Top To-Do's to Keep Your Budget in Hand

Sometimes it can be pretty overwhelming trying to figure out how to get your finances in hand. One bit of advice says one thing, and another bit of advice says something else. But where do you start? Although the order of priorities might be different, here are some absolute must-do's if you and your family just cannot make ends meet every month, and credit debt and unpaid bills are threatening your financial stability.

The number one rule, plain and simple, is stop spending. Just stop. We've been taught for so long to spend our money that often we're not even aware of the money flowing through our fingers until the bill hits. How many times has your credit card statement taken you by surprise? Here are some good ways to become more conscious of where that hole in your wallet is, and good ways to plug it up.

Get rid of all plastic and swipeables. Do you think you cannot survive without a credit or debit card in your pocket? Put one credit card into your glove compartment for emergencies, and lock it up. Don't carry it with you into stores, or for shopping. You'll soon become acutely aware of when and where the urge to spend comes over you. Start avoiding those places to help you get a handle on your spending habit.

Next, move to a cash-only system. This will make you very aware of when you want to spend, and how much you spend. It will be a real eye-opener when you see how quickly cash can pass from your hands into someone else's wallet. And watching that cash pass into someone else's pocket can be a real incentive to stop spending.

Next, put limits on even necessity spending. Do you really think you must spend $500 each week on groceries? Open your fridge, and see how many of those groceries either got tossed out, or have not been used. Some estimates are that as much as 40% of what we buy eventually gets tossed. So place limits on what you'll spend on anything. The best way to do that, of course, is to make a budget-and that's the golden rule of money management.

Make a budget. Keep it simple. All you need to do is write down what your expenses are, and track them. Some experts recommend you put your spending into two groups, discretionary spending and fixed costs. Discretionary means spending that you could eliminate altogether such as renting DVDs or going out to dinner. Fixed costs are the ones you have to pay such as utilities and rent.

Most costs aren't really fixed-at least in the sense of how much it has to cost you. For example, if the rent is just too high, you may have to move to another neighborhood or smaller home. And there are plenty of ways to save on electricity and water costs that can produce really dramatic savings.

As you make more manageable money choices, take the amount you've dropped from your costs, and begin paying off your debts, generally the highest-interest debt first. Before you know it, you'll have your budget in hand.