One of the biggest keys to successful financial structure is to put in place a budget and stick to it.  A budget is the best way to get a grip on your spending and making sure that your money is being used in the way that you want it to be.  Life on a budget is a necessity and so if you haven’t been living on a budget, there is no time like the present to get started and the following information may be helpful in getting started.

Creating a budget generally requires taking the following three steps.

1.  You must track your spending to figure out your current spending patterns.  You can’t change what you don’t know about.

2.  You must evaluate your current spending and set goals to take into account not only your day to day living expenses, but also your long term financial goals.

3.  Continue to track your spending to make sure that it is within the guidelines that you have laid out for yourself.

PITFALLS TO WATCH OUT FOR

Cash leaks.  If you are spending money and you don’t know how much or where it went, then you have a leak.  In general, if you are well budgeted, then you should be able to predict how much cash you need to take for the week, and that should be it.  There should not be constant runs made to the ATM machine or bank, this shows that you are not budgeting effectively.

Spending More Than You Have.  This is a common problem in most households, but you really need to come up with a reasonable budget and then stick to it.  Overspending causes debt, and once debt takes over, it can be difficult if not impossible to overcome, so don’t fall into the trap of spending more than you make.

Don’t Confuse Luxuries With Necessities.  Understanding the difference can be the key to making a realistic budget.  Cable TV, cell phones, internet service and fast food, are not necessity items, even though many people try putting them in that category.  It is important to not try and fool yourself into thinking that you can’t live without these items.

Don’t Count On Windfalls.  When you are figuring out how much money you can live on, don’t include in your budget things like bonuses, tax refunds, or investment gains.  The extra money from such items may be nice, but shouldn’t be figured into your income.

Watch Out For Spending Creep.  This is what happens as you begin to make more money, you begin to spend more money.  You are much better off sticking to the same monthly budget and putting the extra income into your savings.

If you attempt to solve this problem using the lecture method, then you may just drive your spouse to spend more, thus resulting in more problems.

A more effective strategy to combat this problem is to keep track of household expenses.  Accountability for household expenses may be just enough to show your spouse the areas that need work, without really saying anything.

If this doesn’t work? Then the time has come to get separate bank accounts.  And if your spouse’s spending is causing extreme stress on your household finances, then you may have to consider stronger measures.

Finally, you might consider lightening up a little. Marriage is one of life’s great blessings. If you think the occasional iToy is expensive, wait until you see how much a divorce costs.

Let me sight an example.  Recently I received an e-mail from a popular clothing store that usually charges a lot for their clothing.  The sale e-mail said it was 30% off of everything, including clearance stuff, which we all know is unheard of.  Also, shipping was free over $100.00 so I took advantage of the sale and placed an order for some great items.  One of the things I bought was boys shirts, which were on sale for 2 for $30.00 and then I got an additional 30% off, which made these shirts about $10 a piece.  I placed my order and not 24 hours later, I received an e-mail telling me that they now had everything 50% off, so I really thought I had been had.  I went back online to look at these shirts that I had purchased the day before, and they were now priced at $34.50 per shirt and so with 50% they would cost me $17.25 per shirt, a good $7 more than I had spent.  I was relieved, but this just goes to show you that a sale, may or may not really be a sale.

It is important to shop around and even re-shop the same stores over and over again to insure that the deal you are getting is really a deal.  Realize the consumers are looking for the deals, and so the stores may make you think that you are getting one, even when you aren’t.  Shop wisely and you will see that there really are some great deals out there, but don’t be fooled by the make-believe deals that some stores are putting out.

1. Watch your unnecessary spending.   So many of us spend without really thinking about it.  We are functioning on automatic pilot when we are out there in the world.  Sometimes just cutting out that extra cup of coffee and donut on your way to work in the morning can be enough to ease a little bit of the pressure.  Did you realize that if you buy one cup of coffee a day for a week that is the same amount of money that it would cost you to buy a coffee maker? Even with the price of coffee these days, you still save an enormous amount just by brewing your own.  Not only that but invest in a plastic travel mug and clean it out.  You will not only save on $$$ but also be helping out the environment.

2. You can do your own car repairs.  Did you know that many of the instructions for performing an oil change or changing out filters can be found right online? You can even find a diagram of your car’s engine, so that you will easily be able to locate filters in the car more easily. This will take a little extra time, but it is a wise investment that will not only save you money, but will also take up some time in which you might otherwise be spending money.

3. Cut out your home phone bill.  Did you realize that in addition to just functioning on cell phones, that you can also get cheap home phone service through your high speed internet connection? Not only that but you can reduce your bill from about $70.00 per month to about $20.00.  These online phone services don’t charge you for long distance fees, and you can sign up right online and choose your own phone number.  It is worth your time to look into this option.

4. If at all possible ride a bike to work or carpool.  This will save you on fuel expenses and let you use the fuel you are buying for recreational purposes.  Again another money saving tip that will also help the environment while also reducing the wear and tear on your car, which provides truly a double savings.

5. Save as much money as you can and put it aside.  Hanging on to your money is definitely the way to go.  Now more than ever, saving is important and needs to be looked at.  When the economy goes through a rough spot companies will be cutting back, so unless you are in the food or fuel industry, your job could become an extra expenditure that your company doesn’t need.  Being prepared by having a little nest egg tucked away just in case is definitely the way to go.

There are many things that we can do to help ourselves feel a little less out of control.  We may not be able to control the economy, but we can control how we spend our money.  We must use this ability to create a more powerful perspective on the situation.