Budgeting & Decision Making – Maintaining A Healthy Financial Life

By: Jeremy Biberdorf

April 25, 2012



Setting financial goals can help you achieve the dream of living a debt free and stress free life. If you would really want to stop living paycheck to paycheck, you will have to think and plan wisely. You will not simply be required to think more seriously about budgeting but also about newer strategies that may help you lead a debt free life.


Debt free life perhaps is more of a relative term. How much of debt is actually considered to be bad and stressful debt? Depending on the affordability and the financial situation of a person, the amount is supposed to vary. It also depends on the credit rating of the person.


Jason Cabler from Celebrating Financial Freedom says “Once you make the effort to get your mind and thought processes moving in the right direction, you have to decide you’re done struggling financially. It’s time to decide you’re going to change your financial situation no matter what it takes.”


Taking The Right Decisions And Budgeting


So that you can take the right decision towards saving money and securing your financial future, it is important for you to be aware of all of the details of savings, investments, the financial stability of the place you are in and the terms of your affordability. In addition, it can also prove to be beneficial if you can discuss the financial strategies to be followed; with a financial expert.


However, while going to a financial expert for gaining the required financial knowledge, you will have to make sure that this person offers authentic help. In the process of taking the right financial decisions with the help of a financial expert, it is not at all commendable to fall prey to a scam.


The other right decisions that you may be required to take are:


1. Devise your own frugal ways – Frugal living has now become one of the most popular ways through which you can lower the level of your expenditure. But again, there are some people who are so much so obsessed with being frugal that they actually over-do it. Thus, if you are thinking of practicing frugal budget and living, try to devise your own strategies that are tailored to your needs – so that you don’t overdo this and become either a mean miser or a show off simply trying out the most in-thing (frugality).


2. Try out couponing – Couponing is an important strategy that helps in lowering the amount you spend mostly on grocery. Couponing helps you buy the same thing of same amount for less the price. However, overdoing this can also lead to over-expenditure.


3. Take inventory and analyze at the end – It is important for you to take inventory of your actual income and the expenditure that you make. Depending on this, you will be required to analyze if you are actually spending money as per your affordability.



4. Try to boost income and cut down expenditures – If required, you should try to boost the income and also bring down the expenditure as much as possible. This is going to help you not only to pay down the debts you have, but also to save more for a secure future.


5. Keep an eye on balance transfer offers and refinance offers – Check your email on a regular basis to find if there are any good balance transfer offers and refinance offers. If there are any such good offers and if you have too many credit cards, and a mortgage with high interest rate, take the necessary action. Refinance and consolidate to save money on debt payments, this also helps to render the debt pay off process a new zing – as a result you may be able to pay it off faster.


So, these are the different things that you are required to follow in order to take the right decision towards budgeting and living a debt free life. In this process, you may not only be able to free yourself of the debts but also become a disciplined person with a different and more stable outlook towards your personal finance. Start budgeting and have a healthy financial life now!


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About the Author:

Jeremy Biberdorf is the founder of Modest Money. After working many years in the website marketing industry, he decided to take on blogging full time and also get his finances headed in the right direction. Also check out his contributions to Equities.com and Benzinga.

49 thoughts on “Budgeting & Decision Making – Maintaining A Healthy Financial Life”

  1. Avatar

    I think another way is keep projecting future spending. Sometimes you have big expenses (ie, car insurance, property taxes, utilties, etc.) that is out of your monthly expenses. You have to be able to project when these money will be paid to ensure that you have your cashflow. Then its not a big surprise when it comes time to pay.

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      Yeah I have a bunch of bills that are automatically withdrawn. So I always have to keep a buffer in my account to cover these things. It’s never a surprise when they come out, but you do have to keep them in mind.

  2. Avatar

    Definitely agree with boosting income. It’s all about the side hustles! We bring in about $200-300/mo in side business money, and have brought in as much as $600 in a month working very part-time and mostly from the comfort of our home.

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      Yes the side income can be awesome. The only problem is that it can sometimes put you into a higher tax bracket. Ideally that strategy is also combined with other techniques like reducing expenses. When I first started making money online I didn’t keep in mind that I had to pay taxes on all that money and it came back to haunt me.

