When a fixed amount of money is coming into your household budget, what you can control is the amount of money going out. Many of our expenses are necessary like groceries and rent, but there are others that could be passed up so that money can be allocated for a savings account instead.
There is also the big question about why we buy anything, other than basic necessities? We might say it's because we need it, but do we really? Advertising is geared to make us think that if we buy those products, we will be happier, healthier and wealthier or have more friends. But we know the truth, which is that no product out there can guarantee any of those things. If we think about it and still choose to purchase something that's not a necessity, at least we've made a thoughtful decision and balanced our want of that moment with the goal of saving money and maintaining a household budget.
Things You Will NeedMonthly Budget
Step 1Create a monthly budget. It sounds like common sense, but how many people actually set up a budget so they can identify fixed expenses and discretionary funds? Take the time to set up a budget and look at where your money is going.
Step 2Determine how much more money you would like to save each month than you are saving now. This will be the target amount of money you will try to save by spending less.
Step 3Review the budget you created and identify all unnecessary expenses. A daily mocha may feel like a necessary expense, but maybe you can find a cheaper alternative or cut the number in half that you purchase each month.
Step 4Groceries are a given, but look at what you're buying. Items that are processed or have excess packaging cost more. Ingredients that are the closest to the original form are the cheapest. It's been said a lot, but shopping only in the areas against the walls in the grocery store is usually your best bet for buying less processed and therefore cheaper groceries.
Step 5Examine impulse purchases such as new clothes or DVDs or toys. Ask yourself if you really need something when you're buying it. Is the purchase worth going into debt or having a smaller savings account? If so, try to find something on sale or try to find a cheaper option.
Set some monthly guidelines for you and your family so that you still can do things that are just for entertainment, but make a plan so that you know ahead of time where your money is going to go.