Since the recession of 2007, many Americans have found themselves struggling to make ends meet each month. Even those previously considered “well off” find themselves looking for ways to trim expenses. In fact, a recent study found that over 39 percent of households earning more than $70,000 per year now utilize coupons. By taking the time to set up a budget you can avoid ongoing financial struggles and worries that may plague you.
Having a budget means looking at your spending in a way to avoid excessive debt and setting realistic goals for spending and saving. With a workable budget, you can avoid the ongoing stress that comes with debt and actually enjoy your life. A workable, comfortable budget is something that may vary between individuals, so it’s important that each person determine what “comfortable” means to them going into the budgeting process.
For some, having enough money for a weekend getaway a few times a year may be a goal. For others, just being able to eat out once a week or enjoying a little non-essential shopping once a month may be a treat. Understanding how to get the most from your money without worrying about important bills is a key to being happy living within a set budget.
No matter where you live, the culture that surrounds you affects the way you think about money. It is that culture that helps dictate what you consider to be comfortable living. If everyone you know has a 60-inch HDTV while you’re squinting to watch shows on an 19-inch TV, you’ll notice the disparity. But does that disparity matter to you? Maybe you prefer a good book to an HDTV or a backyard BBQ to a dinner at a 4 star restaurant. Where your priorities lie are a big determining factor in setting your expenses.
Look at your bills/expenses over the past month and note areas where you could save. Do you need at $4 coffee each day from the corner barista or can you make it at home yourself (saving roughly $20 a week)? Can you save more by packing a lunch, taking public transportation or buying in bulk? Look around and you’ll be surprise what you can save each month.
Finally, be aware of what many experts call “frugal fatigue”. Being hyper conscious of your spending can become a problem in itself if it leads to the other extreme…..a sudden, unnecessary splurge. It’s important to recognize financial fatigue if it begins to affect you. If you’re tired of analyzing every dollar you spend, before you wreck your budget efforts, take a moment to consider the satisfaction and stability you’ll feel knowing you have some money set aside for an emergency or planned expense.
Hold to that budget! If you’re still feeling like you need to “spend”, stop in for a $4 cup of coffee just once a week and make do with that extravagance for now.