In a tough economic climate such as the one we're living in, there is a lot of advice about how to cut expenses or increase income. Both concepts are good and can improve your financial situation, but combining the two concepts and working together during a specific time period will catapult your results. You'll be amazed at how possible it is to live on less money and actually enjoy it more.



1. Think about shopping in a different way. Instead of mindlessly heading to the grocery store each week, start questioning your purchasing habits. Make a shopping list of necessities, use up what's in your pantry, freezer or cabinets, and shop the sales with coupons to further your savings. You'd be surprised how much you buy each shopping trip that really isn't needed to make your meals. At first it will feel like a major lifestyle change, but after a few weeks it will become habit and you'll have taken great strides for reducing your expenses.

2. Look at your checkbook register carefully. This is a common place that you can see all of your expenses and probably find areas you are overspending, especially if you are a debit card user. It tells so much about who you are and what you do with your money. If you see a number of small purchases with the debit card for coffee and other treats, consider giving yourself a weekly cash allowance and don't dip into the checking account. That will keep you on track and avoid spending money that you aren't even aware of how much it's adding up to at the end of the month.

3. Eliminate anything that isn't a necessity. This takes discipline and a keen eye for what is really legitimate and that which can be trimmed out to help with the budget. Basically, if it isn't a monthly living expense like mortgage or rent, debt repayments or utility or food bills – it's not a necessity. This may seem too strict, but taking a radical approach just might be the thing that forces you to think differently about your lifestyle and how you spend money. Give yourself a 30 day no spending challenge – make sure you've got enough groceries to make it through a month (or set aside a few dollars for dairy products and produce throughout the month) and don't spend anything except for monthly recurring living expenses and your existing debt repayments.

4. Pretend you've lost your job. What would you do if this happened? You would reduce your expenses to the bare minimum right? Pretend you've lost your job, but without the loss of income, you suddenly have more money available. Start an emergency fund in case you really do lose your job with the savings of living more frugally, or pay off credit card debt. Look for balance transfer offers to save on interest and expenses for debt you can't pay off immediately.

5. Increase income creatively. Declutter your house and sell things on ebay or in yard sales. Bring items to consignment shops. Consider a temporary part time job or a way to start another income source online or otherwise.

If you just choose lowering expenses over income generation, the synergy between the two is lost. Doing both will maximize your savings and give you additional money to pay off debt and increase the money you have saved.