Living on a Budget

Living beyond financial means and incurring large amounts
of consumer debt are increasing among individuals and
families. Whether your income is large or small, creating a
budget and adhering to it, will allow you to avoid debt and
make better choices about needs and wants. When you create
a family budget it is not so much the size of your income
that determines success, but the way it is spent. The first
step is to identify payments and bills and start to
allocate your monthly income accordingly. Make categories
for each item such as; rent/mortgage, car payment,
utilities, food, household items, entertainment, vacation,
household repairs, personal spending, savings.

Budgets can be customized to fit individual and family
means, as well as needs and wants. As it is identified
where money is being spent, evaluating purchases and what
can be cut, changed or eliminated will allow for more
conscience and effective spending. Many people do not
realize how much they spend on eating out, unnecessary
household items or clothes. The money is gone and they
can't account for where it went. This is not only damaging
financially by spending more than one has, but it is less
fulfilling because it is thoughtless purchasing. For many,
immediate gratification in purchasing has led to a plague
of debt and bankruptcy. Avoid the trap of interest and
wastefulness by making clear decisions about money. Here
are some suggestions to help make a successful budget.

Counsel with partner/family on a regular basis about
spending Regular communication and goal setting allows for
financial success because all parties are on the same page
and work together to make decisions for the family. By
talking about goals it identifies concretely what the needs
and wants are for the home and family and helps eliminate
the power that impulse can have when shopping. Make
decisions together including gifts, eating out, home
improvements and personal spending amounts. Setting a
limited amount allocated for each person to do with what
they want without reporting gives freedom of choice, but
controlled. Depending on your financial status that amount
will vary and could be as little as $50 a month. It is
important to keep it within an amount that can be afforded.

Use it up, wear it out, make it do, or do without It seems
as though the more people have, the more they want. Just
getting more money is not the solution for most financial
struggles. Learning to evaluate needs and what can last and
what needs to be replaced is the first step to putting
money in the best places and making what ever your income
is, be enough. Although it is tempting to "keep up with the
Jones' " comparing possessions to others and trying to have
what they do will not allow for a successful budget. If
items are bought on borrowed money then possessions are not
a true reflection of finances anyway. Making due with what
one already has will eliminate a lot of unnecessary
spending and free up money for more wise purchases.

Give thought to purchases Planning for purchases and saving
before something is bought will prevent unnecessary debt
and the consequences associated with it. Mindless spending
has as negative of impact on the household as mindless
eating does for the body. You end up with more than you
need in the wrong places. Plan for what you want by making
a list of most important or most desired to least
important. Identifying your needs and wants will give focus
and direction for spending and help prevent impulse buying.
Shop around and see what is out there, what the going rate
is for an item, and what a good deal would be. Watch for
sales and coupons to make the best purchase.

Include savings in a budget Living within financial means
is not living on the maximum made, but planning for a rainy
day. Because unexpected events can and do happen planning
for such situations will prevent the debt that would have
to be incurred to pay for them. The more a person saves,
the better, set aside as much as possible in this area for
security and protection. Regret of purchasing is much for
common than regret of not purchasing.

Creating a budget will reduce financial stress. Making
conscience spending choices, well thought out and followed
through with will create financial freedom and power for
individuals and families. Wise choices will increase the
quality of life, even if the quantity of possessions is
not, and greater peace of mind will be found, and that is
success.

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Emma Snow is a writer who specializes in financial
planning. She has worked in the financial industry for over
eight years. Currently Emma works on a Finance and
Investing site at http://www.finance-investing.com and
Investing Partners http://www.investing-partners.com