When you want to lose weight, you go on a diet.
When you need to trim fat from your budget, you need to do the same thing – go on a money diet.
The trick in stretching your budget lies in ‘trimming the fat.’ Recent surveys say the average debt per American household runs over $7,000, and we won’t see any debt relief until we are willing to make some significant adjustments on our spending habits.
First, you have to decide which expenses are your absolute priorities. You need to budget for necessities like groceries, rent or mortgage, utility bills, and making payments towards paying down credit cards. Pay extra if you can towards the credit card with the highest interest rate; if you can only afford to pay the minimum to the credit cards with the lower interest rates, do that.
You must now decide what is the “fat” in your budget. If you owe more than you can pay off every month, frankly, anything that is not a necessity is “fat”.
Gas-guzzling cars, boats, RVs and other expensive toys are “fat”.
Look to trim expenses everywhere that you can.
If you’ve been spending money on video game consoles and online games, maybe it’s time to snap out of the virtual world and, well, get real.
If you’ve been going to an expensive salon – find a cheaper hairdresser until you get your debts paid off.
When you’re on a diet you would substitute fattening food like ice cream with healthy food like yogurt.
When you’re on a money diet you need to find less expensive alternatives to all of life’s luxuries.
Buy generic groceries at the store instead of name brand groceries, and buy designer clothing at consignment stores where they’re cheaper. And do you really need to get most of your clothes dry cleaned?
Cut back on your designer or gourmet coffee habit. Buy generic brands at the grocery store.
Instead of a night at the movies, try matinee, which is cheaper. And do you really need cable TV and pay-per-view?
Go to the museum on their free nights.
Remember, developing a healthier consumer habit takes practice. Once you get in the habit though, you will find that even when you’ve paid your debt down, you are very likely to maintain healthier money habits in the future.