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Learn to Reduce Spending. Developing your budget will help you spot areas where you're spending more than you realized. But the next step is more difficult: cutting your spending on unnecessary items. This will require some soul_searching on items both large and small. For example, do you really need a ŭ coffee every morning? (Some will say yes, while for others the answer is no.) Could you make do with a smaller, older car? Instead of an expensive vacation this summer, could you try a "stay_cation," where you stay home (much cheaper) and relax there? All these choices are very personal and many factors come into play, so there's no right answer for most of them. But laying them out will help you prioritize your spending, and that will help you spot places where you can save money.

Of course, now you must differentiate between which expenses are "needs" and which are "wants." Basically, any payment that you can forgo with only minor inconveniences such as your cable bill or back_to_school clothing is a want. Any payment that would severely impact your quality of life, such as electricity and prescription medicines, is a need.

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