Tips For Staying on Budget By Elizabeth Williams At Isnare.com Ezine Articles

If you're finding it tough to make ends meet in this economy, have lost your job or taken a pay cut – it's time to get serious about creating a budget and sticking to it. Everyone is forced to make some tough decisions regarding their finances in order to ride out this economic downturn – here are several tips for staying on budget to help you weather out the storm:

How much money do you need?

First, figure out how much you pay each month in necessary expenses – living expenses, debt repayments, bills. Factor in savings and some money for entertainment. This will tell you how much income you need to cover each month. If you aren't making enough, eliminate more from your expenses (get rid of cable tv, cell phone, use less energy, etc) or make more money. You can't stay on a budget if you don't earn enough to cover your expenses.

Stick to the budget

Once you know what you must pay for each month, and have given yourself a small allowance for entertainment (hey, all work and no play is never good!), stick to it. Don't buy anything that puts you over budget during the month. Write down all purchases and bill payments and keep a close eye on the finances to be sure you're staying the course.

Avoid large purchases or delay them if possible

Before buying anything that is outside the budget but you feel you must have, give yourself a 24 hour cooling off period before buying. Think about the purchase. Determine whether or not you absolutely need it, or could do without it. If after 24 hours you still think you need the purchase, figure out how to pay cash for it by adjusting your budget temporarily to get the money for it. Don't buy with credit or you defeat the purpose of working so hard. Often, you'll find that you don't feel as strongly about the item if you wait 24 hours instead of making an impulse buy. If you rely solely on emotions to make a purchase you stand a higher chance of making the wrong one. Waiting 24 hours gives you time to make practical decisions about the purchase.

It's a family effort

It's not possible for one person of a partnership to create and stick to the budget, it has to be a team effort. Both must be on the same page financially and both must agree to stick to the budget. It's important that everyone has equal rights and say in the financial decisions, but expect some heated discussions if you have differing views on money management! For children and teenagers, you can start teaching them valuable financial lessons by giving them a set allowance and helping them learn how to manage their money. Older teenagers should think about a part time job and begin taking more responsibility for their own care and needs.

Debt repayment

One of the major reasons people should budget and stay within that budget is to pay off existing debts. Think about it – if you didn't have debt repayments your income would go a lot further, wouldn't it? Make paying off debt a priority, especially of those smaller nagging debts that keep hanging around. Once your debts are paid off, you can relax the budget a bit and give yourself more money for entertainment and save more to avoid having to go into debt again in the future.

These tips will help you stay on your budget and weather tough economic storms for long periods of time. Once you make these slight adjustments in your financial habits, you may find you don't mind living frugally!

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