Making the perfect budget

Times can get tough. When that happens, you'll have to reduce spending. It requires a lot more work than that, though. Here are a few steps that you can take to make the perfect budget.

Track your spending Prior to setting up a budget, you'll need to track what you spend. For the first month, cut out any extra purchases; stick to your bills, food, clothing, and gas — the essentials. Figure out exactly how much you'll need each month for these things and create a list. Factor that money into your total earnings and see where you stand.

Evaluate Go over the list you've created. Are there any items that can be skipped? Can you give more money one month to a certain category over another? Are you making monthly payments for a service that you don't use often? How much money will you have for entertainment? The idea here is to cut as many corners as possible until you have the perfect amount of money budgeted to take care of you.

Use physical money In today's world, it's a little too easy to overspend. When you pay with a credit or debit card, you don't really think in exact figures. With cash, you have a little more of an idea exactly how much money you're spending, and whether that new item is really worth the high price you're paying. You'd be surprised at how much your buying habits change when you use cash instead of cards.

Coupon Between newspapers, magazines, and social media, coupons are everywhere! Dedicate a few hours a week to tracking down and cutting out coupons. Make use of reward programs at every store you shop. It might be boring, but in the end, you'll save a ton of money.

Create a safety net Reserve a little cash each month for savings. This bit of money will be your safety net. Should anything serious ever happen, you'll be able to use that money rather than destroying your budget. This will take a long time to build up depending on the amount of money you're able to kick back each month, so the sooner you're able to start saving, the better!

Live within your means The problem that most people face when dealing with a budget is that they don't live within their means. They want to live in a certain neighborhood or they need to have a certain car, but sometimes, it just doesn't work out. After creating your budget, if you're unhappy with the place you live or the car you drive, or any other aspect of your life, determine whether or not you can improve your living situation. Failure to plan ahead and live within your means will leave you without money and desperate to pay bills on time. If you find yourself in serious financial trouble and need legal advice, Follow Tim Broas on Twitter.

Creating a budget isn't too difficult. The challenging part is sticking to it. By planning ahead and living within your means, you should be able to live comfortably.