Lower Your Expenses and Save Money

When I was working as an investment banking consultant, my wife and I did not think twice about buying what we wanted for ourselves and our children, dining at expensive restaurants or taking taxis.

We were far from living extravagantly: we lived in a small but luxurious rental on the border of the Upper East Side and Spanish Harlem. Still, we were living the good life. There was a rooftop sun deck, health club and pool in our full-service apartment building.

My biggest mistake after losing my job in late 2007 was failing to lower my expenses quickly enough. I had expected to get a job within a few months. So we did not really start making changes until some months had passed, when it started to sink in how much we were spending and how quickly we were spending it.

We started going to more reasonably priced restaurants on our Saturday night dates and riding the subway instead of hailing a cab. We even shared one main course. It wasn't much of a cutback, but it was a start.

Reduce Living Expenses Immediately - Don't Wait

In retrospect, we should have made more drastic cuts much sooner - as soon as I had lost my job.

If I had to give only one piece of financial advice based on my job-hunting experience, I would say, don't wait to lower your expenses. Do it as soon as you possibly can. Instead of waiting until I was forced to make tough decisions, I wish I had made them on my own several months earlier. When you lose your job, you've got to cut expenses, preserve cash and minimize debts.

Cut back both major expenses and minor ones. You might want to celebrate every day, but try celebrating by saving money instead of spending money.

Even while employed, just because you're making a lot of money, does not mean you have to spend a lot. Invest in savings! Property values, investments and salaries do not always go up. When they go down, you will be thankful to have some cash.

When it comes to spending, learn how to say "No!" Learn how to cut back, even when it does not seem necessary. It is necessary.

Avoid Debt

One way to help manage expenses is to create a budget. Every business does it, and every family should too. Write down your income and expenses. Then at least you can start to think about your finances in a rational manner. You can see where the money is coming from and where it is going, recognize your limits and make spending decisions based on consciously chosen priorities. It might sound easy, but it is not. It's sometimes hard to identify or admit where the money is going. Altering spending habits can be even harder.

Lowering expenses and saving money means using credit as wisely as possible. Avoid it altogether if you can. If you have credit card debt, pay it off as soon as possible. Time and interest are relentless. As difficult as it may seem, we should all strive to live within our means and not borrow money. Don't confuse your credit card limit with your budget limit!

Be creative about generating income when unemployed. Offer your services on a contract basis. Offer to consult. We can no longer depend on a single source of income, so figure out how to develop various sources of income.

One of the most important things in life is to learn. And one of the most positive things that came out of my experience of unemployment is I learned much about what to do and what not to do with regard to personal finances.

Joshua Persky is a New York-based career management author, blogger and lecturer whose professional background is in corporate finance and valuation. Last year he gained worldwide media attention for handing out his resume to strangers on the street while wearing a homemade sandwich board that read: "Experienced MIT Grad for Hire."