15 of 39

Write now Article Tools

Living within a budget is nothing more than having your desired spending plan consistent with your actual spending. What goes out cannot be more than what comes in, can it?

Planning: No good plan goes unpunished! First, Track your spending, every penny, for a period of 30 days. Good or bad, it is what it is. During this time, consider how you want your budget to help you meet new financial goals. Next, categorize your spending into a "budget" of your actual spending. Finally, make up a new budget, based on the actual spending pattern, but with adjustments that will help you meet your goals. Probably the best site with budgeting and money management information and tools is www.crown.org. Their tools will help you set up a realistic budget that you can live with.

Sticking to a budget: The great destroyer god will do everything in his power to throw you off your budget and make you feel guilty (and poor) if he can. Here are his tricks:
1. Surprises: As soon as you set up a budget, your car will need a new alternator or the washing machine will conk out. This is his dirtiest trick and is almost guaranteed to work. How can we get on a budget if a huge expense comes out of nowhere? There are solutions to this. If you have been living paycheck to paycheck, there is no room for this at the beginning.

Solution: Think creatively: can you live without your car for a couple weeks until you save up for an alternator? Can you ride a bike or take a bus? What about walking? Can you do the laundry at the Laundromat for a while or better yet, do it at a relatives' or friends' house? Granted, it won't be fun, but can you do it? Surprises will come, you need to be ready. Your new budget must have some money set aside to take care of these life emergencies if it is to be successful. And no, a hankering for Pizza on Friday night is not a life emergency.

2. Gluttony at the store. This can be food, clothes, electrical appliances or whatever lights up your eyes. Your budget will tell you how much you can spend in each category every month. If the money is there, spend with joy. If not, stop in your tracks.

Solution: Envelopes with each category on the front is a very visual way to help you keep track. Look at your spending each day on your computer so you know what you have. Link your bank account to a financial program like Quicken. Refuse to steal money from the food budget to buy that new TV even if it is on sale!

Stop impulse spending by having a list and sticking to it. If you see something special that is not on your list, write it down, but don't buy it. Put it on a list at home of the things you would have bought impulsively. Review the list 3 days later and see if you still want it. See if it fits in your budget. If it does, you can have it. If not, either save up for it or give it up.

3. Your significant other: some of us save, some of us spend. If two of you have to live on this budget, then two of you have to make it work. If one of you is religiously following the budget and the other is having a spending spree, it could be disastrous. A budget is not a weapon for the miser to clobber the spender. Neither is it OK to spend it all in the first week.

Sensitivity and balance as well as honest commitment will keep you going. The rewards of a balanced budget are huge and worth the small amount of pain it takes to get started.

Learn more about this author, Roger Morse.
Click here to send this author comments or questions.

Add your voice

Know something about Cost management: Sticking to a budget?
We want to hear your view. Write now!