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Having a budget
and living within it are two different things. There
are always things that we want (or need) and credit
is so easy to get. This article will discuss ways to
help you establish good budgeting habits.
First, determine why you want to budget. You need a
pretty good reason or you won't feel obligated to do
what it takes. Do you want to get out of and/or stay
out of credit card debt? Or save for a new car or big
vacation? Whatever it is, you need a reason so that
you won't be enticed to overspend. Write down your reason
or goal where you see it every day.
Second, examine your spending. Are you tracking your
expenses often enough? If you aren't looking at your
expenses every few days, you probably have no idea how
much money you have and where it is going. Spend a few
minutes each day or at the end of the week updating
your records instead of saving it all for the end of
the month (or tax season).
Third, recognize why and where you are overspending.
Look at your expenses and see where you've crossed the
line. Did you have a large, unexpected medical, house,
or automotive expense? Does this happen frequently?
Establishing some short-term savings can help cover
these expenses when they occur.
Begin thinking of things in terms of what it costs you
over a long period of time, such as a year. For example,
if you pay $3/week to withdraw money from your ATM,
that's over $150/year. Instead limit withdrawals to
twice a month (or less) and that's over $75/year in
your pocket!
Below are some other ways to reduce both mandatory and
discretionary expenses:
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Increase your
car insurance deductible to $500.
-
Check around
for better car insurance rates.
-
Conserve utilities
when possible.
-
Consolidate
your credit card and other consumer debt into a
home equity loan and then cancel the cards, cut
them up, and don't apply for new ones.
-
If you are
renting, try to buy a house; tax advantages for
paying home loan interest often make it cheaper
to own than to rent.
-
Eat out less;
brown-bag your lunch; find less expensive places
to eat.
-
Find cheaper
entertainment (rent a movie instead of going out
to one).
-
Consolidate
errands to use less gas.
-
Limit grocery
shopping to one day a week; shop at more than one
store for groceries, if time permits.
-
Shop around
for a better long-distance calling plan or cell
phone plan.
-
Borrow books
from the library instead of buying them.
Some find it necessary
to go to a cash-based system. This is sometimes called
the "envelope method." It involves cashing your paycheck
and depositing only what is needed to write checks for
bills or to cover bills that are automatically withdrawn
from your checking account.
The remaining cash is divided into envelopes marked
for expenses such as food, gas, etc. Once the money
in an envelope is gone, to make any additional purchases
you either have to shift money from another envelope
or wait until you get paid. This really helps to develop
discipline.
You may eventually find that there are no more places
to cut and you need to increase your income. This doesn't
necessarily mean getting a second job, although that
is a possibility. Below are some other ways to increase
your spendable money:
First, take a look at your tax return. If you're getting
anything but a small return, you're letting the government
earn interest for itself with your money. You probably
wouldn't let anyone else do that! Consider raising your
exemptions. You can acquire a new W-4 form to fill out
from your Human Resource department or manager.
Second, save or invest wisely to obtain dividends. This
is money that you don't have to work for! It's money
working for you.
Third, acquire new skills that can help you get a promotion,
or even a new job. Get your GED or college diploma,
if you don't have one. There is a lot of financial aid
available, and you may even be able to attend college
for free.
Fourth, consider starting a home-based business. There
are a host of tax deductions for home businesses, not
to mention the extra income that may come from just
a few hours a week. Although a home-based business is
not for everyone, you may enjoy it enough to turn it
into your next career!
Living within your budget is possible, but you must
have a good reason to motivate yourself. Track your
expenses often. Cut expenses and/or increase your income
if you need to. Decide to make changes and do them today.
***************************************************************
© Simple Joe, Inc.
Chemain Evans is a quality control
specialist for Simple Joe, Inc., makers of the popular
Simple Joe's Expense Tracker PC software. Expense Tracker
is a quick and simple way to keep track of your expenses
and stay within your budget. Expense
Tracker is ideal for tracking personal, business, home
and club expenses.. This article may be freely distributed
as long as the copyright, author's information and an
active link (where possible) are included
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