Live on What You Earn: The Art of Personal Finance
By: Phil Rogers

Budget is a word that puts fear into the heart of most of us. It‘s like saying diet. It leaves a bad taste in our mouth like a stock of celery on week two of “The Plan“. However, a budget is simply a plan. We make plans for holidays and birthday parties and many other fun activities. By planning how much to spend and save, we can in the end have more fun. It takes discipline, but the goal, like a shrinking waistline is worth the effort.

If you want to get a better handle on your daily budget, a good place to start is to record everything you spend for one month. There‘s no need to try to adjust your spending habits just yet. Simply write down what you spend for 30 days. At the end of the month, look at where your dollars have gone. Oftentimes, simply looking at how much you spend a month and where is more than enough incentive to embark on a new, more frugal lifestyle. Sort your list into categories of essential buys and nonessential ones. Decide which nonessential purchases you can do without. One word of caution: do not try to cut out all nonessentials at once and think you‘ll be able to live an ascetic lifestyle all of a sudden. Creating an unrealistic budget is setting yourself up for failure. Modify and improve your budget slightly each month, working little by little to achieve your financial goals, whatever they may be. Make sure to include some “fun money“ in your budget each month to spend on a hobby or recreation that you enjoy. Doing this will make it more likely that you stick to your budget. After all, you want to create a set of goals that you can stick to for a lifetime, not ones that will burn you out after a few months and cause you to give up.

In order to establish a baseline budget to use during months two and three, identify which areas you can cut expenses.

1. Break the month down into an average per week expenditure once you find your nonessential expenditures for that month. Take out a bit less cash than you spent over the previous month and use this allotment for your nonessentials for the upcoming month. You can make it a few days without that extra latte if you run out before the week is up, the end is in sight.

2. Track how many days each week you dine out. For the first month, schedule what days you will be eating out. Be sure to choose days that work best for your schedule, and remember that it‘s important to stick to the schedule.

3. Practice shopping the clearance areas first before moving to the discounted sales sections. You should also get into the habit of routinely checking the clearance areas. Put together the outfits you wear using the same approach and buying individual pieces of clothing and then combining them yourself instead of spending the money on a whole outfit.

4. In order to secure better rates and find promotional bonuses for switching companies, take an afternoon off to shop around. Check out and compare prices for telephone, cable/satellite, garbage removal, interest rates and terms of credit card companies, etc.

5. To eliminate additional fees, only withdraw money from your bank‘s ATM machines.

6. In order to save money, make a list before you go shopping and stick to it! This way you will avoid impulse spending. While shopping you can tell yourself that you can come back another time to get the items that are not currently on your list. When you see how much you save by using a list, you probably won‘t want to do that.

By taking a look at where you are right now concerning your financial picture, you can start with small steps and not get overwhelmed. Create a budget to show you where you are spending and allow for a couple wants versus needs to transition yourself to a more mindful and planned money outlay. Plan goals that are easily achieved to boost your confidence and reward of accomplishment. Check your plan regularly and revise it over the months ahead. You will have a designated place for every dollar to go, and you will see you are more and more in control of your spending. You will find more cash is available to you, allowing you more freedom with a life on purpose.

Article Source: http://www.ArticleJoe.com

Phil Rogers is a recovering Debt addict going on 15 years of living debt free. He now spends his spare time paying forward his knowledge to those who need help with www.debt-reduction-solutions.info/“>debt reduction, www.debt-reduction-solutions.info/5-steps-to-eliminate-credit-card-debt/“>set up a personal budget, or otherwise seeking www.debt-reduction-solutions.info/debt-reduction-get-started/“>Debt Reduction Advice

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