10 tips to living on a budget

Exercise patience with yourself if there are times you go over budget.

Prioritize your life. Create a budget.
Prioritize your life. Create a budget.
Foto: Stock.xchng

In these hard economic times, many people are learning to live within their means. Here are ten tips to living on a budget that will help you enjoy more of the things you like by cutting wasteful spending.

Prioritize your life

You need to decide on the things that matter in your life if you are going to live on a budget. First, make a list of the things that are important to you as a family. Then, learn to balance the cost of items for your comfort with the necessary expenses in your available income.

Set financial goals

When you set goals, it protects your family’s future. For example, you can save money for your child’s college fund and for your retirement. So, set realistic goals for spending and saving.Find the amount of the budget that you can afford to save, and make sure you put away money every month.

Create a budget

It is important that you begin to track what you spend each month. Make a list of expenses, and then compare them with your monthly income. You can use easy budgeting tools available online, such as Kiplinger’s Budget Worksheet. When you keep track of what you spend, you become more conscious of how much you are spending, and this helps you control your finances.

Share responsibilities

Aim to involve all the members of your family in your budgeting activities. If every member of the family cuts back, even a little, this could make a big difference. For example, involve your spouse in planning how you will spend the money. Then, both of you check each week to see how well the plan is working.

Get out of debt

Living on a budget means getting out of debt.You need to set realistic goals to manage your debt. Begin by planning how to manage your debt in your budget. Pay off credit card debt and get rid of overall debt. Use cash instead of credit cards, adopt a pay as-you-buy lifestyle, and decrease your debt. If you are diligent and disciplined, you can get out of debt.

Get rid of extra expenses

You need to become aware of what you spend on extraneous things, which can add up to a lot each month. Trim extra expenses, such as changing your television package to a cheaper one. You can also save money on food by taking advantage of specials and finding ideas for inexpensive nutritious meals.

Earn extra money

If you can earn extra money, this could help you live on a budget without giving up some of the activities you enjoy. There are many ways to earn extra money, such as writing blogs online or selling household items.

Prepare for financial emergencies

You will need to set aside a part of your paycheck to set up an emergency fund. This is to build savings for unexpected expenses. You should set a goal to save three months’ worth of expenses in this account.

Sell things you don’t need

Search for items in your house you don’t need. When you have taken an inventory of what you have, you might be surprised at the cost of the things you are not using. Sell them at a flea market or yard sale and raise money.

Be flexible

Life is uncertain and things happen that you can’t control. So exercise patience with yourself if there are times you go over budget. Instead of blaming yourself, get back on track, and move forward with the same determination with which you started.

Photo source: stock.xchng