Reducing everyday expenses is the other half of the money equation

As the old adage goes, "The more you make, the more you spend." Unfortunately, that saying seems to have become accepted wisdom for many American households. In fact, getting that long-awaited raise or moving across the country for a better-paying job may not solve your money worries. That's because household income makes up only one side of the budget ledger.
The other side consists of expenses, all those routine costs that eat away at your bank account. Over the long run, prudently reducing ongoing costs — when coupled with disciplined saving and investing — often leads to greater wealth accumulation than climbing the corporate ladder or snagging a larger paycheck. Here are a few suggestions for cutting back on routine household expenses.

• Learn to live without. How many cable television channels do you really need? If you're paying for premium service, but only watch a handful of shows, perhaps it's time to revise your service plan. Trips to the gourmet coffee shop may become an expensive habit as well. Consider brewing a pot at home once in a while. Buying books at the local bookseller may be convenient, but the library may offer your favorite author's books at no cost.

• Avoid late fees and interest. Whether it's a bill from the doctor or an automobile repair shop, get in the habit of paying on time. If you don't routinely pay off credit card balances every month, it may be time to cut up those cards and learn to pay with cash. True, you may not get the latest and greatest electronic gadget or kitchen appliance, but learning to control impulse buying is key to developing financial discipline and long-term wealth.

• Control hunger. Carry snacks and a bottle of water everywhere you go. When hunger strikes, down some trail mix and take a swig from the bottle. You'll be less tempted to turn aside to the drive-through lane at your local fast food restaurant. You may even lose some weight in the bargain. It's also a good idea to eat a meal before you shop for groceries.

• Shop around. Whether you're spending money on insurance premiums, auto maintenance, or building materials, it's wise to check several sources.

Striving to increase your income is a worthy goal. Just remember to take a hard look at the other side of the ledger.

aconner@atconnercpa.com