Budgeting to Survive

How much do you spend each week on eating out?  How much on gas? Groceries? Impulse purchases?  Until you know where your money is going you won’t know how much money you really have to spend and how much you could be saving.

To survive this economy you need to start running your household like a small business.  Small businesses have limited resources so when they make a purchase they first do their research to make sure they get the best purchase for their needs and budget.  What are your needs?  Do you really need dessert with your lunch?  What about the HBO movie package you pay extra for each month with your cable?  A small business isn’t likely to purchase a soda machine just because one of its employees requested it.  Similarly, you shouldn’t go to the movies once a week just because your kid wants to see the latest movie.

This is a time to prioritize and make those tough decisions.  While you should not completely cut out spending you need to determine what spending is profiting you and what spending is just a waste of money.  To some people getting a cup of coffee at Starbucks a couple of times a week is the only way they can relax for a few minutes and just enjoy life.  If that is you then you shouldn’t cut out the Starbucks because without your relaxing me time you might not be able to function as well as you would with that me time.  To you that is important so  you can make it a priority and cut out something that isn’t as important to ensure that you have the money to keep that up.

While life isn’t great right now we need to remember that this doesn’t mean that we bury our heads in the sand and pretend that everything is normal and spend the same way we did a couple of years ago, but neither can we totally close our purse strings and save every dime we get.  There has to be a happy medium where we make allowances for what is important and save for the future by cutting those things that aren’t as important.