Understand where, when and how you're spending your money. By Janet Bodnar, Editor-at-Large April 6, 2011 Americans seem to be experiencing a classic case of coulda, shoulda, woulda. If, they say, we had known before the recession what we know now, we could have managed our money more responsibly, and we would be in better financial shape. In a recent survey by TD Ameritrade, 71% of those interviewed said they would have spent less and saved more, and 65% said they would have lived within their means. How can we all do better in the future? Smart money-management is often a matter of mind over money, and small steps yield big results. To nudge everyone in the right direction, I recently wrote about my top ten savings tips. Now, to mark National Financial Literacy Month, I’d like to close the loop with my top ten budgeting tips. We’ve written about a lot of these strategies at Kiplinger, and they’re my favorites because they’re easy -- and they work. --Keep your budget and your goals simple. What is the one thing that you most want to accomplish? See where your money is going? Pay off credit card debt? Find spare cash to start a college fund for the kids? Zeroing in on your main objective will help you stay on course. --Know your plastic personality. Do you prefer using a debit card or a credit card? Each has its advantages (and disadvantages), and there’s no right or wrong answer for everyone, as long as you know which suits your spending habits. Advertisement --Don’t discount cash. Along with debit cards, hard currency has gained fans post-recession because it literally helps you stay in touch with your spending -- when it’s gone, it’s gone. In fact, studies show that when no physical currency changes hands, consumers are likely to spend more and have less sense of buyer’s remorse. --Limit your trips to the ATM. To make sure you don’t lose track of all that cash, make just one ATM withdrawal per week, and make your money last till the next time. Another trick: Pay with the small bills first; it’s painful to break the big ones. --Track your spending. It doesn’t have to be time-consuming, and you don’t have to do it indefinitely. Tracking it even for a month or two should be enlightening. Use your debit and credit card statements as guides, and toss cash receipts into a container in your kitchen or office. --Pinpoint the one area where you’re leaking cash. Maybe it’s restaurant meals, the computer store or, as in the case of a friend of mine, something as mundane as dry-cleaning bills. My friend habitually neglected to hang up her suits after work, so she was racking up a big tab sending them to the cleaners to have them pressed. Advertisement --Use any budgeting tool that works for you. It could be one of the top budgeting Web sites, such as Mint.com, an Excel spreadsheet, or even paper and pencil. And don’t dismiss that old standby, the envelope system: Divvy up your cash, and put the amount for each expense into a separate envelope. --Give yourself a grace period to pay your bills. This trick comes courtesy of the father of one of my co-workers, who makes it a habit to pay his bills ten days in advance of when they’re actually due. He’s always on time, and never incurs a late fee. --Don’t shop alone. If you lack self-discipline, go with a list, a plan, a buddy -- anything that will make it tougher for you to spend impulsively. And leave the credit or debit card at home, or carry a limited amount of cash. I once interviewed a self-employed young woman who carried an American Express card that she paid off every month and left her other credit cards with her accountants. “If I want to use one, they ask me if I really want to spend the money. That makes me stop and think.” --Be positive. Don’t think of a budget as a straitjacket that limits your spending and takes the joy out of life. Think of it as a way to control small expenses now so that you can buy bigger stuff -- and have more fun -- in the future. Allow yourself a little splurge. If you decide to brown-bag your lunch at work, treat yourself to a fast-food Friday.