Living within your means is an art that requires finesse, maturity and a strong will to stay out of debt. “Debt-free” sounds good to everyone, but very few want to make and stick to a budget that will effectively reach that goal. Somehow, “budget” sounds like a 4-letter word to most people. This is because it is almost synonymous with being a miser or being outright cheap. It is no surprise that no one wants to be called or known as being cheap.
First Things First
Budget does not mean or imply that you have to live a cheap and/ or deprived life. On the contrary, a budget means staying in control; being the master of your destiny; staying out of financial trouble. All these terms are as positive as things can get. When you draw up a budget you will be able to:
• Know how much money you need every month
• Know how much money you are likely to spend every month
• Plan your expenses better
• Calculate how much you can spare for savings
• Calculate how much you can spend on charitable donations
• Plan for major purchases (house/ car/ college education/ vacations) more effectively
• Stay within your financial means (which is the most important aspect of them all)
What is Smart Spending?
Smart spending is what you do to get the maximum out of your hard-earned dollar. Here are a few very basic measures that will ensure you save quite a bit of money with the least effort:
1. Get registered for payment alerts for bill payments or better still try setting up an auto-debit account. This will save you money as you will stop paying all the unnecessary late fees and enhanced interest charges associated with late payments.
2. Make lists when you go grocery shopping and stick to the list. This will ensure that you save a significant amount of money because you will never end up buying half the store and finding out when you return home that you still did not get the main things you initially went shopping for. Also, be sure to take advantage of coupons and store reward cards. Both are like getting free money each time they are used.
3. Limit eating out. Keep eating out for celebrations and special occasions. Keep it under 5-6 times per month. Instead cook at home and party with your friends in the comfort of your own home. Consider getting a group of friends together and alternating who's home will be hosting the get- togethers each week. You will spend much less and have much more fun.
4. Beware of how much you spend on coffee. Oh, yes. It is lovely to run to the wonderful and cozy café and grab a nice cappuccino. However, these types of expenses add up to some dizzying amounts every month. Stop such indulgences and instead opt for home- made versions of your favorite drinks.
5. Buy only during sales. Make a list of gifts you need to buy for the holidays and special occasions (birthdays/ anniversaries, etc) at the beginning of each year. Then, stay tuned for any sales that will enable you to take advantage of phenomenal savings and allow you to purchase the gifts you truly want to buy for your loved ones.
6. Use public transportation/ car pools wherever possible. In most places in the USA public transportation is superb. Use public transportation to commute to your office if the transportation facilities in your region are good. Alternatively, organize a car pool whereby you save plenty of money on gas.
Smart spending enables you to enjoy all the things you want in life at a reasonable cost and in a modified fashion. Being a miser, on the other hand is refusing to part with your money even when you can improve the quality of your life. Doing without by default and buying selectively to get the best value for your dollar are not one and the same.