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A spending diet will keep those finances in shape

As the warm weather approaches, many people think about kicking off another diet. But getting your finances in shape can reap far more rewards than fitting into a swimsuit.

Call it a spending diet, which entails reeling in expenditures on any nonessential items, and can kick-start better budgeting and debt relief, experts say. While the word "diet" is more often associated with flavorless celery sticks, simple lifestyle changes can help you save thousands of dollars over the course of a year.

These days, families have less slack in their budgets than before, according to recent research by The Pew Charitable Trusts. Household spending has risen 25 percent or more in the past two decades, even adjusting for inflation, yet incomes have not kept pace, the study said.

In addition, previous Pew research found that one in three American families have no savings.

"This time of year is great for trimming your expenses," said Rod Griffin, the director of public education for Experian. "Getting ready for vacation season could be a great time for a short-term financial diet to reduce those debts and be in good shape by the summer."

A realistic goal, like a vacation, is a great place to start, said Joe Eppy, president of financial firm The Eppy Group. "Set goals you are going to hit, because you can always increase them later."

Just like you would with a fitness tracker, use an app like Mint or Credit Karma, to keep tabs on your spending and find where some expenses can be cut.

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"Examine your budget closely to determine exactly where you are spending your money and where each dollar goes," he said. "Understanding how you spend will help you understand where improvements must be made."

Then, "look at what you need versus what you want," Griffin said. "In order for a spending diet to work, you have to be honest with yourself."

Identify any items that you don't really need, such as your morning gourmet coffee, or going out to lunch, and cut those items out during your spending diet, he said.

"Redirecting $10 a day towards saving is $300 a month," said David Bach, author of "The Automatic Millionaire."

(It's worth noting that investing $300 a month at 4 percent interest would amount to $110,000 in savings in 20 years.) "That amount of money in a retirement account is more than the average American saves," he said. "It can change your whole life, financially."

Next, look at your fixed expenses and determine how they can be cut or eliminated. Often, that's where the greatest opportunities are.

Monthly recurring expenditures like gym memberships, cable and mobile phone bills are a great place to start.

"Review your plans and make sure they really fit your needs," Griffin said. No one says you have to forgo Netflix, but do you really need the movie channels or unlimited texting? Scaling down to basic cable from premium could save $50 a month, or $600 a year, Bach said.

Also, check your home or renters insurance rate, mortgage and auto loan. While interest rates are low, there may be opportunities to refinance and cut those monthly expenses across the board.

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While you are at it, consider bundling those policies together. If you buy more than one policy from the same insurer, you could get a break of 5 percent or more, according to Jeanne Salvatore, spokeswoman for the Insurance Information Institute.

"The reality is that we are all in the same boat regarding cash flow," Eppy said. Every dollar that comes in goes to taxes, bills and then savings. "We are trained to spend, but we have to reprogram ourselves," he said. And just in time for summer.