Three Ways to Avoid a Budget Deficit

Both of you need to know where your money goes each month.
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Common causes of blowing your budget include impulse buying, impatience and the inability or refusal to recognize goods and services as wants or needs. While you may feel a budget is restrictive, work together as couple to spend 90 percent or less of your budget each month. Then, you'll have 10 percent left over to save or spend on more costly items.

Write Lists

Before you go shopping, write a list of items that you need with your budget in mind. Going to the grocery store each week without a list, you'll probably fall victim to impulse buys as colorful displays and enticing products command your attention. Grabbing random items means you'll spend more than what you've budgeted. With a complete list of everything you need, you won't buy impulsively and you'll stay within your budget. A list works if you're going clothes shopping, too. If you allow yourself a budget for clothing, figure out what you're going to buy -- a pair of jeans or running shoes -- and only buy that one item.

Limit Trips to the ATM

If you've budgeted a certain amount of money for miscellaneous expenses, feel free to draw some cash out of the ATM. But let your partner know that you did. It's easy to withdraw money here and there and spend it, but it can cause you to go over your budget. Keep each other "in the know" and report your ATM transactions or plans to make them. "Kiplinger Personal Finance" editor Janet Bodnar states that you should only make one ATM withdrawal per week and pay with smaller bills first to avoid breaking larger ones.

Envelope System

If you're really bad about staying within a budget, use an envelope system for expenses that fall outside of your monthly fixed expenses, such as rent or mortgage, utilities, car payments and insurance. Make envelopes for things such as "Clothing," "Entertainment," "Eating Out" and "Miscellaneous." If you want, make a set of envelopes for each of you. Then, divide the money equally into each category for each person. For instance, if you budget $120 per month for "Miscellaneous" expenses, you can either put the entire $120 into one envelope or divide the amount in half and place $60 in each envelope. Agree that when the money is gone -- it's gone. Don't borrow from other envelopes or each other.

Emergency Fund

Set up an emergency fund for unexpected expenses such as car or home repairs that aren't covered by insurance. Contribute a fixed amount each month; if you have room in your budget you can build a substantial reserve. If an emergency occurs before the fund is built up, you can use a credit card. Have an action plan for paying the balance off as soon as possible to avoid paying interest.

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