In these tumultuous times of tightening our belts and purse strings, it becomes evident if not obvious that we must be mindful of how we spend our money. A paycheck may come once a month, twice a month, or every week. After monthly expenses are met, there must be room for putting food on the table, putting away a few dollars for the future, and if any money is left over; then treat yourself to something nice.
The only way to keep track of money coming in and going out is to create a budget. A budget is the basic step to taking control of the financial future. This is all about tracking the income versus the expenses, then being conscious of where the money is being spent. A method of tracking expenses is to create a spreadsheet. On the spreadsheet there should be columns for income, monthly expenses, and any additional expenses such as credit cards.
Tracking expenses may seem difficult, but it's an essential part of keeping a budget. The budget will help in the awareness of how money is being spent over the course of the month. It will alert the consumer and make them think twice about how money is being spent in their household.
Saving money on groceries is another method of keeping up a good budget. These days with the rising cost of food affecting the ability to buy much in the grocery store, it is key for the consumer to differentiate between luxury versus necessity when food shopping. Consumers should remember to cut coupons for the items they shop for the most and to also observe the various sales by reviewing the weekly circular the grocery stores publish. It's important for the consumer to understand the store brand of food and non-grocery items can be of equal quality as the name brand items. When in need of finding other non-grocery items; dollar store are also a good source for finding products at reduced prices as they may be less expensive than what is found in the grocery store.
If there is a need for clothing, the question of luxury versus necessity comes back into play again. If there is a need for clothing, there are stores that carry name brands at low prices. Additionally, the consumer should always check the clearance sections in either the store or the company websites first. This will ensure the consumer is paying the lowest prices for the items they purchase.
Suzie Orman, well know financial advisor, said it best when she suggested that if the consumer cannot buy items with cash, the item should not be bought at all. One very effective tip to maintaining a budget is to use cash for making purchases. This method will eliminate unnecessary spending.
As time moves on and things change, it is advisable to evaluate the budget. The logic is to review the monthly expenses to see what should be adjusted as priorities change over time. At least once a year the budget should be reviewed to assess income and financial goals.
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