How many of us like the word “budget?” I’m sure no one is raising their hand to answer that question. I’ve always had an idea of what I think I should spend on groceries and household supplies, but the truth is that it’s more of a dream than reality! When I look at my checkbook, the reality is that I always spend more than I intend. Couponing has helped me tremendously with decreasing my expenses, but let’s face it, in the present economy, the cost of goods is skyrocketing and having a rock-solid budget is one way to control spending.

For my household, our budget is about $100/week. This includes all groceries and household expenses. I look at my expenses each month to make sure I’m within budget. I also make notations if I have made unexpected purchases that affect my budget. I may have to adjust my grocery allowance because of coupons used or deals I’ve taken advantage of that impact the amount of money I save.  Here are some helpful tips to help you set your own budget.

1. Analyze actual costs

An easy way to assess your spending habits is to look back at your last 3 months of expenses. You can track this by saving your receipts for all groceries and household expenses, reviewing your purchases from checking account or credit card statements, or by using a spreadsheet. I like to break down my expenses by groceries and household purchases because it allows me to define the necessities. For instance, suppose you decide to have your carpet cleaned. This is an elective expense and can be scheduled based on when you have the available money.

2. Be realistic

Being realistic means I’m not kidding myself about purchases. If the budget is tight this month, then maybe I need to buy several cases of 24-pack bottled water on sale at CVS for $1.99, versus the Powerade case of 12 that’s on sale at Target for $5. If the kids are playing sports this month, then Powerade is needed. If not, then my realistic side needs to consider the Powerade as an unnecessary purchase if my budget doesn’t allow it for this month. I’ll also adjust my budget by decreasing the amount of paper purchases for a given month, such as paper towels and toilet paper if I already have plenty in my stockpile.

3. Consider variables

Meat purchases: I typically purchase meat when it’s on sale. Therefore, I may have an extreme purchase from one month to the next. I have to consider that when budgeting. If I can save 20-50% by purchasing meat on sale, then I make the choice to spend money on the spot because in the long run, I’m actually saving money.

Purchases for baby: Another variable may be purchases for babies. Babies need a budget of their own because of the cost of formula and other necessary supplies. Stockpiling is a great idea when sales and coupons line up to get diapers for under $5 a pack.
Remember that the variables that affect a budget are usually short term!

4. Remain flexible

Flexing is a necessary component of budgeting because it allows you to flex your expenses for unexpected purchases. For example, suppose my budget every month includes about $20 for unexpected purchases such as the great deals recently found at Target for kids games. Taking advantage of those sales with coupons, Cartwheel, and the store discount allowed me to purchase six kids games to use for birthday parties. Figuring the $20 for unexpected but needed purchases during the year allows me to stock up and save up to 70% versus going to the store and paying full price for a birthday gift! If I don’t need to use the $20, then I can roll it over to next month’s budget or stick it in a savings account.

5. Stay committed

Sticking to a budget requires commitment and resourcefulness. I always have the figure in my mind as to how much money I can spend this week. Now, I’m not foolish enough to think I’ll always be 100% successful, but I do aim for 90%. I factor in any “eating out” expenses into my grocery budget. If I do really well this week on curbing my spending, then maybe I have $20 left to treat the family to movie and a pizza. Rewarding your successful behavior is one way to stay true to your budget. If your budget allows you to rein in the spending and to really think about your purchases, then staying committed to it is a true advantage.

I look at my budget as something I definitely have control over. Maybe one month I save extra money and can contribute to my savings account or treat the family to a fun adventure. When you use your budget as a way to improve your life, it doesn’t seem to be as hard to follow! Give it a try. Set up a budget for this week and see if you can stick to it no matter what! You might be surprised!

This is a guest post by Tammy from St. Pauls, NC. 
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