All that being said, the hubs and I have historically done very well with cutting costs and getting by on little in a pinch. When we have goals and budgets you wouldn't recognize us compared to the impulsive and reckless spenders we become without those important things.
And as always, remember free advice is worth the price you pay....I'm certainly no expert in this arena, despite my accounting background, so please keep in mind these opinions are my own:)
1. Set a reasonable budget - In other words, "don't set yourself up to fail." Set a realistic budget that allows for unexpected doctor's co-pays, a night out to dinner, increases in gas prices, a new shirt, or maybe just a little Starbucks to make your morning. Creating a budget that is so tight that you don't have any extra available can leave you with a bitter taste and be reason enough to abandon budgeting altogether.
2. Get buy-in from all parties involved - I think its safe to say that in most homes, one person is primarily responsible for all of the finance stuff. So, while that person has the most insight into whats coming in and going out, it doesnt mean that all other interested parties shouldn't have a say and agree to what is going to be spent where. The hubs and I discuss our monthly budget as well as any extra or unusual things we know that need be included. We are aware of our "extra" spend that is available and work together to stay within that. It can lead to those dreaded "do you really need that" conversations but helps hold us both accountable and keep impulse spending in check.
3. Align your budget with some long and short-term financial goals - It's much easier to do anything if you know there's a prize at the end...even if that prize is paying off credit card debt (for which you really already have the prizes). We set quarterly, annual, and three-year goals (thanks to the "forever home" conversation) which helps us stay focused on the task at hand. We found that only having long-term goals resulted in us always saying "we'll catch up with our savings goal next month"...and then we said the same thing the next month - cue the big fat "womp, womp." We also like our short-term goals because nothing feels better than striking it off the list! Long-term goals can be a bit harder to set because most of us don't know how much we'll be making or what things will be costing a few years from now but with some conservative estimates you can set some broad goals!
4. Find a tool that keeps you accountable - We just recently started using Mint (I'm hoping to post more on that later) and its been great at tracking our spending compared to our budget as well as measuring our success in meeting our goals. Prior to that, we used Excel spreadsheets to track everything and I loved those things...actually still using them as a back-up but they require regular updating and tracking by you...which can be quite a bit more time consuming.
5. Simplify your life - Figure out what's worthy of being in your budget and what's not. As of late, the hubs and I have spent some time studying where our money is going and eliminating those that we don't use or no longer find value in...for example, the newspaper. Most days it sits on our driveway as the hubs and I catch up on the news via the internet. Seems a little silly to be forking over $14 a month just to take-up space in our recycler!
I'm hoping to make a weekly go of these kinds of posts and share our struggles and cost-cutting measures. There is nothing easy about the financial part of life...some days I look out back just to make sure I didn't miss a money tree in my backyard (and then remember I live in a money pit so those ideas dont reconcile)!
I'd love for you guys to share your budgeting tips or struggles and if you're at all interested in guest posting here about what does and doesn't work for you when it comes to living modestly, let me know - I'd love to have different perspectives!!