DC Budget Tips

In order to avoid needing debt consolidation or falling into the kind of trouble that may lead to a Washington DC debt consolidation a second or third time (don't laugh, many people do), setting up a budget that allows you to track your living expenses and manage your money is important. Living on a written budget is a trick that most self-made millionaires use, because when you have limited means you may not realize just how much money is lost or wasted every month on "little things" like eating out or ATM withdrawals and fees. Here are some tips for setting up and using an effective budget to better control your income and spending:

• Track every expense: A beginner mistake when setting up a budget for the first time is to not track absolutely every expense. This is a mistake on several levels because leaving out small things you feel are inconsequential is not going to show you the truth of just how much those small things add up to every month. In addition, if your budget is going to be tight, even a few dollars here and there can mean the difference between a balanced budget and a budget deficit - the latter being a term very familiar in Washington DC.
• Shave expenses: Wherever you can, you should cut back on expenses that can save you money. In Washington DC, for example, taking your lunch break at McDonald's on a regular basis can easily cost you $7.00 for a single meal and drink. Did you know that the cost of the average homemade chicken or ham sandwich with cheese and lettuce is about $.70 cents? Two of those, plus a $.75 cent bag of chips and a $.75 cent bottle of water bought from the grocery store the next time you shop is only $2.20. Doing that instead of McDonald's even 2x per week will save you more than $35 over the course of a single month, more than nearly $400 per year. For many, that is a car insurance premium or the beginnings of a vacation.
• Use software: There are plenty of free programs available online that will help you to budget your money and expenses every month. Some of them will even interact electronically with your online banking to better track the flow of income and outgo.
• Try to pay cash: It's a simple fact that most people aren't aware of - American's spend more when they spend with plastic than they do if they are spending cold, hard cash. It's true! Imagine being at McDonald's for your $7.00 lunch. Which is easier, pulling out a piece of plastic and just handing it to the cashier, or giving them a $10.00 bill out of which you will receive $3.00 in return? Seeing your money literally disappear before your eyes has a psychological effect that leads to savings so, if possible, carry more cash around rather than using your credit or debit card to pay for everything, you just might find your expenses cutting back all by themselves.