How to Budget Wisely

Making a budget work for you can be a challenge. If you stay organized and budget wisely, you should be able to stay within your budget and be able to save for the future.

Difficulty:

Moderately Challenging

Instructions

Prepare a Budget Worksheet

1. If you have a personal computer with Microsoft Office software, you can create a spreadsheet in Microsoft Excel.

2. If you do not have a personal computer, you can buy budget ledgers at office supply stores.

3. Create a column to list each monthly expense. This may include house payment or rent, food and clothing, gasoline or transportation needs such as fare and toll fees, dining out and entertainment such as going to the movies or movie rentals.

4. Include utilities such as electricity and water, as well as cable and telephone expenses including Internet and cell phone fees. Add any expense that you incur monthly, including church donations.

5. Add a line for the income at the top and total the expenditures at the bottom. Then subtract the expenses from your income.

Save Money

1. After getting an overview of your monthly expenses, look for anything that you can cut down to help you save money. For example, if you always eat out at work, try bringing left over or home cooked meal. You can also bring sandwiches and drinks. This can save you an average of $200 per month if you estimate $10 of lunch per day.

2. Limit your movie watching to once or twice a month instead of four times a month. For a huge family this can be a lot of savings. Before going to the movies, eat first to cut down on food and drink expenses. Just buy drinks or bring your own if you can. You can cut down transportation fees such as fare, gasoline and toll fees if you participate in a carpool or ride sharing.

3. Buy clothes from discount stores or wait until they go on clearance. Limit clothing expenses to only once every two or three months, surely you do not need a new wardrobe every month.

4. Pay yourself first. If you set aside for your savings first before you start spending the money you will be able to keep money for your emergency needs and then you can work on the amount of money that you have left for your monthly needs. Think of that savings as non-existent so that you would not touch it. Before you know the certain amount you set aside for savings will grow bigger in due time. Shop for cheaper car and home insurance and use coupons when doing your groceries.

5. Stick to your budget. Once you have allocated or planned your budget well, stick with it so that you can keep saving money. Once you get used to it, it will be just second nature to follow your budget or think of budget saving ideas whenever you go out spending your hard earned money.

6. Avoid using high-interest credit cards. It is better to use a debit card so that you only spend what you can afford. Keep only a couple of major credit cards for unexpected emergencies and don't use them unless you really have to.

Tips & Warnings

• Make sure that your partner or spouse is on board. It is challenging if the other one doesn't have the same money sense as you do.

• Teach your children early in life about saving money.

• Do not fight over money. Reach an agreement without compromising too much of your comfort or lifestyle that you are used to having. Making financial sacrifices are great but be careful that it doesn't put a strain on your relationship.