Besides making our lives hell, recession taught us many things! We came across many new terms - processes and lifestyles of most of the people got changed for ever. Budgeting suddenly became an effective tool and many people who were renting a lavish lifestyle clinged to frugality. Millions of frugal moms and dads emerged, so did numerous frugal blogs. Everybody started saving dollars and living within their means. However, doing this means two things - consistently.
Live On Your Net, Not Your Gross
Plan your monthly budget based on the amount you take home each month and not what your gross pay is since a good portion of your gross pay is pulled out by your employer each month for taxes, social security, health insurance etc. If you are preparing a budget based on your gross pay-check, you are simply putting your family and yourself in danger. So it's wise to plan with the money that gets credited in your bank a/c each month.
Pay Yourself First
Before you pay any heed to the expenses, subtract the savings from the amount you have in your hand. Try to save at least 10% of the amount if possible. Focus on this more if you don't have any emergency fund.
Try to spend the rest with prudence. Prioritize your expenses. Give priority to your house rent, electricity bills, kids' education fees, utility etc. You can of course keep the leftover for entertainment and other purchases that depreciate in value over time.
And If You Hit a wall?
Consider earning some more. Though might sound impossible, many people do this nowadays. Maximize your earning capabilities by using your talents. Whether it is working at the local coffee shop or freelancing for others, the money that'd inflow in the end of the month would give you enough mental satisfaction and moreover, the required financial security.
On the other hand you can cut back on expenses. You may realize that after paying for all your taxes and other necessary expenses you have no money to afford the best cable channels, unlimited texting plans, or your hefty car payment. Here a simple trick could save you the misfortune. Can your cable tv provider. They might offer you a good discount if you threaten to cancel the subscription or scale down. You can do the same thing with your cell phone company, internet services, insurance, even your electric. If you are living in a state where electric prices are not regulated, you can of course go for the cheapest one. After all these you can obviously think about a drastic change in lifestyle. Instead of frequent dining outside with your family or girlfriend, you can do that at home. You can also trade your car and get a relatively cheaper model.
Finally, live your own life. Don't compare what you have or your lifestyle to others. That's definitely going to stale your life. Having a healthy financial life means living within your means and not how your neighbors or friends live.