1. When I consider spending $1 (or any amount), I ask myself questions like, “Where will I store it?”, “Is this healthy for me to eat?”, “Is it worth the $2 to $4 I’ll have to earn to pay for it?” and/or “Will it make my life better?”

2. Since cars are often people’s second biggest expense, watch that like a hawk. Don’t figure what your fuel cost is, rather remember what the federal government reimbursement rate for mileage is. If you have to drive 10 miles further to save $10, you have just made yourself poorer. How? Well, your round trip is 20 miles and the 2015 federal rate is $.573 for a total of $11.46. So, you have spent an addition $1.46 and if you take that times two or four your have to earn to make that money, the trip cost you an extra $2.92 to $5.84!

When my earnings increase by $1, that dollar will be taxed at some point, either now or later (if put it in a tax-deferred vehicle). Because of taxes, that dollar is in effect worth less than a dollar. However, when I decide to not spend a dollar, I get the full benefit of retaining that dollar. I’m not taxed more just because I choose not to spend it. So, what’s worth more: (a) finding a way to earn an extra dollar or (b) not spending a dollar I already have? Because the answer is (b), I spend less time figuring out how to make an extra buck and more time evaluating my purchases. A penny saved is actually more than a penny earned.