How to Budget During a Recession

Revisiting the family or personal budget during a recession is a great idea. During difficult times, it often becomes necessary to reign in impulse and unnecessary purchases. Having a solid bank account balance to rely on is key to making payments on time and keeping stress in check.

Difficulty:

Moderate

Instructions

Things You'll Need

• Receipts
• Coupons

1. Read over all of your bank statements from the previous three months. This process can better educate you in problem spending areas or areas that might offer cost cutting ideas.

2. Review all your receipts from the previous six months. Review them for expenses you can reduce. For example, cut back on the number of meals you eat out or shorten or even eliminate frequent or costly driving trips.

3. Identify the bills that you need to pay and what order of importance they carry. Electricity, water and mortgage or rent are three critical-need payments. Also make car payments and insurance payments as soon as possible.

4. Scout for store and grocery coupons in local newspapers and flyers. Coupons save a great deal of money when you use them properly. Read the coupons first and then plan a weekly grocery list according to the coupons.

5. Look for great deals at local thrift stores and flea markets. Designer brand items can be found at reduced prices and save the budget a large amount of money.

6. Trim your budget by scaling back the cable subscription to basic or canceling a few memberships during hard times. Raising insurance deductibles can reduce your monthly premium as well.

Tips & Warnings

• Use financial software to better track expenses and learn where to cut corners.

• Carry a notebook at all times to write down expenses as they happen. Review this information frequently.

• Cut up or lock away all credit cards during a recession.