This is Step 4 in a series of 5 articles about starting and sticking to a budget. To start with step 1, click here. |
4. Adjust your spending.
Now comes the hard part. Take that budget and start looking at where you can cut down on spending. Here are some ideas to get you started.
Start by cutting up all but one of your credit cards if you "revolve" your credit (carry a balance) each month. Use a debit card instead (remember that overdrawing your account can result in steep fees), and keep one credit card for emergencies. If you keep mounting debt, it's that much more difficult to get out from under it.
Cable television is an expensive extra. Sure, the cable company saves you by "bundling" TV, Internet and telephone together, but do you really need all three? As much as it "hurts," consider cutting cable TV -- or your landline phone if everyone in your household has a cell phone. Price "family" plans and look for a mobile phone provider that offers discounts for families.
Can you downsize your car? With gas getting more expensive by the day, it might be time to trade in the SUV or minivan for a sedan. Can you ride the bus or take a train instead of driving to work each day? Can you carpool? How much do you pay for parking? If a pass to your downtown office parking garage is pricey, consider parking in a cheaper lot a few blocks away. You'll save money and get exercise at the same time.
Grab that spending journal and start with the "extras." Cut back on a couple of dinners out each month (save up to $200 for a family of four), switch from high-priced lattes to plain brewed coffee (save $15 a week) or bring it from home, and bring lunch from home two or three days a week (that's about $800 a year back in your pocket). Find other ways small changes can add up to big savings over time.
Extra credit: Want to trim hundreds, even thousands, of dollars from your family's budget each year, but still watch your favorite movies, read the latest books and listen to your favorite tunes? There's an easy and free way for you to do all that and more. All you need is a library card. Yes, we would all love to have a large personal media collection, but take a look at what you've already got. Why let those movies, books and CDs sit around and gather dust? Get them from the library and you'll save space and money! If you buy one book a week for $15, that's $780 a year! You might have to wait a few weeks to get the "hottest" new releases, but there are plenty of classics to keep you entertained in the mean time!
Keep reading! Starting and Sticking to a Budget – Step 5