Take out the copy of your budget.  Ideally, your budget should balance.  If you have money left at the end of the month, it should be in savings. Your budget should not be in deficit regularly.  That’s the fast route to credit trouble and bankruptcy, spending more than you earn.  (Of course, there will be some months you spend more, but those higher expenditure months should be offset by  frugal months where you save more than usual.)

Given a balanced budget, one way to increase the amount of money available for savings is to reduce your expenses.  In my experience, we really don’t know how much we spend on a day-to-day basis.  Tracking your spending carefully, even for a short period, can help you learn a lot about where your money goes.  For a week (or a month if you are very ambitious), write down EVERYTHING you spend.  Yes, everything, from the doughnut you grab on the way to work to the yoga class to work off the doughnut to the groceries to the water bill to the popcorn at the movies.

For most people, a close examination of your spending will indicate places you can cut in order to increase your savings.  It is likely to be different for everyone, depending on where your money goes.  In the short term, it’s generally difficult to save on the big things, like mortgage or rent or your electricity or gas bill.  Yes, you could move to a smaller place or improve your insulation, but those are probably a little more drastic than you were thinking when you made this resolution.

There are places where the cuts are a bit easier.  Eating out is a big expense for many people.  Cooking dinner at home or carrying your lunch to work can save more money than you think.  Let’s look at an example:  If you spend $5 a day on lunch, that’s $25 a week.  You can buy a loaf of bread and a pound of meat for about $10.  Toss in a bag of baby carrots and you can still save $12 a week. That’s almost $50 a month — a pretty big increase with very little effort.  You’d save even more if you made your lunches from dinner leftovers that might otherwise go to waste. 

Entertainment is another place to cut.  Movies, concerts, evenings at the corner bar, and weekend jaunts could be reduced or even halted for a short time as a way to increase savings.  The same goes for non-essential purchases of clothing, electronics, or the like.

You may also want to take a look at the little expenses that add up over time:  the premium cable channels you watch only on occasion, the cup of designer coffee in the morning or the late afternoon diet soda, the weekly manicure, the magazine picked up at the grocery store checkout because you’re bored.  You don’t need to deprive yourself completely.  You could cut back or alternate what you give up.  For example, instead of buying coffee every day, you could make it your Wednesday treat.  Or you could make the manicure biweekly.  Or you could give up buying coffee this month and going to movies next month. 

You are trying to change habits, so you want any change you make to be something you can live with for more than a week.  We aren’t looking for austerity, just trimming around the edges.