However, often times, even with a clear knowledge of our limited resources we find ourselves living luxury’s we cannot afford. Thank you credit cards! The purpose of this post is to give you three basic tips on how to limit your credit-card debt.

Fun Fact: The average American household has at least ONE credit card with approximately $11,000 in credit-card debt.

1. Borrow only for those things which are MOST essential. Borrowing for college, a home, or a reasonable car is OK. Just remember, don’t ever get into so much debt that you can’t afford to pay it back.

2. DO NOT purchase with credit those things that you consume quickly. If you can’t go out to eat this month, that’s ok! If you can’t go to the movies this month, that’s ok! There’s no easier way to swamp yourself with debt than to use your credit card to purchase your day-to-day items. If eating out or going to the movies is something you love but can’t afford right now, save a little each month until you can (there’s no movie worth paying interest on for the next few months!)

3. Control your spending. Write down everything you purchase on a daily basis and at the end of the month weed out those things which are not essential. Believe me, this will put a few extra bucks in your pocket. There’s nothing worse than not knowing where or when your money has been spent (and even worse if you realize too late that somebody else has been spending it for you…).

1) Eat first. Don’t go to the store hungry, you will be tempted to buy more than you need.

2) Choose the right store. If you like fresh produce find a store that sells the freshest fruits and vegetables (they will last longer and taste better.)

3) Watch the scanner. Mistakes are easy to make, but you don’t want to have to pay for them. Be observant and watch the prices as they pop up on the screen.

4) Don’t be afraid to try the store brand. I was pretty brand loyal to Kraft when it came to Mac and Cheese. I decided to have a taste test with a few different brands and see if it really was the best. I found that I liked the store brands almost just as much. Often you can’t even tell a difference.

5) Live on the edge. All the healthful foods are on the outside perimeter of the store. Once you start going down the isles is where the processed foods are located. Stay healthier by living on the edge.

6) Make a list. This will help you stay focus on the things you want and need. It will also help you plan and organize your meals.

7) Make one big trip. Making a list is a key tool to help you achieve making one trip to the store. It will save you time not to mention money on gas.
Know what you use. What type of foods do you eat or use often in cooking? Stock up on these items and buy in bulk when they are on sale. Items like flour, sugar, salad dressings, ketchup, syrup, egg/milk powder, cake mixes, etc. can be great things to have on hand and buy when you can get a bargain. 

Make a goal to become a better grocery shopper!

Education spending will be hit hard in this year’s budget cuts. Nine billion dollars of education spending has been cut from the budget. What does this mean for school systems in California? A rough year. With the unemployment rate over 11% and the housing market still in shambles, the Californian economy has had a rough year and state programs will bear the brunt of the budget deficit.

The number of students per classroom will undoubtedly rise and supplies will be limited. Although California is already projecting a shortage of college graduates to fill future employment needs the University of California and California State University systems will face budget cuts as well. Enrollment will be reduced by 40,000 students this next year – in a state where only 56% of high school graduates go onto college. Tuition and fees will increase by at least 10 % while community colleges may charge significantly more. This will undoubtly hurt higher education in the state as well, but with such large defecits there were limited alternatives. The numbers are scary, but they speak for themselves.

Studies have found that when a person gets married he or she acquires more wealth than when a person remains single. It is reasonable then to acknowledge that getting married puts you on a positive financial path.

Although marriage strengthens a person financially it is will be difficult at times. It is important to know this and plan ahead. When two people are planning on getting married they should create a financial plan.

Many marital frustrations stem from financial disagreements and headaches. When you stick to a financial plan there are minimal surprises and maximun trust.

Just as some businesses dissolve some marriages end in divorce. Divorce decimates the finances of a couple as it divides the money and costs court fees. To avoid going down this route make sure to have constant open communication regarding your finances. This will prevent you from getting too far from your planned path.

