We purchased our first home at the age of 24. So both Rob and I have had a mortgage for a long time and had to start a budget early on. Since purchasing this house, we've had to save even more money so we can place that towards our renovations. We never purchase any new item or start a renovation unless we saved half the purchase price first.
*Cut up the credit card and only use cash. With credit and debit, you don't actually see the money leaving your account so you're more likely to spend more (ie: out of sight out of mind).
*Agree with Katie. Get a specified amount to be withdrawn directly from your paycheque. You can go to your bank to do this.
*Track all your purchases for at least a month. Buy a small journal or start a spreadsheet on the computer and before going to bed note everything you bought from a package of gum to a sweater. Once you have noted where your extra cash is going you can start to budget.
*Once you have a budget, at the beginning of each week, take out the amount you have allocated for each purchase (ie: food, clothes, entertainment, transit money) and place each amount in a jar. Only use this money and once the jar is empty you can't purchase anything until the following week. Again, it gets you away from the 'out of sight, out of mind' principle and forces you to visually see the money leaving. It's tough for some people to go back to using cash, rather than debit, but it works.
*If you need to purchase an expensive item, save up half the purchase price first before buying it. It won't be hard then to pay the other half off and you're ahead of the game. Again, that's hard for people to do because they are in the "NOW" generation. I want it NOW!! But that thinking is only going to place you in debt if you're not careful.
*Start cooking big batches of food at once. On the weekend I'll make at least one stew/soup and one other big batch food (ie: pasta sauce, butter chicken) and then individually freeze these in take out containers. It's easy during the week to just grab your lunch out of the freezer and off to work.
*How much do you use your car in a typical week? Start realizing that gas is expensive and start doing only one trip a week to pick up groceries rather than running out several times a week to pick up odds and ends. It adds up! ***Also, increase your deductable on your car insurance and this will greatly reduce your insurance payments.
*Do you pay for your heat/water/electricity? Visit Home Depot and pick up some energy saving items (ie:programmable thermostat, weather stripping for windows/doors, energy efficient light bulbs). Do you own your own home and rent a water heater. Purchase a water heater and it will save you $$$ in the long run.
*This will test you. Try going one whole month without buying any extras. No clothes, no take out food, no magazines, no cosmetics, etc. This will really show you how much you can save and how much 'extra' spending you are using and literally throwing your money away.
*It really doesn't matter how much money you make right now. What happens if you became sick/disabled? Or if you lost your job? Every paycheque today should be used to ward off any unexpected event in the future. Save as much as you can today since you don't know what tomorrow will bring.
Ok, my fingers are tired from typing. Hope this helps!