Budgeting During the Time of Recession: How to do it

Recession is a tough time and you need to restructure your budget accordingly to survive it. Steadying the financial situation of your family is of paramount importance and only a sensible budget can help you do that. So, for protecting your family from the detriments of recession, you have to adopt certain measures which include the following:

1) Pay off all your debts, particularly credit card debts and car loans

2) Create an emergency fund which is tantamount to six months of your livelihood expenditures

3) Accumulate savings for retirement

During adverse financial periods, it is always essential to curb unnecessary and impulse buying. Saving money and increasing your bank balance to a reasonable extent is always a wise decision. Given below are certain interesting steps that you can follow to budget during recession:

Step #1 Go through your bank statements

Get all your bank statements from the past three months together and go through them carefully. This will help you find out the areas where you are spending too much and where you need to restrict your spending.

Step #2 Evaluate all your receipts and bills

Collect all your receipts and bills for the last six months and see where you are spending excessively on a regular basis. Check whether you are eating out too much or taking out your car needlessly, even for a short distance.

Step #3 Prioritize your expenses and bills

You need to prioritize your bills if you want to create a sensible budget and use it for your own benefit. Your mortgage loan payment, utility bill payment, automobile loan payment and payment for insurance premium are the four most important payments that you should do as a priority. See whether raising your insurance deductible lowers your insurance premium.

Step #4 Always look for discounts and offers

No matter in which area you stay, discounts and offers are available from shops and grocery stores. If you can avail these discounts, you can certainly save a lot of money. Look for coupons offered by flyers and newspapers and make use of them as much as you can. Grocery expenses eat up a considerable portion of your income every month and this measure will help you lower it reasonably.

Step #5 Search for deals at throwaway prices

During recession, your target should be to search for outstanding offers and deals available at open-air markets and thriftshops in your neighborhood. You can get the items of your choice in these marketplaces at unbelievable prices though the condition of these goods may not live up to your expectations.

Step #6 Revoke some of your club memberships and credit cards

If you are a member of a number of clubs, then you can easily cancel some of these memberships to get yourself back on the right track. If you don’t need too many credit cards, then it is always a good idea to surrender, destroy, or lock some of them and keep only one for emergencies.

You can use a financial widget to monitor your expenses. Many such widgets are available online. This will help you know how to do something the cheapest or easiest way. Maintain a diary to list your expenses all the time. Evaluate them from time to time.

Author bio: Sam Payn loves to blog on a variety of topics. He mostly focuses on budgeting and personal finance tips.

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