Spending Less 101

Living On A Budget

Do you always feel the shortage of money before the next pay packet? Do you want to upgrade you television set since last couple of years but are always short of cash? If you aim for a better standard of living and are targeting for a long term financial security then a proper budget planning is a must. You should try living on basic budget and start investing the surplus for a better return.

The most common problems faced across majority of working household in America is their inability to meet the basic living expenses which in turns speaks volumes about the economic health of the country. Living on basic budget means having sufficient amount of funds which will help you maintain and sustain a decent standard of living in a safe and secure community. Family’s basic budget is dependent on the number of factors like the number of children in the household, if you are a single parent, number of earning members in the family and state where you are residing in. While planning a budget the expenditure on following essentials should always be kept in mind:-

• Accommodation – Set aside an amount which you need to pay as a rent if staying in a rented apartment or keep aside the amount you need to pay as you monthly installment if you own private property.
• Food – You need to plan your budget to provide your family with a balanced nourishing diet
• Health care – It always better to have medical cover in case of emergencies for all your family members so do make plans to pay regular premiums for renewing these medical policies
• Taxes – Taxes which needs to be paid to the federal and state government should also be taken into account
• Education and child care – If you are pursuing any part time course or are paying education loan consider that amount in the budget. If having children in the family then a definite amount should be set aside for their education and health care need
• Other needs – Other factors such as transportation, personal grooming, clothing and other miscellaneous expenditures like paying of bills should also be included while planning a budget

You can plan you basic budget using simple pen and paper or Microsoft excel spread sheet. Alternatively, you can also download budgeting software from net. By keeping a track of your income and your expenditure, you can easily find out the surplus cash which can be used for investment and savings. In this way you can also be made aware of the shortages which will prompt you to cut the corners. Neilson research shows that, if you are living on basic budget and keeping track of all the inflow and outflow of cash you can actually save 15-20% of your yearly income. Keeping a track of your personal expenditure will also help you in faster clearing off your debts , plan for all the fun stuff like movies , basketball match tickets , keep a track of spending habits of your children and also instill in them the value of money.

So keep a track of your income and spending habits and plan your budget, this will definitely let you enjoy all the goodness of life while still living on basic budget.