by Melissa Nykorchuk

Created on: August 13, 2010   Last Updated: December 03, 2011

The first  step to sticking to a monthly budget is to sit down and realistically write down all monthly expenses and income.  Once you realize what money you have coming in every month where your money is going you will be able to make better decisions as to how your spend your money.

Create realistic goals every month.

If you are an avid spender, cutting up all of your credit cards and trying to stop shopping completely may be the equivalent of a dieter drinking nothing but water for a week and wondering why they are starving.  Wean yourself off of credit card use first and try to find ways that you can save money while still doing things that you love. 

When you  have all of your receipts in front of you, you need to enter in the amounts that you are spending on each of the different categories of items; for example, petrol, groceries, etcetera.  Don’t leave anything out, because you really need an accurate picture of your spending habits in order to understand them.

Think about what you need vs. what you want.

Identify your daily, weekly and monthly needs first and your wants second.  A new pair of shoes is not a need, but something you may want.  Make sure all of your utilities, rent and food bills are paid first before deciding if you can purchase items that you want.  The only way to control your spending is to know how much you spend and where it is disappearing.  Once you understand these basic facts about your finance situation, you can more easily look at where you might be able to save some extra dollars. 

Decide where you can cut costs.

Are you buying lunch every day at work instead of packing one?  Do you order out instead of cooking a decent meal?  Although we all love some basic luxuries, if you are trying to stick to a budget you should think of ordering out or buying your lunch at work as luxuries you may only be able to afford once in awhile.  Although most of us love our daily stop to get a hot coffee, a coffee made at home is pennies compared to a few dollars at a store.  Little things add up.

Understand that it is not forever, but a good decision for your future.

Many people trying to follow a budget feel cramped and eventually crack under the pressure to buy things they don't necessarily need.  When we feel forced to do something, most of us are resistant to change.  Instead of looking at a budget as a bad thing, consider that following a budget will give you more security in your future.  Remind yourself often that when you are following a budget you are investing in your own future.

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