No matter how much debt you have, you don’t have to go broke when you’ve got a budget.

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If you’re tired of being poor a few days after payday, creating a budget and adjusting monthly expenses may be just what you need to free up money for clothes, vacations, savings and more.

Creating a budget doesn’t have to be boring and cutting expenses doesn’t have to be painful – not when the payoff means more money in your bank account because you know how to manage your income.

1. Choose your budget method

You can set up an online monthly budget with one of the many budget apps available. Or, if you’re old school, you can download a hard copy and pencil in the figures.

Careful, though. Don’t get so caught up in the assortment of budget bells and whistles that you spend your first month shopping for a budget template instead of hunkering down to create a budget.

2. Create a budget

Once you find a budget template, it’s time to weigh your monthly income against your monthly expenses. Then you can decide where all that money is going and where it needs to go.

Fill in how much you typically spend on utilities and other recurring monthly expenses. If your expenses go beyond your monthly income, don’t delete your new budget app and go back to your old ways just yet. It’s time to bring out the budgeting scalpel.

3. Get ruthless with recurring expenses

This is where you can deny yourself a few things you “want” but don’t “need” so you can free up cash for other things, like paying off credit card debt so your money will stretch further later.

For example, why pay for cable when you can subscribe to individual services such as Netflix, Hulu, Showtime, HBO and sports channels for less? Turn off lights in empty rooms, adjust your thermostats, ditch subscriptions and memberships to services you rarely use. Comparison shop for prescriptions.

4. Use the cash envelope system

You can avoid overspending on daily expenses by allocating a monthly or bi-weekly amount of cash in envelopes or using a digital envelope system with an app such as Mvelopes.

You’ll have to pay a small monthly fee for those digital envelope systems, and that’s one more expense you may not need. Besides, there is nothing like cold, hard cash leaving your fingertips to make you pay attention to every dollar spent.

Find out: How to Make a Cash Envelope System

5. Take your lunch to work

How much money would you save if you brought your lunch to work every day? Probably anywhere from $40 to $75 a week, or $160 to $240 a month. That frees up a lot of extra money.

Hate to eat at work? Drive to a nearby park and eat in your car under a shade tree. If you can’t bring lunch five days a week, compromise and bring lunch for three or four instead.

6. Cook most meals at home

The average American household spends around $3,000 a year dining out, but you can save big by preparing meals at home. Buy chicken or other meat cuts, boxes of pasta and canned or frozen veggies on sale. A rotisserie chicken from the grocery store can go a long way towards several meals.

Learn how to cook eggs, noodles, potatoes, rice, and fresh vegetables. Then look for recipes for simple meals online. Buy food on sale or at a discount grocer such as Aldi or Save-A-Lot.

7. Check your mail for coupons

Don’t relegate those coupons stuffing your mail slot and inbox to the trash without looking to see which ones you can use. There could be a buy-one-get-one-free dinner, grocery store coupons or rewards and discounts from grocery and pharmacy discount cards on your key ring.

8. Ask for that discount

There are tons of discounts out there for students, military service members and people over 55 years old. But discount opportunities don’t stop there.

Many insurance companies offer a discount for a good driving record or if you haven’t filed any homeowner’s claims. If you’re a member of a professional association, check its site for member discounts. Even cinema chains may have a discount day on movie tickets.

9. Don’t deprive yourself entirely

Treat yourself with a few carefully selected luxuries each month as a reward for budget sacrifices. Use a coupon to dine out with a friend. Go to a discounted movie. Buy clothes off the clearance rack.

Once you pay off debt and free up money in your monthly budget, you’ll have plenty of money to splurge later.

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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

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