When you are first learning how to live on a budget, things can be rough. You need to be diligent in sticking to your own rules and make sure you are recording each and every purchase. Identifying your problem areas will become easier, and from there you can work on getting things back on track. When the economy took a downturn, I was forced to implement a budget. It was not easy and it took a lot of self-control. These are some tips for sticking to your plan and still being able to live a decent lifestyle while saving money.
Identifying your problem areas
There is usually one area where you overspend. It could be your groceries, clothing, or anything else you can spend money on. When I was trying to identify my problem area, I was looking in the wrong spot. I knew I was spending a lot of money on food, but it was not on groceries. My boyfriend and I were spending $50 every two weeks grocery shopping for the two of us. What I was not figuring in was the money that was being spent at fast food places for "snacks" or a meal every now and then. The amount being spent was close to $20 a week, which was almost what we were paying for groceries. Cutting out the visits to fast food saved us $80 right off the bat.
Late fee elimination
I had to sit down and look at all our monthly bills. I divided everything into two piles. One was for the first set of bills due, and the second pile was for the bills due at the end of the month. I tried to balance out the amount we were spending per paycheck, but it was still a little heavier on the end of the month check. After getting everything in order, I realized that we could save ourselves $15 a month by avoiding late fees. I managed to get everything on a schedule and we were able to pay each bill on time. No more late charges for us each month.
It is hard to start saving, especially when have just put yourself on a budget. If you start small by putting away $5 or $10 every two weeks, your stash will begin to grow. This will be essential for running into hard times or needing some back-up money in case of an emergency. In the beginning we were saving close to $30 a month, or $360 for the first year. We are now saving almost $1800, which is a nice chunk of change to fall back on if need be.
Sticking to a budget can help you learn to spend properly and save money at the same time. There is nothing more important than keeping your finances in order, especially if you want to survive in this tough economy.
*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
More from this contributor:First Person: We Were Overspending by $1,500 a Year
- Banking & Budgeting
- Personal Budgeting