In order to reduce expenses and save money, it is vital to know where your money is spent.
That is why the best way to lower bills is to create a budget and stick to it.
Creating a Budget:
- The first step toward taking control of your financial situation is to do a realistic assessment of how much money you take in and how much money you spend.
- Start by listing your income from all sources – like salary, wages, social security, pension/retirement, interest on accounts, child support/alimony, real estate rent, investment dividends, unemployment and other take home income.
- Then, list your "fixed" expenses — those that are the same each month — like mortgage payments or rent, car payments, and insurance premiums.
- Next, list the expenses that vary — like entertainment, recreation, and clothing.
- Write down all your expenses, even those that seem insignificant. It is a helpful way to track your spending habits, identify necessary expenses, and prioritize the rest.
- The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education.
- Remember: The key to effective money management is to spend less than you make.
You can download a free budget worksheet
Your public library and bookstores have information about personal finance, budgeting and money management techniques. In addition, computer software programs
can be useful tools for developing and maintaining a budget, balancing your checkbook, and creating plans to save money and pay down your debt.