Five Beyond Budgeting Tips to Stretch Your Money

During tough economic times, many people begin to consider implementing a budget to manage their finances.  Budgets are a great idea, especially if a person is willing to stick it, but to truly take control of your finances, one must go beyond budgeting.  Fiscal responsibility must become a lifestyle.  For a person who is used to spending their money on every whim and fancy that strikes them, this can be a difficult road to tread, but the benefits of maintaining a fiscally responsible lifestyle far outweigh any sacrifices that must be made.  The following tips can help you get on the road to fiscal responsibility.

1.  Don’t spend more money than you have.

This piece of advice is painfully obvious, but it is the hardest to implement for anyone who is used to buying on impulse.  This advice is also hard to follow if you do not have a good grasp on exactly how much income you have coming in every month.  Making a budget based on your pretax money is an exercise in futility.  The next time your pay stub comes in, determine exactly how much is going out of the door in taxes and how much cold hard cash is being deposited into your account.  No ballpark figures or estimates; you need to know down to the penny how much money you have to work with.  Doing so will give you perspective and will likely make you think a bit harder before you make purchases.

2.  Make lists before shopping and stick to them.

This is definitely a lifestyle change, especially if you enjoy spending time at the mall.  Impulse buying is enemy number one to remaining fiscally responsible.  On the average shopping trip, there are certain things that you need, but the normal tendency is to walk out of the store with additional items that were “too cheap to pass up” and “just what I had been looking for.”  In order to go beyond budgeting, that mindset has to change.  Keep a shopping journal and make a list of what you are looking for before every shopping expedition.  Once you get to the store, head directly to where what you are looking for should be.  As you purchase items on the list, cross them off.  Once everything is crossed off, and here is the key, leave the store.

3.  Keep a daily journal of expenditures.

It is a natural tendency to underestimate how much money you spend daily.   We all have a tendency to forget about the little purchases that inadvertently slip in during the day.  Receipts are a great way to keep track of what you are spending daily.  Record all purchases immediately in a finance journal or personal budgeting software to ensure that it is accounted for.  After a week, take a look at exactly how much money you are spending.  You will likely be surprised by the degree the actual amount differs from your estimates.  Now, if you are ready to go beyond budgeting, set a daily limit on your spending and track all purchases.  Stick to it and stop spending when the money for the day runs out.

4.  Leave the credit cards at home and take cash instead.

One of the biggest things that accommodate impulse buying is the ability to pull out a credit card and pay the piper another day.  On the other hand, if you only take enough cash with you to buy what you need, you eliminate the ability to overspend.  While credit cards can be a way to track spending and earn points, those who spend more when they carry them need to leave them at home if at all practical.

5. Avoid all debt and make money work for you.

While there are occasions such as buying a home in which taking out debt may be unavoidable, most people finance purchases far more than they really have to.  Instead of adding more to the cost of every purchase with finance charges, make money work for you by saving and earning interest.

By learning to make the above mentioned lifestyle changes, you can make fiscal responsibility more than just a nice goal; you can make it a way of life.  Experiencing the freedom that comes from being debt free is truly a gratifying experience.  If you are willing to move beyond budgeting, then you can experience the kind of fiscal freedom that comes with responsible budgeting.

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