Q:

How can I live on a tight budget?

A:

Quick Answer

Living on a budget can be really difficult depending on your lifestyle; however, living on a budget can improve quality of life. By creating a budget, setting goals, getting out of debt and controlling spending, one can learn to effectively save and spend money, advises About.com.

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How can I live on a tight budget?
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Full Answer

The first step to living on a budget is to create one that realistically tracks income and expenses, according to About.com. By accurately accounting for each dollar earned and spent, one can then set realistic goals for spending and saving. For example, adding salary bonuses that aren't guaranteed is not a good idea; if a bonus isn't given out one year, there's a big earning gap in the budget. Only add guaranteed sources of income.

Next, tally up all expenses. The goal is to create a budget that doesn't use all income for all expenses. Getting out of debt is one way to eliminate an expense. By eliminating a monthly credit card payment, that money can now go toward a college fund, retirement or a travel plan.

Start planning for financial emergencies. Hospital and medical costs are extremely expensive. Having money set aside is an excellent way to ensure that there are no surprises should one get hurt or fall seriously ill.

Last, control all extra spending. Create a grocery list and stick to it. Try to eat out at restaurants less often. Set strict amounts for clothes, shoes and all extra activities.

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