Hello! I'm excited for this fall, as I'm applying to teach a class on financial literacy at a nearby community center, so I'm starting a blog series to document what I learn.
The idea to teach a class on financial literacy came from two different sources of inspiration: one, I spend a lot of time on the personal finance subreddit, so I've absorbed a lot of information and advice about financial literacy over the course of this year; two, I came up with a method for saving money that's reduced my spending by one-third over the one month I've used it.
Finally, I just like helping people, so I feel like teaching this class will give me a sense of purpose.
So! Getting down to business. I'll detail my method for reducing spending:
1) Open a prepaid card.
I personally use Chase Liquid, but only because I used to be a Chase employee, so the fees on the card are waived for me. Even if you're not in the same situation, using a prepaid card is worth the fee (usually only like $5 a month, which you'll recoup and then some). A prepaid card is also preferred over carrying cash, since you can cancel the card if you lose it or if something worse happens.
The reason for using a prepaid card is that it forces self-control because you only have a set amount on it at one time. Once that amount is used up, you have to wait until the next payday for it to be replenished.
2) Hide your credit cards.
No, really. I put my credit cards in a safe place, far away from my wallet, so I was forced to use my prepaid card. If things got really bad, I could always fall back on my debit card (checking account), but I'd only keep ~$200 in there at a time, so I was still constrained.
3) Set a budget for discretionary spending.
My personal limit is $350, and it's distributed across multiple categories, from eating out to shopping. But you should choose one that works for you, and is realistic. I went over my budget by about $200 in the month I've had it, but it could have been worse. Before then, I overspent what I earned nearly every month.
4) Distribute the discretionary budget across paychecks.
How I do it is like so: for this month (August 2018), I'm paid on the 10th and the 24th (biweekly paychecks). So I have three different amounts of money ("allowances") that I'll give myself this month -- one for the August 1 through 10, another for the 11th through the 24th, and a final one from the 24th to the 31st.
I know this may be hard to visualize, so here's my example for this month, in purely mathematical terms:
Budget for August 1 - 10 (payday):
10 (# of days I'm budgeting for) ÷ 31 (number of days in August) = 0.32
0.32 x $350 (total discretionary money budgeted for each month) = $112.00
Hence, $112.00 is the amount I have for August 1 - 10.
Budget for August 11 - 24 (payday):
14 (# of days I'm budgeting for) ÷ 31 (number of days in August) = 0.45
0.45 x $350 (total discretionary money budgeted for each month) = $157.50
$157.50 is the amount I have for August 11 - 24.
Budget for August 25 - 31 (end-of-month):
7 (# of days I'm budgeting for) ÷ 31 (number of days in August) = 0.23
0.23 x $350 (total discretionary money budgeted for each month) = $80.50
$80.50 is the amount I have for August 25 - 31.
$112.00 + $157.50 + $80.50 = $350.00
5) Use an online budgeting tool.
I prefer Mint, which automatically pulls in your transactions and sorts them into categories, but you can also use other tools, like You Need a Budget (YNAB), which is similar to Mint, or even a spreadsheet that you manually update.
That's it! One final note -- what kept me from trying this method for so long is that I thought I would be abandoning money made from credit card points. In fact, as long as you don't have credit card debt, it might make sense to put all recurring expenses (e.g., bills) on your credit cards. That way you have the best of both worlds.
Now go forth and save!