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by WikiHow


1) Create a list of essentials. This includes things such as groceries, utilities, and clothing.

2) Estimate your income. This will probably work best if you use a monthly income. If you are on salary, this is usually pretty easy. However, if you are part-time, unemployed, or a dependent, this may be a bit more difficult. Most likely, your best route is to take your monthly income or budget for the last three months and take an average. While this may not be spot on, it will likely be close enough for you to rely on to make ends meet.

3) Record all of your expenditures. To do this, record what you bought, how much you spent, and where you bought your goods/services from. This does not have to be extremely detailed. “$100 on groceries at Wal-Mart” will suffice. Once again, this will probably be best from a monthly standpoint.

4) Compare your income to your expenditures. See how you fare. If you are significantly in the green, then you’re doing fine! If not, proceed to step 5.

5) Evaluate your expenditures. See where your money is going! Start by categorizing your purchases. Make “Essentials” one category. The rest of the categories will be unique to your preferences. For example, one category might be “Eating Out”. Once you have done this, add up all the purchases in that category and create a category total.

6) Cut the fat. More than likely, you’ll notice at least one category other than “Essentials” that seems to be eating a large portion of your income. Take a look at that category. See what you can cut out. For example, if you are seeing nine or ten trips to Starbucks under “Eating Out”, try cutting this down to three or four. That could be a quick $25 right there. Continue to cut at the non-necessities until your income equates with your expenditures.


  • Don’t go overboard with the cutting. You work hard, and you’re entitled to treat yourself too. If you don’t treat yourself every now and then, you’ll find it harder to keep on your budget.
  • If you are able to cut your expenditures significantly, use the surplus to save for a rainy day.

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