A Diet For Your Budget

June 1st, 2009 | Posted in Budgeting

If you’re trying to shed extra pounds, you diet. If you’re trying to get your budget to stretch farther, you’re going to need to the same thing with extra expenses. Get rid of them. With the average American household’s debt now exceeding $7,000 according to recent surveys, the only hope of relieving that debt is to adjust your spending habits.

Your first priority is to determine what things you absolutely need. These necessities are things like food, utility bills, mortgage or rent, and paying down debts like credit cards and car loans. If you can find room in your budget to pay more than the minimum balance on a credit card, do it. Focus these additional payments on the card with the highest interest rate. If you can’t afford to pay more than the minimum on more than one card, that’s okay. Just try to relieve yourself from as much compounding interest as possible.

Now, it’s time for you to start finding places to cut some fat off your budget. If your debt exceeds your income, almost everything becomes “fat.” Start by looking at or for big ticket items like RVs, boats, or even gas guzzling cars. You don’t need these things, they’re a luxury you obviously cannot afford right now.

Are you one of those people who has all the game consoles and buys all the new releases the day they come out? It is time to put the controller down and spend some time off the couch. This habit can be very expensive.

Getting your hair done at an exclusive designer salon? It’s time to look for a more economical choice for your hair styling needs.

If you’re trying to lose weight, you give up junk food. If you want to lose weight you’re going to have to cut out all the junk expenses you can.

At the grocery store, try buying the generic instead of the name brand whenever possible. If you want designer clothes, find consignment stores where you can get them for less. Honestly, how much of your wardrobe is really dry clean only? While you’re at it, give up that designer coffee habit, caffeine is addictive.

Instead of a movie night, have a movie afternoon. The matinee showing costs less. With the amount of entertainment content on the internet these days, do you really still need cable tv or pay-per-view? Nope. Look for free outings, like special nights at museums or community markets and festivals.

It might be rough adjusting to a new lean mean money diet, but once you’re in the swing of it, and you see your debt burden decreasing, you will not even miss the things you cut back on.