Nearly every person has been in the situation where the money coming in just doesn’t equal the money going out. In a society where products are glorified in advertisements and credit cards are put on a shining pedestal, this comes as no surprise.
My personal experience with budgeting started with picking up up a personal finance book when I was seventeen. I had been working part-time at a department store, bringing in about $520 a month, while spending about $600. After I started putting some budgeting tips to the test, I was bringing in the same amount, but my checking account was growing by half of my income each month. Even I was surprised at the jump; I hadn’t expected the budgeting to go so well. I’ve been budgeting now for over four years, and seeing the state of many people in America and beyond, I want to share some of the things I’ve learned.
- Sit down and look at your checkbook. If you don’t have a checkbook, look at your credit card statement or old receipts. In order to save some of the money that you’re already bringing in, you have to know what you are taking in (income) and what you are spending the most money on (expenses). Take a moment to note your income, but then you need to also make notes of what you’ve spent and on what. What can you cut? Have you been eating out at a restaurant more than once or twice a week? If so, isn’t it time to sharpen up those cooking skills?
- Make a plan. That’s right: make a plan, and set some rules. You don’t have to sit down and type up a list of rules to post around the house; instead, make some gentle mental guidelines that you believe are realistic and that you’ll remember. Spending too much on restaurant bills? Vow to only go out once or twice a week (compared to seven or more), and at that, at the least expensive places, perhaps even ones where you aren’t supposed to tip. Spending too much on clothes? Perhaps you could get yourself to straighten up the ones you do have…so you realize how many you truly are stocking up on! If you continually need new clothes, how about visiting that Goodwill where the clothes are gently used (if at all) and cost 5 to 10% of the store price?
- Go through your credit cards…and get rid of as many as you can. I have never owned a credit card, and I have a perfect credit score. Contrary to popular belief, you do not need a plastic debt-inducer to build your credit score. Sure, credit cards are convenient…and that’s how they get you into trouble. If you use cash or check, you have to literally be face-to-face with the dollar amount you’re spending…and in most cases, that makes it harder to part with and lets you realize how much of that bill’s total was unnecessary.
- Use what you buy wisely. Nearly everything you buy can be stretched out in use and save you money in the long run. After learning to budget, I personally learned how to hypermile in my car. My car went from getting 19 miles per gallon to 29 miles per gallon, saving me $200 in gas in a month alone. I also learned to better judge food serving sizes when I cooked so I couldn’t make too much…but if I did, I taught myself to keep leftovers and eat them. I began to try store brands and off brands, and shopped exclusively at Goodwill for clothes. This has also saved me hundreds of dollars in the past few years. Not to mention learning how to save water and electricity on a day to day basis, which saved my husband and I $75 per month on our bill in the first month of practice.
- Never underestimate a coupon. Save $1.00, or save $0.35…either way, that money is cash YOU keep in your pocket for just two seconds of scissor cutting time. Using just one coupon pamphlet, my husband and I recently saved $12.00 in one $35 grocery order, which means we ended up paying nearly 26% less than what we would have had it not been for the coupons. When you see the money add up, it makes it a lot easier to sit down and actually cut out those “useless” coupons!
- Refrain from going out to shop “just because.” Living on a budget does not have to mean you live a boring life. For those people who love shopping, they’ll also have to learn to love debt. In the end, those who live frugally end up having all the fun…and money! My husband and I watch movies from time to time, and we videogame together every day. However, we rent movies strictly from the library, and we rent games before buying, only spending money to purchase them once they are used and low in price. We used to be a couple who went out to shop because of boredom. Now, however, we’re having a lot more fun than ever before…and keeping an extra $300 a month between the two of us just because we don’t needlessly shop.
- Keep up with it! It’s a lot of fun to explore new ways to save the money you already have. If you work together with your partner or your family, you’ll find it’s exciting to meet together and discuss how you’ve saved money lately. My husband and I set aside one day of each month to sit down and add up our income and expenses, finding it so exhilarating to be saving hundreds of dollars when only months before, we’d been spending more than we made. Because of budgeting together for three years before we married, we had enough money for a down payment on a home. Keep up with budgeting and finding ways to save and cut back…and you could be surprised with the positive results.