07 January 2009

Tip of the Day January 7, 2009

A Simple Way to Avoid Budget Busters

Budget busters are those things that create debt and can cause a budget to spiral out of control with just the swipe of a card, literally a matter of seconds. Credit cards and the use of credit is the number one cause of budgetary failure. If you struggle to control spending then moving to a cash only budget is a simple way to keep control. The envelope system works. It may be old fashioned but it's easy to use, and being a physical system you are far more conscious of spending than you are when using cards (debit, credit or eftpos). Make a withdrawal of all the money you will need for the week, divide it up into the various envelopes (food, petrol, phone, lunch, entertainment etc) and when it's gone you have to wait until next week to spend from that envelope. A quick look in each envelope will let you know how you are going and remind you of your allocated spending amount.

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