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personal finance tips

A cat wears designer attire during Pets Fashion Week Russia in Moscow.

When it comes to spending, even the experts are not always smart.

Take Lesley Scorgie, the 26-year-old author of Rich By 40, who once took a stock tip from her hairdresser and bought into the tech company Wi-LAN Inc. during the dot-com boom. She ended up losing her money and looking for a new stylist. "That was really dumb."

How did we get this way and what can we do about it? Share your story and advice with Globe readers.

These days, Ms. Scorgie is more savvy about how she spends her money. "I've got my nice shoes and bags and things like that, but I choose to be smart about how I go about acquiring those things. … Shopping with a discount in mind is really what I do."

For those still struggling with overspending, Ms. Scorgie offers these tips:

1 Get ruthless. Set your priorities straight and be ruthless about sticking to them. If retirement savings are more important than seeing a movie once a week, stop seeing movies once a week and plow that money into your RRSP instead. Ask yourself whether you really need the item in question, or if you just want it. Then wait a few weeks before buying. You might reconsider.

2 Get active. If you're used to driving, try taking public transit, carpool, walk, run, bike or inline skate instead. Entertain yourself by getting active. Go running, biking, walking, skating or hiking; do yoga outside; play football or baseball; walk the dog; play with your kids; or create some romance with your partner.

3 Get healthy about your food habits. If you smoke or drink, stop. Cook at home rather than eating at a restaurant and buy food in bulk, especially if you've got a family. Buying locally grown food and shopping at a farmers market can be cheaper.

Globe videos on debt and how to deal with it:

  • Debt: How fast are we sinking?
  • How to get out of the debt trap
  • Common mistake: Too much real estate debt
  • Control that impulse to buy, buy, buy
  • Managing student debt: How to do it best
  • Hitting the wall with credit troubles?
  • Got a debt headache? You're not alone

4 Get cheap entertainment. Borrow books, CDs, magazines and DVDs from your local public library. Sign your kids up for free programs sponsored by your municipality and school board. Rather than going out with friends, have a coffee, go for a walk, test out a recipe at home, watch old flicks, play board games or spend more time chatting. If you like to travel, stay closer to home. Drive to a destination rather than flying. Look for travel specials and take advantage of travel rewards programs.

5 Get negotiating. Always ask for a discount and don't buy things that aren't on sale. Negotiate cell phone, cable and Internet plans. Most importantly, call your bank or financial institution and negotiate the interest rates on all loans and credit cards. A 10-minute phone call can result in hundreds or thousands of dollars in interest savings each year.

6 Get a bargain. Buy used through local websites, eBay, Craigslist, garage sales, estate sales and auctions. Check out vintage stores for cool clothes, jewellery and accessories. Wherever you shop, check to see if they have a free rewards program. Investigate whether you'll receive a rebate or tax credit for your purchase. For example, if you're going to renovate your home, retrofit with energy-efficient hot water tanks, windows, doors and faucets. Check to see if you have coverage or subsidies through your employer or the government for things such as child care, fitness expenses, health and dental expenses. (A side note about bargains: A good deal that you can't afford is never a good deal.)

7 Get the minimum. Pare down your purchases. Get the iPod Shuffle instead of the iPod Nano (or the car without the sunroof). Examine all your expenses to see if you can shave off any of the extra bells and whistles (you probably don't need 300 cable channels or the top-of-the-line dishwasher).

More Globe stories on debt:

  • Debt: Get out and stay out
  • How to avoid filing for bankruptcy
  • Canadians unprepared for the Takeaway Decade
  • Tax tips: Pay down mortgage or make RRSP contribution?
  • Family finances: Flying solo or with a co-pilot?
  • Many homeowners should have rented
  • Debt will bite consumers: report
  • A plan to cope with a debt cloud
  • Spring clean your finances
  • Improve your money skills

8 Get environmentally friendly. Save on utility bills by washing laundry in cold water, turn the temperature down a few degrees in your house, turn the lights out, and properly seal your doors and windows. Reuse and recycle old plastic bags and containers.

9 Get smart about maintenance. Do your own maintenance. Many people pay others to do things they could do themselves: housecleaning, yard work, home maintenance, car maintenance, washing, ironing. You could even start your own small business doing things others don't want to do.

10 Get rid of excess credit. Cut up all but one or two credit cards. No one needs more than that - ever. The more cards you have, the more they occupy your available credit. Keep the one with the longest history, lowest or no annual fee, best customer service and lowest interest rate. Some cards automatically give you an annual credit limit increase. But instruct your credit card company to keep the limit at a level you can afford. If you struggle with credit card temptation, get the cards out of your sight! Cut them up, bury them in the backyard (I'm not joking), stick them in a sealable bag, fill the bag with water, and put the whole package in the freezer. By the time your cards have thawed, you'll have had a chance to think twice about making that "must have" purchase - and don't bother trying to hammer the ice; that will just wreck the cards.