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Start Living on a Budget Today

7 Steps to Smart Money Decisions


Start living on a budget that works for you and your family. Make healthy financial choices to eliminate debt, decrease costs and stretch a paycheck without constantly crunching numbers.

1. Create a Budget

Black woman paying bills online
Blend Images - JGI/Jamie Grill/Brand X Pictures/Getty Images
The first step to living on a budget is to track your family's income and expenses. Gather all of your bills, paycheck stubs, bank statements -- everything you have that shows money coming in or going out. Write a frugal budget to manage your money. When you wing it every month without a budget in mind, you're passing up opportunities to slash unnecessary costs and save money.

2. Set Financial Goals

When you're struggling month to month just to pay the bills, saving money seems like a long-term goal that's always out of reach. Whether you want to save money for your child's college fund or you'd like to tuck money away for your retirement, setting financial goals is an important step in protecting your family's future.

3. Get Out of Debt

While being in debt can feel overwhelming, managing your debt is easy when you set realistic goals. A debt management plan can be built into your budget so you can pay off your credit cards, mortgage and eliminate your overall debt.

4. Lower Your Taxes

Stop dreading the April 15 tax deadline every year. Simple tweaks can reduce your taxes and add money to your family's bottom line. Choosing the right filing status, studying current tax rules on claiming dependents, using the child tax credit and taking advantage of child care and dependent care expenses are a few of the tax rules you should be aware of every year when it's time to file.

5. Plan for Financial Emergencies

The stress of a financial crisis can put a strain on the wealthiest families. Establishing an emergency fund helps you build up savings for unexpected expenses. Life insurance and a last will and testament can also shield your family from a financial hardship if something should happen to you or your spouse.

6. Control Spending on Food

Cut the costs of feeding your family with a well-planned food budget. Save money on groceries with a ready-made shopping list of your family's favorite recipes. You'll always know what you need and can spot a sale on your staples. This keeps your kitchen pantry stocked without having to pay full price. Think outside the grocery store to find even more savings. Kids eat free deals at restaurants are also budget-friendly options that give you a break from the kitchen without draining your bank account.

7. Budget for Travel

Many families think a vacation is an automatic budget buster. Stretching your travel dollars can make your dream trip a reality, though. With a few extra steps, you can save money on your vacation to make a getaway a part of your budget. If you discover your budget just won't allow your family to travel, plan a staycation that keeps everyone close to home but still has room for day trips and fun activities to fit any budget.

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