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Let's face it. We all love spending, and regardless of what our income is we will always tend to overspend. The difficulty many people face however is that this overspending becomes habitual and when that happens - debt is inevitable!

So how do you get your spending under control?

First of all you need to set yourself a budget.

This isn't as hard as you might think. There are only 2 columns in most families budget: income and outgoings. Income is usually easily calculated as for most of us this figure arrives on the paycheck at the end of the month. Outgoings can be a little less easy to work out.

To work out your ougoings first of all you need to identify your essential bills. Most of these bills come out regularly every month and write these in a list. Usually this list includes things like the mortgage, utility bills, water rates, insurance, and any other standing orders or regular payments you are making.

After that you need to work out an average of your monthly spending on groceries and petrol. If you can't work this out with your bank and credit card statements then keep a note of what you spend every week for a month and use that figure.

When you have a complete list of outgoings add on another 10% for those on off expenses such as car tax, or garage fees, washing machine repairs etc. and then subtract the outgoing column total from the income and this should (hopefully) give you a positive balance of what could be termed "petty cash".

More often than not it is overspending in this petty cash that causes us to fail with budgetting.

Unfortunately there is NO QUICK FIX when it comes to petty cash. In the "good old days" when cash was cash, i.e. notes and coins in the hand each month, budgeting was far simpler. When the cash pot ran out - there was simply nothing left.

Nowadays with credit cards, overdrafts and the good old chip and pin cards, we never see the pot running dry. There is always a little something in there to cover our expenses, even if it has a minus figure at the start of it when the bank statement comes in.

So how DO you stick to a budget?

Follow these golden rules:

1) Hide your credit cards.
Cutting them up may be a little drastic, but removing them from your wallet will certainly save temptation.

2) Try taking your weekly allowance out of the bank in hard currency.
It feels like you are parting with something if you have to pay for it in real money! As you get better at curtailing your spending, you can go back to plastic.

3) When the money pot runs dry - DON'T spend any more.
This may mean you'll have to start saying NO when people ring up to invite you to the cinema - but ask yourself: would you rather end up credit blacklisted? Overspending CAN lead to that at its worst.

4) Before you spend any money ask yourself: do I REALLY need this? If the answer is NO, then DON'T buy it!

5) If the answer is yes, then ask yourself: do I need this NOW?
If the answer is NO, then again DON'T buy it - but why not write it down on a list for your birthday / Christmas? - People always ask you what you want nearer the time - so why not be prepared to give an answer!

Following these five tips will help you learn the value of money and how to budget on a week to week basis.

Always keep in mind: many self-made millionaires started off as good budgeters - and the continued habit lead them to where they are today! The same can be true for you.

Learn more about this author, Joanne Smedley.
Click here to send this author comments or questions.

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