The key to financial freedom is living on a budget. By creating a budget and sticking to it, you can find extra money that you did not realize that you have.
The budgeting process can be an uncomfortable and unsettling experience. In the 4 D’s – How to Become a Successful Budgeteer, I talk about the four “D’s” that are necessary to be successful in creating a budget. In the determination phase, the financials are pulled out and the ugly reality of where you spend all your money is determined. It’s during this phase that you will either become dedicated to making the changes that are needed or you’ll get frustrated and stop the entire process.
When you are in the determination phase of budgeting, you will see where you can make the changes necessary to change your financial situation. By paying attention to your spending habits and making the necessary changes, you will find extra money that you didn’t realize you had.
In budgeting, every dollar is assigned a place. For example, you may find that you are eating out entirely too much. By cutting back on eating out and taking the money that you have been using to eat out and assigning to a different place in your spending, you can pay extra on a bill. You can actually put money into savings.
Why did I pick eating out? Because that is an area that we often don’t realize that is consuming so much of our money. Cooking at home, re-creating the next night’s meal with leftovers, and brown bagging lunch can drastically cut back on the eating out expenses.
More information is available at the 4 D’s of Budgeting – How to Become a Successful Budgeteer.
Till next time,
JT Locke
The Frugal Housewife
About The Frugal Housewife
I have been trying to put together a budget and find it very intimidating. It is probably like you say, I get thrown off in the determination stage. I will have to try to stick to it.
I have no problem making the budget but sticking to it is the hard part. I say we aren’t eating out but when we are out and get hungry or thristy and it will be awhile before we get home how do you tell a child no. I have trouble telling myself no. It always seems like we have unexpected expenses come up also. Med.bills,vet bills,central air broke down,dental bills,mower broke down,the list just keeps growing and we only make enough to cover the basics now,not any of these things. We could afford everything before the economy went south. The prices of everything has gone up so much, it’s not just gas and groceries but the doctors,vets,dentists,and repair people have all doubled their prices. What do we do?
Good reminders of how budgeting can bring an awareness of where our money goes to.