The Best Way to Budget

Monitor Your Lifestyle

Ideally, a budget gives you more control of your money so that you don't have to panic at the end of each pay period or in the event that you have a surprise expense -- your budget should not control you. So if you're having problems sticking to your budget, look back at your current spending and see where reality is butting up against your budget. For example, if you're constantly having overages on your cell phone bill, consider upgrading to a higher plan and then look at where you can cut back in other areas to compensate.

The best gift you can give yourself is to become debt-free, so if you can contribute more to your debt each month you are actually making space in your future budget to spend more on the things that you love. When you get a raise, don't immediately increase your spending -- increase your savings. If you're paying $300 toward your credit cards each month, once those cards are paid off think of all the things you can do with that money to motivate yourself to pay them off. If your debt is already paid off, make greater contributions to your savings account. Financial experts encourage people to make it a goal to save at least eight months' salary.

Many people think that a budget means cutting out all the fun from their lives. This is a huge mistake -- just as fad diets never last, neither will fad budgets. You must make room in your budget for the things you love to do if you want to stay on track. Love to travel? Dedicate part of each paycheck to a savings account just for trips. Enjoy skiing? Cut back in other areas so you can enjoy the powder.

There are lots of ways to continue doing what you enjoy at a lower cost. Get creative in coming up with ideas of how you can save money while still doing the things that you love. Start a dinner party group with friends instead of going out to restaurants. Join an online book swap program or borrow books from the library. Host a clothing exchange party. Once you start getting creative, you may realize how much mindless spending you were doing.