Spend less so you can save more

We all know we should set aside money for a rainy day, a house down payment or retirement, but there are always a million reasons why we can't. If this sounds familiar, remember this: To get ahead, you either need to earn more income or spend less – or a little of both.

You could always ask your boss for a raise or take a second job, but here are a few suggestions for tackling the problem from the spending side.

Brew your own. If you spend $3 a day on coffee, that's about $1,000 a year. Instead of going out to get coffee, buy a good coffee maker, a thermos and your own premium coffee beans. The same goes for bottled water: Plastic bottles are bad for the environment and you're usually just paying for filtered tap water. Buy portable water filters for home and work – you'll pay pennies a day versus dollars.

Kick bad habits. Smoking one $5 pack of cigarettes a day costs over $1,825 a year, not to mention potentially thousands in additional medical and lost-work costs. Add $10 a week in lottery tickets and that's another $520 a year. By investing that same money at an 8 percent annual rate of return, you'll have more than $37,000 after 10 years.

Brown bag it. Sometimes going out to lunch is the only way to escape work. But at $7 a pop five times a week, you'll burn through $1,600 a year. Try making an extra portion at dinner and brown-bagging it the next day. Then take a walk with friends during lunch hour – you may even drop a few pounds.

Consolidate your errands; or better yet, walk or ride a bike. Cutting out two gallons of $3 gas a week saves $300 a year. And trade in your gas guzzler for even larger savings.

Go green. By switching to energy-efficient light bulbs and appliances, insulating your house and lowering the thermostat, among other things, you can save big bucks – and save the environment. Go to www.energystar.gov for more information.

Switch to lower-interest and no-annual-fee credit cards. And, before you sign up for a card that offers rebates on purchases, be sure you have the discipline to pay off your bill each month; otherwise you'll negate any savings.

Shop around for no-fee checking accounts. A $5 a month service charge can wipe out any interest you might earn, unless you carry a high balance. And while you're at it, don't settle for a savings account with 1 percent interest or less when many institutions offer 5 percent or more. Compare rates at www.bankrate.com.

Overall, the best thing you can do is make a budget and stick to it. Track exactly what you're spending each month down to the last penny and look for places to trim. Many budgeting tools are available. For example, Money magazine offers Money 101, a step-by-step guide that can help you set your financial goals, at https://money.cnn.com/pf/money-essentials/.

Also check out Practical Money Skills for Life (www.practicalmoneyskills.com/learn/budgeting), a free personal financial management site sponsored by Visa Inc., which features interactive tools to help you track expenses, set up a livable budget, calculate retirement income needs, and more. As always, consult a financial professional regarding your particular situation.

For very little discomfort, these simple tips can save you thousands of dollars a year. That beats working a second job, doesn't it?