In today’s economy, it’s more important than ever to live within your means. Setting up a budget is just the first step. Actually sticking to your budget is another thing entirely. We are a nation of consumers, and most of us are natural-born spenders. If this sounds like you, don’t throw in the towel yet. We’ve gathered together a host of budgeting tips from financial experts to help you follow a budget.
Chart your spending
Use graphics and spreadsheets to give yourself a visual look at your finances and spending habits. Set up your budget as a spreadsheet, too, and look at it periodically to see how your actual spending compares to your budgeted expenses.
Put yourself on a spending freeze
Try to abstain from spending any money for one day. If you find this ridiculously easy, try not to spend any money for a week. Just like when you turn off the TV, or your Internet is down, you will find creative solutions to your problems. You will get a more realistic look at what you’re actually purchasing. Often, spending less is simply a matter of breaking bad habits and building new ones.
Cut down on impulse purchases
If you do a spending freeze, you’ll probably be amazed at the amount of money you spend impulsively. If you really think you need to make a purchase, especially if it’s a major purchase, see if you can wait a few days and re-evaluate. Perhaps you will decide you don’t need the latest greatest new product after all.
Distinguish between wants and needs
Write a list, or create a spreadsheet of the bare minimum you need to live for a month. Then, begin adding some of your wants until you reach your budgeted amount. This exercise will probably help you establish your priorities.
Save money on your needs
Saving money on groceries does not mean that you need to spend every waking hour clipping coupons. It’s often as easy as signing up for a smart shopper or a rewards club. Planning out your meals and keeping an eye on the store ads are also both money-saving strategies.
You can also save money by comparing prices for items like phone service, cell phone service, cable TV and Internet. You may be able to shave quite a bit off your monthly budget. In addition, some experts recommend negotiating your medical bills. Often, hospitals and other medical billers will cut a portion of your bill in exchange for an upfront payment.
Save money on your wants
If you’ve listed your wants versus your needs, chances are you have a few items that are so essential to your lifestyle they may as well be needs. However, no matter how you spin it, the dirty truth is that they’re wants. That cup of coffee from the local coffee shop every weekday, for instance, is probably something you can live without. Time is money, but convenience items really add up. Take a hard look at your lifestyle, and be honest about what you can and can’t cut. Can you run outdoors instead of going to the gym? Can you pack your own lunch instead of going to the corner deli?
Take baby steps
If you think you can’t slash your daily trip to the deli out of your budget entirely, try taking baby steps. Every Wednesday, make your own bagel with cream cheese instead of purchasing it, and before you know it, you’ll want that extra money in your pocket every day of the week.
Scrutinize your bills
Make it a habit to examine your bills, even those that are being automatically paid each month. In addition, you should look at your credit score and related information at least once every six months, so you can identify any issues.