When you set a budget for that special Thanksgiving meal, you are more likely to include the special foods that may cost a little more, and be smarter about where to find them. The reason they are special is because you don’t have them all the time. If you don't make a budget for your Thanksgiving dinner, you are likely to run out of cash and either start using plastic or do without.
You don't want the same thing to happen in your life, that is, not be able to buy those special shoes or take that special trip because you are out of money. When you are in the lead, refuse to put yourself at risk by living beyond your means. Make a budget and stick to it Living within a budget isn't always fun, but it always pays off. On the other hand, if you live by the whim-of-the day, you'll end up drowning in debt. Then nothing is special. And all you can do is follow whatever road takes you to getting out of debt. It ties your hands and makes life miserable.
The best advice here is:
- List all your known expenses, like rent/mortgage, utilities chidcare, etc.
- Write down, for one month, everything you spend you money on (discretionary spending) - every lunch, latte, every piece of clothing...EVERYTHING
- When you look at your expenses and your discretionary spending, Decide what must you cut out (like 2 lattes/week or lunch out everyday) so that you have enough money to...
- Pay yourself first. That means putting aside a little bit of money each week or with each paycheck. Even if it’s only $5/week, it’ll ad up and, when it does, it’ll ease your mind. If you pay yourself first, and don’t touch those savings, you’ll find ways to be and do within your budget. I know what it's like to have to borrow on credit just to pay the rent. And I know what it's like to have a cushion, even a small one.
- Here's an extra tip: If you are a stay-at-home mom, or you only have only joint finances (which I think isn't a good idea), make sure you have a personal stash...just in case something happens. I have both separate accounts and a personal stash. I call mine "running money".
- Live beneath your means. OK, so maybe that means you can't have the top of the line anything, or buy both pairs of shoes, or let your kids play sports AND take piano lessons. I've known many people who have "over the top" lifestyles...right up to the divorce or bankruptcy. Few things can ruin relationships like the stress of being financially under water. Stop exchanging gifts with close friends and family, or set a price limit on what you buy for Christmas or birthdays.