How to get the most out of your money using a budget ~ Balancing the cost of comfort with necessary expenses in a sustainable way

Being Deliberate With Your Money: Plan

5 Tips for Living Comfortably on a Budget

by Nathan Chandler

Sadly, few people on this planet have access to immense stockpiles of gold bullion and vaults full of sparkly diamonds. Most of us have to live within our means and on a limited budget. This is especially true in these recession-ravaged times, in which the idea of luxury living looks less like brick mansions and more like rent-stabilized apartments.

Since the so-called Great Recession began in 2007, the ranks of people living below the poverty line in America have expanded substantially.

In the southern part of the United States, around 17 percent are considered impoverished. In Washington D.C., more than 30 percent of children live in poverty. (Reuters)

Even for those who’ve managed to avoid such destitution, the recession has strained family finances. Relatively wealthy families, especially, have become ardent users of coupons; 39 percent of households earning more than $70,000 per year have resorted to coupon clipping. (Time Magazine)

Quite simply, many people have started

learning to live on a budget.

Having a budget equals thinking about money in an analytical,

logical way to avoid excessive debt.

It also means setting realistic goals for spending and saving.

In doing so, you can prevent the recurring,

hair-graying stress of getting behind on bills

while actually getting more fun and enjoyment out of the money you spend.


Before we launch into our tips, it may help to clarify exactly what it means to live comfortably on budget.

There’s no black-and-white answer to that question.

      • For some people, putting away enough money to go on an annual three-day vacation might be the ultimate luxury.
      • For others, going out to eat once a week or getting a monthly pedicure might be a real treat.
      • Whatever you enjoy in life, there’s a difference between living on a fun-starved budget and living comfortably — yet still affordably.

Perhaps, the only thing stopping you from enjoying life a lot more is developing a better understanding of how to get the most from your money without having to sweat important bills.

So if you’re one of the vast majority of Earth’s citizens who must

carefully plot out purchases both minor and major, keep reading.

You’ll see some tips that may help you save more money

and have more fun at the same time.


5: Prioritize Your Life

No matter where you live, the culture that surrounds you affects the way you think about money. Some societies preach the gospel of rampant, wasteful consumerism. Others stress the importance of extreme frugality and a sense of do-it-yourself survivalism. And of course, in between those extremes lies a whole range of attitudes and beliefs about money.

The culture around you affects what you consider to be comfortable living. If everyone you know has not one, but two 60-inch HDTVs, while you hobble on with a 27-inch TV from the dinosaur age, you’re bound to notice the disparity.

But does your sense of comfort require that you own massive (and massively expensive) technological marvels?

Do your life’s core values mean that more toys equal more happiness? If that’s the case, you’ll have to make sure you have the earning power to buy those toys without sacrificing critical aspects of your finances, such as savings and important investments, like education or a house.

Many people must simply pick and choose what’s most important to them in terms of comfort. Whether it’s a livable home in a safe neighborhood, good food, a house full of puppies, or a bevy of tech gadgets makes no difference. You just have to decide what really matters to you.

With consumer confidence in the United States at its lowest in three decades,there’s talk that maybe people will slowly learn to become savers instead of consumers and spenders. (Reuters)

But that kind of shift will take years to complete. As it is, Americans spend a tremendous amount of money in areas that could be trimmed. You can compare your spending against the average by checking out this illustration at Visual Economics.

In the meantime, economic realities mean people must learn

the art of balancing

the cost of comfort items with necessary expenses in a sustainable way.

Keep reading and you’ll see just how to do that.


4: Find and Use Budgeting Tools

Whatever their reasons, many people don’t apply any sort of planning to their personal finances. And just like businesses without plans, individuals also fail financially. That’s why you need to create a budget.

For many people talk of budget planning causes boredom-induced comas. Whether you love or hate numbers, this critical task can mean the difference between living comfortably and picking change out of (other people’s) couch cushions to buy pizza once a month.

But like any other long-term project, by setting goals and tracking them you actually make budgeting fun. The delayed gratification of watching your savings balloon might greatly offset the pain of cutting silly expenses.

