Debt Consolidation

A Practical Guide To Budgeting During Recession

Budgeting during recession is crucial. Though budgeting is something you should always do to keep your finances under control, it becomes more important while you are going through a difficult period of recession. You do not have to be scared or feel frustrated. You have to keep your approach positive. Instead of panicking about the situation, you should take it as your opportunity to be more disciplined with your finances. This is the time when impulse buying or unnecessary purchases must be avoided at all costs. Such things will only things much worse for you. You may also consider stopping the use of credit cards. Lock your cards at a safe place and then forget about it. Rely on cash purchases, as it will keep reminding you about your actual financial position. You will this way have a better idea about how much you can afford to spend and where. Following is a brief practical guide on how to go about it.

Review Your Bank Statements

When it comes to budgeting during recession, the first thing you have to do is to review your bank statements of the last three months. A thorough review of the information on your statements will give you a practical idea on where you are spending your hard earned money and how much. You will be able to identify the problem areas to work on. It will help you come up with some practical cost cutting ideas, which you must implement thoroughly. Creating ideas is not a difficult task; what is difficult is to implement the same.

Review Purchase Receipts

First of all, you must have the habit of keeping all purchase receipts in a file, as you may need them in future. Here, as a second step, you have to open that file and review all those purchase receipts, at least from the past six months. The purpose is to identify the expenses where you can impose certain reduction or complete elimination. For example, this is probably the time to eliminate all those costly (not so necessary) driving trips. You may also consider reducing the frequency expensive restaurants visits. This is the time to cook and enjoy food at home with your family members.

Prepare A List Of Regular Monthly Bills

An important step of budgeting during recession is to prepare a list of all your regular monthly bills in their order of importance. For example, the three most important bills may include home rent or mortgage, water, and electricity bills. Insurance and car payments come next, but they are also important. You need to make sure that you save enough money to pay off these bills and save enough not only for other monthly expenses but also for future (in your emergency fund).

Make The Best Use Of Coupons

Coupons are always available for you even during a period of recession. Therefore, if you are planning a budget, you must try to make the best use of those coupons. You can find the same in local newspapers, in flyers, and in stores. Study those coupons thoroughly and then prepare a weekly grocery list accordingly, in a way that allows you to make the maximum use of those coupons, but in a very practical way; it is not wise to include something in your purchase your list that you do not actually need but are still adding because you want to use the coupons.

Last, but not the least, you must do a thorough monitoring while you are budgeting during recession. This way, you will have a fair idea on whether you are moving in the right direction. It will help you identify the problem areas where you need to improve.

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Posted in Budgeting, Debt Consolidation | 1 Comment »

One Response to “A Practical Guide To Budgeting During Recession”

  1. Joseph says:

    A wonderful article on the strategy to be adopted in personal finances during the downfall of the market. Rather being disappointed you should be more aggressive and watch all the movements in the market carefully. You will definitely go through the recession if you keep an optimistic approach. It will be right time for you to manage your finances in a better way and just make sure that you should keep a close eye on your expenses and spending. Make a habit to purchase in cash rather than using credit options. It is always advisable to make a financial plan during the downfall of the market. Simply analyze your income statements and see the loopholes where you can save your money. This will reduce your burden a bit . If you keep the track of all your back spending you can easily make a plan of cost cutting by avoiding unnecessary expenses. Another one most important thing is to make a good economic plan is to make a list of your regular monthly bills priority wise. The most important should come on the top of the queue. Your monthly plan should make enough arrangements to pay these bill in time.

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