How to Cut a Budget in a Tough Economy

To be able to make cuts in your budget first you need to know your full income & expenses. You also need to know where your finances are leaking money so record keeping is an important place to begin.


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    Keep a record of all your expenses as you go through the month. These are your small expenses like a daily newspaper - the purchase of a cup of coffee before work and go through your list of annual expenses. You will be surprised where you can cut spending because you probably don't know how much of your money leaks out of your life unnoticed!
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    Break down your expenses over the year into payments that are annual payments quarterly - monthly - fortnightly & weekly payments. Things like insurances - phone bills - utility bills etc.
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    Once you know where your money is going (expenses) you have some idea what you can actually live without but first work out all you income from all sources like income from work done - sales from eBay and any other income you receive.
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    This is now your list of INCOME vs EXPENSES. If you have more going out than you have coming in you need to make cuts to get level or get ahead. Decide here what lifestyle choices you can live without like say buying your lunch when you are at work or out shopping. Pack a lunch or snacks from home & some good advice is to make them healthy choices. Bad food choices are probably less expensive than fresh foods but you will reap benefits in other ways - like medical expenses chasing ailments brought on by foods that are not nourishing . Make small changes first of all & see how you cope.
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    Look carefully at the things you are going to cut from your budget & keep in mind if you make a budget too sever you probably won't be successful sticking to it for very long at all. Build in some "rewards" regularly so you don't feel disadvantaged. Instead of having donuts with bought coffee every time, instead it to an occasional reward. Give up the daily bought coffee & make it every second day you buy coffee instead. There are lots of little things you can do everyday & still have a fulfilling week/life.


  • Make purchases "mindfully". Keeping a record of your daily "treats" will show you how much money leaks from your life. Instead maybe use half for a lasting reward & use the other half to pay off some debts like making a little bigger payment on your credit card bill or divert the extra money into saving for a day out you would like to enjoy instead.
  • Ask if you really "need" that impulse buy or is it that you just "want" it. If you don't "really" need it keep your money for now & decide later if you "have to have it" By catching yourself at impulse buying maybe it is something you can actually live without & use the money in a more enjoyable way when you have accumulated a little extra over time & buy yourself a more valuable "gift" you want more that you may not be able to buy if you spend on all the trivia you don't "really need" Watch the cents & the dollars will look after themselves!
  • When grocery shopping make a list of the goods you need to get through the week & shop only for the things on that lost. Check your cupboards to make the list from what is missing of the things you buy regularly like coffee. Coffee is usually expensive so wait until it is discounted & buy two then. The money you save on each container of coffee can go to something else on your expenses list like reducing DEBT.


  • Don't be a "scrooge" to yourself or your loved ones. Just know what is important & what really you can live without - like cutting back on junk foods that will only make you crave more junk before you know it.
  • Make gifts to give others if you have a hobby - like for me it would be making bead & wire jewelry for gifts. You learn a craft you think you might like through the year & make things you can give as birthday gifts. For men this might be small woodwork projects & maybe for girls you could easily string a lovely bracelet on on stretch cord someone will love to be give.
  • Work your budget so you can move towards having more coming in than you have to find to go out.
  • Teach a class. You would be surprised what you know that others want to learn. Get paid to pass your knowledge on.

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Categories: Budgeting