HAVING a budget and living within it are two different things. There are always things that we want or need and credit is so easy to get.

HAVING a budget and living within it are two different things. There are always things that we want or need and credit is so easy to get.

First, determine why you want to budget. You need a good reason or you won't feel obligated to do what it takes.

Do you want to get out of and/or stay out of credit card debt, save for a new car or a holiday? Whatever it is, you need a reason so that you won't be enticed to overspend.

Write down your reason or goal where you see it every day.

Second, examine your spending. Are you tracking your expenses often enough? If you aren't looking at your expenses often, you probably have no idea how much money you have and where it is going. Spend a few minutes each day or at the end of the week updating your records instead of saving it all for the end of the month or the tax season.

Third, recognise why and where you are overspending. Look at your expenses and see where you've crossed the line. Did you have an unexpected medical, house or care expense? Does this happen frequently? Establishing some short-term savings can help cover these expenses when they occur.

Begin thinking of things in terms of what it costs you over a year. For example, the weekly ATM charges add up over a year so limit your withdrawals to twice a month or less and that's money in your pocket.

Ways to reduce mandatory and discretionary expenses:

l Check around for better car insurance rates;

l Switch off your geyser;

l Consolidate your credit card and other debt into a home loan and then cut up the cards;

l If renting, try to buy a house. Advantages for paying mortgage interest make it cheaper to own than to rent;

l Eat out less. Take your own lunch to work;

lRent a movie instead of going out to one;

l Consolidate errands to use less fuel;

l Limit grocery shopping to one day a week; shop at more than one store for bargains;

l Shop around for a better cell phone deal;

l Borrow books from the library instead of buying them.

Some people use a cash-based system called the "envelope method." After paying all the bills, the remaining cash is divided into envelopes marked food, fuel etc. Once the money in an envelope is gone, to make additional purchases, they shift money from another envelope or wait until they get paid. This really helps to develop discipline.

You may eventually find that there are no more places to cut and you need to increase your income. This doesn't necessarily mean getting a second job, although that is a possibility. Below are other ways to increase your money:

Save or invest wisely to obtain dividends. This is money that you don't have to work for because it is money working for you;

Acquire new skills that can help you get a promotion or even a new job;

Consider starting a home-based business. You may enjoy it enough to turn it into your next career.

Living within your budget is possible, but you must have a good reason to motivate yourself. Track your expenses often. Cut expenses and or increase your income if you need to. Decide to make changes and do them today.