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That is the challenge when you are upside down and trying to meet your expenses in addition to paying off debt. My goal is to be debt free in 3 years and I am stumbling a little less each day. I had a shock recently, though. I learned that in order to get ahead I actually have to live below my means so that I can save money as well as pay off debt. I mean, heck, I was having enough trouble working with the concept of living within my means.
As I have said before, I began by really tracking my spending, but the real challenge has been developing a budget and sticking with it. Erin Hufstetler at Frugal Living at About.com offers the follow great advice:
- Be honest about your spending habits, and you’ll end up with a much more realistic budget.
- Don’t forget to budget for fun; budgeting isn’t about total deprivation.
- Don’t be afraid to change your budget; a good budget is always evolving.
Another thing I ran into, while trying to develop better habits was the slow leak expenditures such as:
- That daily stop at Starbucks or “The Bean” or wherever. At work, my peers and I go for coffee as a team-building exercise daily. I go along for the social moment, but the trick is to learn that I can have that without actually buying a coffee I don’t need, since I already enjoyed the 2 cups I brewed at home before the commute.
- Bottled Water. Ummm, I live in a country where the water is relatively clean. Travel brochures to the California area rarely tell you to avoid the water, though some reports indicate there can be bad stuff in there. I have compromised by installing a water filter on the tap and reusing water bottles. Arguably a greener solution than dozens of plastic bottles used every month.
- Paying cash! When I actually took a close look at the interest and finance fees I was paying for using someone else’s money via the credit card, I almost threw up. My new policy is: if I don’t have the money now, I don’t need that item.
- Eating out! I used to lunch with my coworkers daily. Even though we went to places that offered discounts and low costs, that money added up way too quickly. Now I pick a couple of meals to eat out each week (because social time is important), but I budget them in advance and stay within the lines.
- This is an oldie but a goodie: Don’t shop hungry or depressed. Make a grocery list and stick to it. Utilize discounts and coupons whenever possible and try to plan meals and supplies around them. If it means making a quick sandwich before you head out to the store: make the sandwich!
I keep running into little obstacles in the form of habits that cause me to spend more than I need, or waste money I don’t have for something I wont use. What kinds of things do you do to stay within a budget?