Use the power of budgeting tools to help you. You can start immediately with online tools like those found at Kiplinger’s budget tool page.

Financial wizard and author Dave Ramsey offers free budget worksheets on his Web site. Suze Orman, another celebrity debt fighter, provides free online tools for determining a range of expenses, from mortgages to interest and much more. offers a free online money management tool that lets you track everything from your credit cards, to bank accounts, to investments, all in one place.

Enough with the grown-up lectures about budgeting. On the next page, we’ll start diving into the juicy tips that let you get more enjoyment out of your money.


3: The Good Food Fight

For some people, a spectacular meal at a five-star restaurant is worth missing a mortgage payment. For others, the act of cooking and subsequent mastication is a boring but necessary chore. No matter how you feel about food, one thing is for sure — you gotta eat.

Americans spend a lot of money on food, to the tune of about $770 per month for a family of four. ( USDA)

But really, that cash could be spent more wisely.

There are plenty of ways to think smarter about food expenses. Here’s one critical pointer — eating out often costs more than cooking at home. 

So even if you hate cooking, it pays –

– literally –

– to do some reading up on easy, fast recipes

that prevent you from calling for carryout seven days a week.

Buying ingredients for those recipes is itself an art form.

You can opt for dozens of fancy, individually packaged products that actually cost more than restaurant food in the long run.

Or, you can buy fewer (nonperishable) items, in bulk, and use them for months before running low on supplies.

Items such as dry beans, pasta, nuts, sugar, dried fruits, flour, grains, vegetable or chicken stock — and all sorts of canned vegetables — save you money in the long run.

Grocery coupons are making a huge comeback, and for good reason. Americans clipped 3.3 billion coupons in 2009. The savings from those glossy bits of paper? Around $3.5 billion [Time Magazine].

The key is to plan your meals in advance with the items you see are on sale in store circulars, the Sunday newspaper and online at sites such as and

Don’t forgot about coupons that are available directly through the manufacturer’s Web site, too.

Of course, you still have to go out on the town now and then. That’s where the social coupon phenomenon (from the likes of Groupon, LivingSocial, Scoutmob and others) comes in handy. Buy deals from great restaurants and wait to use them for special occasions, and you can eat very well for very cheap.

Food is just one facet of your budget. On the next page, we’ll dive into making another necessity — your home — more comfortable.


2: The Roof, The Roof is on Fire

Hopefully, your living quarters aren’t literally on fire, but if you’re paying for digs that are well beyond your means, those shingles might as well be singed because you won’t be there for long. You need shelter of course, and you can find comfortable living quarters without sending your bank account up in flames.

If your situation allows, finding a roommate is one of the most powerful ways to reduce living expenses. Stay in the same location and cut your rent and utilities literally in half, or move into a bigger, swankier place and you can still pay less, just by sharing your space with someone else.

This rule is especially true in areas with high costs of living. For example, in Los Angeles, you could easily save more than $200 per month by sharing your space. (AAGLA)

In San Francisco, you might save a whopping $700 per month. That’s like giving yourself a nearly $9,000 raise in salary. (Paid)

Just be sure to choose your roommate carefully,and consider setting automatic payments so that you’ll never have to worry about getting stuck with someone else’s share of the rent. (America)

Carefully furnishing and maintaining your home can also drastically lower expenses.

        • Opt for used furniture and appliances instead of fancy new items.[This is also good for “Living Green” in an eco-friendly way]
        • Take the time to clean and refurbish them yourself.
        • Not only will you save cash and learn some extremely useful skills, but you can take pride in your work and value those items as more than throwaway, disposable goods.[Taking pride in your work and developing your skills…This is a good idea.]

Extend that DIY attitude toward maintenance, too. You may not have Bob Vila-level skills, but you can solve many household problems without hiring an expensive expert.

Just look for a YouTube video that walks you through ways to unclog that sink. [ There are also books on how to do it yourself in the library that can be used free of charge…. be sure to return the book on time or re-new the book to avoid late fees; then it is free to read]

On the next page, you’ll see even more about budget living, and how you can avoid the enemy of all good budgets — burnout.


