On Target: Maintaining Your Budget In A Tight Market

Now, more than ever, staying on target with an existing budget is the smart approach to tough times. Tightening up spending may not seem like much fun, but being willing to put off instant gratification for future security will create even greater financial freedom down the road. It's not a bad idea to review your budget, see if there are any necessary adjustments that should be made, and consider these following tips for staying on target:

1. Save consistently. The challenge for many when it comes to savings is that slow and steady wins the race. In other words, putting even a little away consistently each month can add up over a year's time. Automatic payroll deductions are a sure-fire method for saving.

2. Budget in fun money. Cutting out any money for entertainment will instantly sabotage a budget. Think about what types of recreation are most enjoyed by you and your family and add up how much is spent each month on those activities. Ideally, entertainment costs should factor in about 5% of the overall budget. If it adds up to more than that, scale back on something or its frequency. Don't eliminate the fun altogether or the budget will quickly turn into drudgery rather than the road to financial success it's supposed to be.

3. Create Team Budget. If only one person in the family is concerned with a budget, it's going to be awfully hard to be successful. If a spouse likes to spend while the other is trying to save, the budget will be a losing battle. Why not take the team approach to the budget and recruit the whole family to find ways to make a difference. If each person decides to cut back a little bit the family will reap the rewards.

4. Keep paying down debt. Now is not the time to back off on the debt. Paying only the minimum balances on cards will cost thousands of dollars in interest fees - money that should be going towards the actual debt balance or a savings account. Consider paying more on the card with the highest interest and if there are other cards, apply the extra to the next highest card once the first is paid off.

5. Don't overuse debit cards. They are handy to carry around, but debit cards can also fuel impulse spending. Instead, keep a specific amount of cash on hand for weekly purchases. This cash-only method will help curb spending and help you think before making an impulse purchase.

6. Analyze the budget every few months. Even with a budget, it's amazing how much we can spend without even realizing it. Keep receipts for a few weeks or a month at a time to review where your money is really going. Perhaps adjustments need to be made for groceries. Or maybe that soda calling your name every afternoon is actually sabotaging your budget and your diet. Sometimes after living without something for a while, we realize we don't even miss it.

7. Be flexible. Like the economy, life is unpredictable. Events occur that are out of our control. So it's not a bad idea to create room for variable expenses. In fact, expect that the unexpected will occur - just as soon as you start making headway with your budget. Also, anticipate that you will go over budget from time to time. When that happens, don't let frustration take over. Determine to get back on track.

8. Live within your means. Spending more than you earn not only derails a budget, it can lead to serious debt. To begin living within means, consider first your approach to spending. Resisting impulse purchases and living with moderation is the only way to achieve true financial freedom. Imagine how much more enjoyable your next vacation will be if you pay for it with actual money in the bank.

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