It's a good idea to have a budget, even if it's an informal one. Most of us do pretty well with the fixed-cost part of the budget. Fixed costs are those costs that stay the same each month...rent, cable, gym membership, cell bill, car payment, the monthly EHarmony bill you signed up for and can't get out of, etc. You know that you are going to have to pay that amount each month, so you plan for it and cough it up regularly.
Your variable costs are harder to nail down, and those are the ones that can really blow your budget. A big month of eating out, buying a wedding present, replacing a muffler, or paying property tax, and your variable $$ are gone .. .and then some.
How can you create and follow a budget that is useful with regard to variable costs?
Bang for the Buck
You’re pretty much committed to your rent, but you’ve got leeway in what you do with other funds in a month. If you really enjoy that Starbucks every morning, it’s probably ok to get it. The first sip, and the 30 sips after that one, make you feel good – and feeling good is one of the key reasons we earn and spend money. However, other things you choose to spend on may be born more out of habit than of pleasure. You might actually prefer bringing your lunch from home rather than eating yet another dejected hamburger from the work cafeteria, thereby reducing a variable expense. Evaluate purchases and make sure they give you pleasure commensurate with what you’re spending.
Putting on Your Thinking Cap
One of the secrets to staying slim is to be mindful about what you eat. You are supposed to ask yourself if you really want that bag of M&Ms or if an apple would be just as satisfying. (Yes, I do; no, it wouldn’t.) You can try to whittle your expenses the same way. Before you buy something, think about whether you really want or need it. Sometimes the act of pausing to think is enough to keep you from swiping your credit card.
Timing is Everything