Cutting Your Spending Habits

I'm a working mom of a 1-year-old, with a working husband. We make pretty good money, yet we're living paycheck to paycheck. I admit we both like to spend money on our hobbies and going out to eat. But I want to try to save money so we can eventually move out of our apartment and into a house, plus save for our son's college. How can we get serious on saving money?

Ah yes, that's a very dangerous financial frame of mind. The insidious part of it is that it's too "here and now" focused, leaving little room for building for the future, which as you point out, is what you want to plan for. So, in order to get into an enjoy-now-but-plan-for-future mind-set, it's time to see everything in black and white.

Collect every receipt from every purchase and every bill and ATM withdrawal even, for one month. Sit down at the end of the month and tally everything up into categories. So, how much have you really been spending on going out? Plug your numbers into my budget calculator at OTM.CNBC.com to see what portion of your income is going to "fun" vs. the future. You should be saving at least 10 percent of your income in an emergency savings account and for other pop-up expenses and you should also be saving more for your retirement.

And one more calculation for you: Take half the total of what you're spending on going out and plug your numbers into the savings calculator at Dinkytown.net. If you put away $200 a month for the next 10 years, you've got a years' worth of private college tuition saved up. Not bad! Sometimes, changing your mind can be all about the math.

Read more of Carmen Wong Ulrich's financial advice. GO!