by Bruce Campbell

Created on: March 01, 2010   Last Updated: March 02, 2010

The Golden Rule when setting a budget has ALWAYS been, and ALWAYS will be: Always Pay Cash. You must think of credit cards as evil and not an option to purchase things. Always, always ask yourself "Can I pay cash for this item?" 

If the answer is "yes" then you ask yourself a second question: "Do I really need this?" You have got to get brutally honest with yourself. Are the 20 pairs of shoes at home enough, do you really, really need another pair? Get away from the impulse buying of things just because they are on sale. A pair of jeans that are 50% off are still not a bargain if they are not needed.

If the answer to the Golden Rule question is "no" then you STOP. Again, credit cards are NOT an option. If you buy fabulous clothes because they are such bargains, put them on a credit card and then don't pay the balance off immediately, you end up paying way more than full price and the clothes won't be such a bargain anymore. 

AGAIN, when setting a personal budget is: NO CREDIT CARDS. Forget them, they don't even exist. Live like they did only a hundred years ago, with cash. By the way, they didn't have credit cards even sixty years ago. Credit cards are a fairly new product and they have really screwed up a lot of lives. Stay away from them. 

If you are in the market for an item that you could buy second-hand, the internet has made it extremely convenient to shop for bargains. Sites such as Ebay and Craigslist are easy to navigate and full of various items for sale. In this respect, they are essentially on-line flea markets. 

If you simply MUST have the item from the department store, you might inquire about their lay-a-way plan that allows you to have the store hold the item and you can pay it off over a period of time. In the current distressed economy, these plans are popular once again. 

One more powerful way to set a budget? Look for coupons in the papers and on-line for your weekly grocery run. The secret to coupons is to not just buy stuff because you found a great coupon. A fantastic coupon for a couple of bucks off a bottle of metamucil is not fantastic if you do not actually use metamucil. It is an easy trap to get into buying things because the coupon seems too good to pass up. Again, don't buy it if you don't use it. On the other hand, if you eat a lot of yogurt and find a coupon that saves you money, by all means use it and stock up on the yogurt. Again, it's all about being honest with yourself. 

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