1: Beware Budget Burnout

The fancy-pants media name for budget burnout is “frugal fatigue,” (a phrase coined by analyst Paula Rosenblum) and with economic worries escalating, it’s the kind of fatigue more people are getting familiar with. (RSR)

In short, frugal fatigue refers to the mental and emotional toll that sets in when you feel like you have to carefully weigh each and every purchase you make.

It doesn’t matter whether you’re used to having a large disposable income or you’re more acquainted with limited spending power. This kind of fatigue can strike anyone who is trying to be more conscientious about limiting unnecessary purchases.

One potential pitfall to frugal fatigue is that eventually you simply get tired of being so deliberate with your money.

As a result, you might start splurging unnecessarily, perhaps as a one-time weakness, or as a chronic pattern that threatens to obliterate your savings.

It’s important to recognize fatigue if it begins to affect you. If you feel totally bored with budgeting and sick to death of squeezing pennies, you’re at risk for a spending bender of sorts. Don’t give in to the temptation.

Instead, be creative and kind to yourself and to your family. 

Splurge and treat yourselves, but be smart about it. 

Use resources such as Frugalista, Woot or Clark Howard’s tips to find cheap deals that let you have a little fun without hemorrhaging big money. By shopping for deals and planning your leisure time around them, you can save scads of cash on everything from food and amusement parks to airline tickets.

And whatever you do, keep tabs on your expenses. If you’re in the 42 percent of people who plan to use layaway to buy Christmas gifts, you may want to reconsider how you’re spending your money. (CNN:”Money”)

Remember the first rule of budgeting –

– don’t spend money you don’t have.


Now you know a little more about budgeting, but more important, you understand that while living comfortably has a lot to do with managing your money, creativity helps, too. With a little more forethought, you can alleviate financial stress and have more fun at the same time.

With the unemployment rate in the United States hanging close to the 10 percent mark at the end of 2010, up from 2008’s 7.4 percent, pinching pennies and sticking to a tight budget is as important as ever. Fifteen million people out of work is the sign of a struggling economy — and even when the economy is healthy, knowing how to manage your money is a valuable skill. (“Trading” -Economics)

You may know you can afford to go out to eat and hit the movies every now and then, but do you know how much you should be saving for retirement?

        • Do you even know how much money you spend on snack foods every month?
        • Could you be using a credit card that gives you cash back for every purchase?

An amazing array of high-tech tools exists to help us answer every one of those questions. They range from the complex software applications like Quicken that offer precise control of every transaction coming and going through our bank accounts, to simple resources like

Whether you need to craft a budget to plan for retirement or pick out a new credit card with a low interest rate, there’s a tool out there waiting to be used. We’ll start with powerful software that can take charge of your entire financial life, then move on to free Internet solutions that can also be incredibly useful.


A Budget For Today and Tomorrow

Updated June 2010

USE THIS WORKSHEET to get on top of your monthly living costs by projecting expenditures in various categories, and then comparing those projections to what you actually spend. First, enter your estimates in the Projected column. Print this page and keep it. Over the next month, record your expenditures in these categories in a small notebook, then re-enter both sets of numbers in the worksheet. The buttons will calculate the rest of the values for you. You may want to save this file on your own computer or simply bookmark the page to use over successive months.

[ See the links for the original copy of this worksheet online]


Take-home pay (Mom)

Take-home pay (Dad)

Other income

Projected          Actual          (+) or (-)

Mortgage / rent

Credit-card payments

Home-equity loans

Car loan(s)

Taxes not withheld from pay



Insurance Premiums






Savings / Investments

Vacation fund

Emergency fund

College fund

Additional Retirement (IRA, etc.)

Investment fund


Expenditures              Projected               Actual               (+) or (-)

Fuel and utilities




Water and sewer

Household operation


Automobile gas and repairs

Public Transportation





Pocket Money




Other variable expenditures

Food and beverages

Personal care (haircuts, etc.)

Recreation, entertainment

Medical / dental


Special expenses (tuition, alimony, etc.)



Fixed expenditures

Total expenditures

Income minus expenditures

Income minus expend. over 12 months



Read more:

Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: