Creating a Frugal Budget

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The word budget refers to a plan that gives us a clear picture of how our hard-earned money will be spent. It is usually up to us on how to use money the way we think it will be used wisely. Budgeting is not depriving ourselves of everything expensive or pleasurable. It is planning for the future, then living in the present.

A well thought-out budget can help you reach your financial dreams to spend less, pay off debt, and save more. Learn how to make your own budget that accentuates frugal living with these ways.

1. Evaluate Your Monthly Expenses

List down all your regular monthly expenses, including those you used to spend on fun things like eating out, entertainment, and hobbies, and minimum expenses that you need to make toward your debts. You can use a budget form for this purpose if it makes the work convenient.

2. Total Your Earnings

Compute the amount of you bring home after taxes and other paycheck deductions each month; also include any money that you earn from investments and other forms of residual income.

3. Subtract Expenses from Earnings

Check the effectiveness of your current spending habits by subtracting your monthly expenses from your earnings. This will help you know the amount you can expect to have left at the end of the month.

4. Rework Your Budget

If your budget resulted negative, you can work it out again until your numbers crunch. To do this, take a look back at each expense you have and find places to make cuts.

5. Budget Money for Debt Reduction

Your budget should already include the minimum payments that you have to produce every month, especially if you have some debts. You will need to look for the money to settle those debts. Check your numbers again and decide where you want to make some sacrifices in order to completely get rid of debt.

6. Allocate Money for Savings and Investments

This time you should make some budget allocation for your financial goals. You can make a list of what you want to achieve. Then check your budget once more to find the source of the money that you need to reach those goals. However, if you got so much debt, you may need to skip this part, and that is completely alright because you must prioritize your debt.

7. Follow Your Budget

Once you have carefully made a budget that includes all of your monthly expenses and financial goals, it is time to let it serve its purpose and see its effectiveness. Try to live following your budget and observe how it feels.

8. Evaluate Your Budget

At the end of each month, look over your expenses to check if they match up to your budget. If they don’t, assess if you need to make some adjustments to strictly comply with your spending plan or if you need to reform your budget to reflect your actual expenses.

9. Make Regular Budget Assessment

A frugal budget needs to be evaluated regularly. Continue looking back over your budget every month in order to see if there are some cases of overspending. Crunch the numbers again, if you need to, until you make it right.


In order to be successful towards your budget, one major requirement is that you need to be honest about spending habits. This can help you come up with a much more realistic budget. Always take in mind that your budget is not about complete deprivation, rather it is about living in a smart way.

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