For some people, putting away enough money to go on a vacation is the ultimate luxury. For others, dining out once a week or getting a monthly pedicure is a real treat. Whatever your lifestyle, it’s important to understand how to get the most from your money so you can live comfortably and within your means.
To achieve your financial goals without sacrificing your lifestyle, follow these tips:
Determine essential expenses
The first step in creating a budget is to determine your nonnegotiable or fixed expenses such as rent, car payments and utilities. You also can choose to put things like gas and groceries in this category. Add up these expenses, and subtract the total from your monthly income. The remaining amount is what's available for discretionary spending: joining a gym, entertainment, shopping, travel and dining out.
Many personal finance and budgeting tools are mobile, and allow you to track where your money is going. You can make smart financial decisions such as whether or not to join that after work happy hour. Budgeting is flexible. You can always shift your priorities, saving some of those wants and needs for next month.
Keep an emergency fund
You never know when your car might break down, when you’ll need to take time off from work for family issues or your AC will begin to leak. It’s important to be prepared for life’s unexpected turns by having an emergency fund to tap. If you have three to six months of expenses saved up, you can avoid taking on debt. If you don't have a fund, start saving now. When something goes wrong, and it will, you won’t have to reach for your credit card or take out a loan to cover the cost.
- Also on U.S. News & World Report: Best budgeting strategies for living in expensive cities
No matter how you feel about food, one thing is for sure – you have to eat. There are plenty of ways to think smarter about what you spend on food. Eating out often costs more than cooking at home, so even if you hate cooking, it pays – literally – to do some reading up on easy, fast recipes. You'll avoid the temptation of calling for takeout seven days a week. Consider making large batches of your favorite recipes over the weekend. Then, bring smaller lunch portions to work the next week.
Evaluate your housing costs
If you're paying for digs that are beyond your means, it might be worth finding a roommate to reduce your living expenses. Carefully furnishing and maintaining your home also can cut expenses. Opt for used furniture and appliances instead of new items. Take the time to clean and refurbish them yourself. Extend that do-it-yourself attitude toward maintenance, too. You can solve many household problems without hiring an expensive contractor.
Don’t plan a budget you will never be able to keep. Just like with a diet or an exercise program, it’s important to be realistic. If you’ve never been able to stick to a savings plan, or are a compulsive spender, don’t expect this to change overnight. Instead, start by setting small goals so you can build the confidence to tackle bigger changes down the road. It’s a marathon, not a sprint!
Above all, know that budgeting doesn’t have to be about deprivation. If you follow these tips, you can easily create a livable budget that will help you achieve financial peace of mind.
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VIDEO ON MSN MONEY
2. Buy the cheap computer: a $300 laptop will do everything you want and be obsolete the same time as the $1000 one. ( you could buy a new 300 laptop every 2 yrs and still come out ahead)
3. Buy $25/month car insurance (will save a TON) from Insurance Panda.. there is no need to get an expensive policy from a place like GEICO or State Farm
4. Stop going out to eat so much, no fast food, go to a restaurant maybe once per month.
5. Stop buying things to impress others. ( think cars, clothes gadgets- don't tell me youre not guilty)
6. Don't get the latest smart phone as soon as it comes out or you are eligible for an upgrade.
7. Buy a used car NEVER lease a new one.
Only buy what you can afford to pay for in cash.
Minimize what you allow the centralized federal government to take from you so that they may support others who choose not to work.
Take another job if required.
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