Other tricks to add to your own savings repertoire:
Start an automatic savings or investment plan with a bank, mutual fund or your company's retirement plan so that money is taken right off the top of your salary, before you even see it.
Have your paycheck deposited directly to savings rather than to your checking account. You can transfer money to pay your bills, but you'll think twice about withdrawing additional cash.
Limit yourself to just one ATM withdrawal a week.
Subtract credit-card purchases immediately from your checking account so you're not surprised when the bill arrives.
When you pay off a loan or credit-card balance, add the amount to payments you're making to the next lender on your list, or send the money to a savings or investment account earmarked for a vacation, a car or a house.
If you tend to misplace credit-card or ATM receipts, get a couple of storage bins into which you can toss the receipts. That simple step will help you get organized.
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