A budget is like a diet, you may hate sticking to it, but its rewarding in the end. Unlike a diet a budget doesnt have to leave you hungry, with the right steps you can improve your finances and still splurge on a few things here and there.
1. Track Your Spending By tracking your spending it really puts in perspective how much money you spend. Monitoring your bills and even cash for a couple weeks is a good start. The old fashion pen and paper works just fine for tracking your money, but there are also plenty of high-tech ways to do it also, you can use an excel spred sheet, or many online sites provide budgeting worksheets. By tracking your money you can realize how much you are spending on things that are not necessary. By doing little things like planning out your meals and buying at discount stores, will surprise you how much you can save.
2. Look For Leaks Start with variable expenses. If your spending too much on eating out at restaurants, cut out one restaurant meal a week, or grab a takeout meal instead, or pack your lunch. Doing little things like this can save you a $100 a month! Some other suggestions would be if you have more than one cell phone plan in your house hold you can consolodate them, or checking with your cable company for any deals or specials. Once you start geting your finaces in line , you can use your savings to start paying off debt starting with the one with the highest interest rate. If you have a credit card with a high interest rate you can shop around to see to see if you can get a lower interest rate. There are several online cedit-card comparison sited such: LowCards.com, BillShirnk, or CreditCards.com.
3. Set Goals Once you have control of where you are leaking money, you can set priorities and savings goals and reroute your cash. The more trgeted your goals, the more likely you are to achieve. Put away money specifically for retirement, college or a house. One thing you should always do when setting up a budget is set aside money for an emergency. Even when the economy is good you need “just in case” money for an unexpected medical expense, furnace failure or fender bender.
4. Be Flexible As you start to follow your budget give yourself some wiggle room. Budgets are meant to be flexible, if you are too strict on yourself you may get frustrated and quit. The good thing is that most people over spend in 2 or 3 areas, once you get even 1 or 2 of those areas in control you will start seeing the savings. If you do chose to make a big purchase, all you have to do is cut back on a few other things that month to keep you on track. Now that you think about it you shouldn’t think of a budget as a diet at all, think of it as exercise, any pain you feel will only make you stronger in the end.