Published 12:00 am Friday, September 19, 2008

One of the first steps toward saving money is to figure out exactly where you’re spending it. For several weeks, track every item you buy, no matter how insignificant. Often, it’s the little things you can cut back on and save big money in the long run.

For example, if you buy two $1.50 drinks from a vending machine at work each day, you’re spending $60 per month or $720 per year. Seemingly small purchases can end up costing big money when they are added up.

Here are more ideas for saving money and generating more money.

Start with the basics. After you’ve kept track of daily expenses for a while, you can slash unnecessary things. Next, look at your bills. You can’t cut out your mortgage, rent, electricity or gas. But you probably receive monthly bills for things that you can eliminate or at least downsize.

Instead of cutting out your favorite things, compromise and find ways to do what you want while saving money. You might keep your cable TV package but downsize it from the all-inclusive to the basic package that includes your favorite channels.

Walk it off. A good way to compromise and save money is to cut out your health club membership. Exercising at home with a DVD or just going for daily walks around the lake or neighborhood can save hundreds of dollars each year. Better yet, it’s a way to meet your neighbors and spend more time with your family.

Be gasoline greedy. Carpool to work and consolidate your traveling for errands. If you need to go across town for something, try to take care of three or four other things while you’re out.

Pay with cash. For a lot of people, cash feels more like real money than a debit card. If you have to whip out $100 in cash, it feels a lot different than putting $100 on your debit card. It might be a deterrent to spending so much money if you have to use your cash.

Pay your bills by priority. If you are in a tight financial situation and must choose between paying your mortgage or getting pesky collectors to stop calling, pay the mortgage.

Take your lunch to work. You may spend $5 each workday on lunch ($1,300 per year). Reduce that to $2 per day by taking leftovers or an inexpensive frozen dinner from home ($520 per year); you would save $780 per year.

Entertain on the cheap. Activities such as bowling or movies may not seem expensive, but add the cost of popcorn and soda, or rented shoes and a pitcher of beer, and you’ve spent $15 to $20 or more.

Try new things. The temptation to spend money shopping is often too great for even the most disciplined budgeter. Instead, get adventurous.

Maybe you’ll love kayaking or disc golf or rock climbing. If you don’t get out and try it, you’ll never know.

Trick yourself. With a big expense coming up, such as back-to-school shopping or a birthday, buy a prepaid debit card to make sure you don’t overspend and you have the money you need. If you plan to spend $150 on your child’s school clothes and not a penny more, start buying $50 debit cards each month three months before you plan to shop. Then only use those cards to buy the clothes.

Use generic and fresh ingredients. Cooking at home saves tons of money, and you can save even more by buying store brands. They usually are just as good as their more expensive counterparts and often cost half as much.

Shop smart. Shop at consignment stores and look for great deals on clothes and household items at thrift stores and garage sales.