Budgets give you a framework for your spending habits. When the expenses outweigh the income on the budget, it's time to tighten the belt. Cutting the household budget gives you more breathing room when it comes to financial commitments. A few dollars here and there trimmed from the budget adds up over time, giving you more of a budgetary cushion. The more money available in the budget, the less likely you will need to rely on credit cards.
Track your spending for a month, keeping all bank and credit card statements, as well as receipts for cash payments. Compare the money you actually spend with the amounts you allotted in the budget.
Identify areas in which you are consistently going over the budgeted amount. Determine if you can reasonably scale back your spending to stay within the budgeted amount or if you need to bump up that number while cutting back elsewhere. For example, if your utility bill is consistently high, try sealing up leaking windows, turning down the heat and shutting off lights when not in use to lower the bill.
Identify extra services, clubs or other recurring expenses that you don't use often. Get rid of the gym membership you rarely use or cancel subscriptions to magazines you never read.
Save money on home and auto insurance by raising the deductibles. Shop around with different insurance companies to make sure you are getting the lowest rate possible.
Improve your health by eating a healthy diet, exercising and getting regular preventive care. Staying healthy reduces your health costs because you reduce the risk of serious and expensive health problems.
Scale back on the features you pay for on your phone, cable and Internet service. Choose smaller packages with fewer extra features to cut the budget.
Cook at home to save on your grocery budget. Avoid processed foods when possible to improve the health value and decrease the cost of your groceries.
- Weigh the effects of a budget cut before doing it. For example, raising your insurance deductible from $100 to $1,000 might save you on your monthly premium, but if you can't afford to pay the $1,000, you'll be in trouble if you need to file a claim.
Based in the Midwest, Shelley Frost has been writing parenting and education articles since 2007. Her experience comes from teaching, tutoring and managing educational after school programs. Frost worked in insurance and software testing before becoming a writer. She holds a Bachelor of Arts in elementary education with a reading endorsement.