Posted by Mike Smith :: June 9, 2008 @ 9:08 am

In my post about wealth coming from cash flow as opposed to income, I mentioned an article showing that Britney Spears was living beyond her means. A new report shows that she has been tracking her finances and has dramatically curtailed spending.

Following Britney’s lead is something I would hardly ever suggest. But since I previously wrote about her bad habits, I thought it only fair to cover the latest update about her recent improvements. First, the article says that she tracks her spending religiously. That is something that we should all try to do. Tracking is the first step, reducing comes next. Sources cited in the article claim that Britney has reduced her spending by an incredible 80%.

The article concludes by giving 5 categories used by Britney that we may be able to use as well:

Slash transportation costs

With high gas prices, consolidating trips, choosing not to travel, and looking for more efficient transportation can save a bundle.

Cut your housing costs

Living in the least expensive house that meets your needs versus the most expensive house you can afford is the way to go. Taking in rental income can also offset higher costs.

Slash discretionary spending

Discretionary spending is, by definition, unnecessary. Borrowing money to pay for such purchases makes them even more costly. When money is tight, this is the first area to cut.

Get Free babysitting

Childcare can be enormously expensive. To save money, try having a family member watch your children, or trade off days with other parents.

Turn your trash into treasure

Selling your stuff on eBay or Amazon is a great way to make some secondary income.

The more out of control your spending is, the easier it is to make cuts. Getting rid of the "low hanging fruit" as a first step takes a lot less effort than cutting the last dollar. Once you’re really budget-conscious, it becomes more and more difficult to cut even more, simply because you’re already quite efficient. Since your spending habits were probably nowhere near as bad as Britney’s, you probably can’t hope to reduce your expenses by the same 80% she claims to have done. But looking at the ways she tracks her spending and the cuts she made may inspire you to do some trimming of your own.