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The Normal Person’s Guide to New Year’s Resolutions: Spending Less and Saving More

Advice from an accountant for professional athletes, a guy who got himself out of $100,000 in debt and more

Nearly half of all Americans spend their entire paycheck — or more — every month. It’s no wonder: Shit’s expensive these days, and raises are hard to come by. And despite the recent uptick in the stock market, the idea that the economy has improved in recent years seems theoretical and not at all related to everyday finances. Not to mention, the majority of financial advice out there seems to be far outside of most people’s grasps.

It’s no wonder then that saving more and spending less always cracks the lists of most popular New Year’s resolutions. But to do that, you’ve got to do more than tighten your belt: You’ve got to know exactly how many notches, and when it’s time to loosen it enough to allow yourself to breathe now and again. To help us all become smarter about money, we found a few experts to loan us some advice (if not a few dollars).

James Conole, financial planner: Credit cards dull the pain of any purchases we make. Maybe we have a monthly $250 budget for dining out, but what happens when we’re already over budget and our friends want to go out for dinner? We just tell ourselves we’ll put the dinner on our credit card and deal with it next month.

This is the behavior that leads to overspending.

Try paying with cash instead: At the beginning of each month, take out $250 cash and only allow yourself to use that cash for dining out. Once the cash is spent, you’re done for the month. This will prevent you from overspending, but it also hurts a lot more to pay with cash then it does to pay with credit. So you’ll notice that you start making better decisions about what you spend your cash on.

You don’t have to do this for every category of your budget, but try to do it for the areas that you tend to overspend on (usually food and drinks and entertainment). Once you learn to keep overspending in check, you’ll be surprised how much more you can save!

Benjamin Van Loon, a guy who saved his way out of $100,000 of debt: The first step to spending less and saving more is in the head. We’ve been conditioned to want — and get — our single cookie now, rather than two later. But that’s shortsighted, especially if you can’t even afford a cookie in the first place. Admitting that much is the first step.

Everything else is careful planning. You know how much the cookie costs, so take a list of your obligatory spending (food, rent, insurance, etc.), see how much you have left afterward and hold onto it. This is a savings account, a Roth IRA, an Acorns account, a sock under your pillow. This is also making your food at home, not ordering a cocktail or waiting until the movie is free on streaming. It takes honesty and sacrifice, but eventually, you’ll get your two cookies. Or if you do it right, you’ll get the sugar, flour, butter and chocolate chips to make your own.

Or you could just wrack up a ton of credit card debt and bring it with you to the grave.

John Karaffa, accountant for professional athletes: One of my biggest tips for how to save more money is to live like a college student. It doesn’t mean you have to eat ramen noodles all the time, but the mentality of living on as little as possible really works. The professional athletes we serve who keep some of their college frugalness serve themselves well. I use the phrase “live like a college student” with them in an effort to try to get them to keep their spending in check, while their memory of their college days is still fresh.

All too often, when people experience sudden wealth, their spending increases to a new stratosphere. It’s best to be frugal and humble and save your money for your future.

Manisha Thakor, author and innovative wealth manager: It can be helpful to have an internal mental “ruler” against which you can rub up your choices. My favorite way of doing this is to employ a concept I call “joy-based spending.” The idea here is to track your spending — ideally for a month, but even a weekend will do to get you started. At the end of the time period, go back and review your spending with a yellow highlighter in hand to highlight anything you spent money on that did not bring you true joy. Typical answers include things like the cable bill (solution: reevaluate how many channels you really need) and can be as varied as dinner out with “friends” that don’t make you feel good about yourself, or soccer lessons where the kids hate the coach and you hate driving them there.

The idea is to see where you’re “leaking money” on things that don’t light up your soul. By cutting them out, you aren’t lessening your happiness, but you are increasing funds available for savings!