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Keeping a budget is so important–but it’s also surprising that so few people do! That’s why I thought it would be great to bring you this guest post today–enjoy! ~ Nicole

Though budgeting may seem like an easy task at first glance, it in fact requires dedication and a close attention to detail. If you have recently fallen into a financial hole and are looking to develop an effective household budget, there are a few things you should do almost immediately. By building a solid economic foundation, you will find it easier to avoid spending money that you simply don’t have.

Keep Careful Records

All good budgets begin with meticulous records. If you are old-fashioned, you might simply record your daily expenditures in a journal. If you are savvy with technology, however, you can utilize sophisticated spreadsheet programs. When you have a better idea of where your money is going, you can better determine how to cut back. Carefully prepared spreadsheets, for example, might show that you are spending too much on lunches at work. The most advanced spreadsheets will also allow you to sort your expenses into categories.

Engage in Comparative Shopping

Each and every necessary purchase should be researched beforehand. Comparative shopping, in fact, is perhaps most useful for routine shopping outings. Before you go to the grocery store, for example, be sure to look at the weekly advertisements ahead of time. If you can, stick to products that are on sale. By comparing prices for milk, meat, fruits, vegetables, and whole grain items, you can ultimately shop at the supermarket with the cheapest weekly rates. Cutting coupons can also save you large amounts of cash in the long run.

Create a Rainy Day Fund

Though budgeting is designed to prevent your financial situation from spinning out of control, you can give yourself some extra security with a rainy day fund. By putting a few dollars from each paycheck into your savings account, you should eventually have a decent-sized emergency fund at your disposal. Car repairs, pet bills, and medical illnesses can strike at any moment. Severe debt and bankruptcy can thus be warded off with a bit of foresight.

Cut Transportation Costs

Whether you are a corporate bigwig or a college student working part-time, the price of gasoline is likely putting a healthy dent in your budget. Carpooling to work with a good friend is one way to slash fuel expenses. If you happen to live near your place of employment, you might try biking or walking to work. Many larger cities also have sophisticated bus systems that are quite reasonably priced. College students and seniors may be entitled to considerable discounts when they buy monthly or weekly passes.

Allow for Small Splurges

While tightening your economic belt should help you get your financial house in order, you need not strangle yourself completely. Treating yourself to an elegant dinner or a night at the movies will give you a chance to relax. If you’ve been able to adhere to your budget for several months in a row, you might even plan a vacation. The ultimate goal is to remain on track with your finances so that you can splurge every now and then. By working hard and setting some spending limits, you should still be able to have fun more often than not.

Stay on Track toward Goals

Yes, staying motivated may be difficult at times; you can help things along by envisioning a brighter future. After certain financial goals have been met, you can save for retirement, set aside money for a new car or truck, or perhaps even buy a house. With an emergency fund also available, you should be perfectly capable of facing life without excessive stress or worry.

Author: Stephanie Smith is a mother of three children, and is referred to the “Budget Queen” by her friends. She has managed to take her family from living paycheck to paycheck to being able to splurge a little bit. Be sure to check out her Google+ community.

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