If you treat your spouse like a partner your marriage is more likely to last. The more in line you are with financial goals the stronger your love will grow for one another.

• Making a grocery list
  If you already have what you are going to buy written down when you enter the grocery store you won’t be tempted to buy and spend more than planned.  It is a great way to not be sucked in to great sales on items you want but don’t need.

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• Coupons
  You already will have your list of groceries written down so plan ahead.  Get online and get coupons for the items you are buying so you can get the best deal possible on everything. Click here for my favorite coupon site.
• Don’t buy prepared food
  It is worth saving the extra dollar or two to shred your own cheese or cut up your lettuce.  Those extra $2 could cost you $104.30 by the end of the year if you spend $2 more a week.  Wouldn’t your wallet love a little extra money?
•  Buy Frozen Veggies
  I love them because they never go bad.  Cheaper then fresh and never go bad? They are healthy, low calorie, and a super great buy!
• Shop alone
  Have you ever noticed a difference in the bill when you take people grocery shopping with you? (husband, wife, children) Go by yourself! In a month I am sure you will notice a little extra money in the food budget
• Shop the perimeter of the grocery store
  If you don’t go up and down the aisles you avoide processed foods.  You get plenty of healthy options but still are able to save buy not paying for packaged foods.
• For protein learn to go for eggs, legumes, and canned tuna or canned chicken (in water not oil)
  These protein sources are all very cheap and still help keep your diet balanced. 
• Go for the generic
  You can get the same quality of food, but you don’t pay for the name brand.  An easy way to save money but sometimes we forget that the generic is just as good as the known name.  Try it out, you won’t notice a difference
• Eliminate sports drinks, soda, and juices
  They are usually packed with sugar and you need water.  Tap water=cheap. Try keeping water bottles of tap water in your fridge so you pick that when you go for a cold drink.

There are habits that make us rich and habits that make us poor. Knowing the difference can help us in our finances. So let’s look at the habits of people who are struglling financially.

Some habits that make your struggle financially are using a lot of credit cards, not having a savings account, spending your whole paycheck, not comparing prices and using coupons, not creating a budget and lots of other things I’m sure. But we want to be rich, right? We don’t want to know about what not to do so much as we want to know what to do.

Fine, here’s what rich people do: they save and invest! That’s about it. Aside from eschewing the habits above, they make their money work for them. Not many people can have salaries in the millions. So why are there so many millionaires? Wise investing and saving. They didn’t spend all their money each paycheck they got. They put some away and let it grow in investments.

Why do I share this? Because tax day is coming up, so lots of us should be coming up with some tax refunds. What are you going to do with that refund? Buy a TV? Go on a vacation? Might I suggest an IRA, a Mutual Fund or some other investing vehicle? Contribute to it monthly and watch it grow. By the time ten years go by you will be surprised and amazed at how much money you now have.

Regardless, most people should divide their paycheck like this:

Rent/Mortgage: 30%
Groceries/Food: 10%
Utilities: 10%
Debts: 10%
Auto/gas: 5%
Household: 5%
Discretionary Allowance: 5%
Savings/Investments: 25%, everything else

The average person would be wise to structure their monthly income this way.

Here’s the four step process to simplify living within your means:

Step 1: Figure out how much money you are making.

Step 2: Figure out how much money you need to spend to survive.

Step 3: If the number in step 2 is bigger than the number in step 1, sign up for welfare. If the number in step 1 is bigger than the number in step 2, then you can live within your means.

Step 4: If you can live within your means, then don’t buy things you don’t have the money for.

It’s really that easy! For example, if you want that new grill really, really bad, don’t buy it if you can’t afford it! Don’t put it on a credit card, don’t get a loan, just don’t! Save some of your money each month until you have enough to buy that grill. Same goes for anything else.

Living within your means is as simple as being disciplined. Credit lures you to spend money you don’t have. You have to stand strong against the temptation.

So that’s it! Start following the 4 step live within your means process and enjoy your life!