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      You can only cut expenses so much and stay happy. In that case increasing income really is the best option. Too many people rely on their daytime job for that increased income though. Meanwhile their bosses are in no rush to spend more money. So you usually have to find ways to make more money outside of your daytime job.

  3. Avatar

    Do not forget to live your life when you’re heading towards frugal ways. Side hustles certainly help as well with income but most importantly is to always keep your marketable skills sharp as they are the key to higher income.

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      For sure. That is actually part of why I started this blog. Marketing a blog and using social media has become a major part of website marketing work. So to remain employable I had to pick up those new skills. In my case it might not increase my income much, but it sure helps in getting a job.

  4. Avatar

    Good tips Pablo. I couldn’t agree more with No. 1 – that some people take this to the extreme. I purposely build a small float into my budget just so I won’t be surprised when we exceed it.

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      For some people those extreme measures may be quite necessary to get themselves out of a hole. You just have to make sure that it doesn’t waste too much time and limit your happiness too much.

  5. Avatar

    These are great tips and definitely the guidelines that I follow when coaching clients. While some of the people visiting this blog probably do a good job of limiting their spending, it’s still a HUGE issue for the majority of Americans.

    Most people would prefer to increase income as opposed to cutting things out of their life, but most of the time it needs to be a combination of both. If you’re always focused on increasing income then that requires time…the more time you give up the less you have to live and enjoy life.

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      Great point about using a combination of strategies. That is what will truly get you to your financial goals quicker. People are generally hesitant to change their ways though. They don’t want to accept that they are wasting money in their daily spending and like to insist that it is all worthwhile.

  6. Avatar

    These are great strategies for making an educated decision towards budgeting and living a debt free life. Boosting income and chopping down expenses is probably the most important of all of them. In the long run, your earnings will ultimately determine how much you’ll be able to save and enjoy. Most of us either don’t like the idea of strict budgeting, or are just dog tired of having to do it so often.

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      I admit that I’m one of those people that is wary of taking on strict budgeting. I do limit my expenses as much as possible, but the idea of keeping a recorded budget is tough for me to take on. Part of me doesn’t want to waste time, but maybe I also don’t want to think about how much of my budget is being taken up by certain expenses.

  7. Avatar

    I agree with SleepyDad. Projecting what future expenses will be is a great way to budget for the present. Obviously there are always going to be surprises but if you can plan for them you will be in much better shape when they happen.

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      If only we could plan for surprises. That’s where a healthy emergency fund comes in handy. I try to keep at least a bit of wiggle room in my cash flow for that kind of stuff.

  8. Avatar
    From Shopping to Saving

    I do all of these already but one thing I need to get into the habit of doing is couponing! I always use coupons and promos online, but when I go to the grocery store, I could be saving a ton!

    1. Avatar

      It is tough to get in the habit of using coupons if you haven’t been doing it before. It’s just automatic to just head to the grocery store when you need something. It takes a change in routine to first check for coupons or have them all organized ahead of time.

    1. Avatar

      Nope no money at all. I don’t accept any paid guest posts or any paid text links. I’ve seen the risk that carries and I’d rather think long term.

      Nelson do you say that just because of the nature of the link included? I do normally decline all guest posts where they are linking to a commercial website. In this case he agreed to just include a single link, which is nofollow. Since I’ve been quite busy with job interviews and freelance work, I figured I benefited just as much by the free content. Besides how much is someone really going to pay for a guest post on a PR0 site, especially when the link is nofollow. I’d think that would be a pretty tough sell.

      1. Avatar

        I wasn’t going to comment, but I think where Nelson’s headed was here:

        “Frugal living has now become one of the most popular ways through which you can lower the level of your expenditure.” I’m not sure what the other ways would be.

        I agree with Financial Uproar. I love your blog but “it is not at all commendable to fall prey to a scam.” made me laugh out loud and share with the guy sitting next to me.

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          Fair enough. I do agree that some of the writing is a bit awkward and perhaps English is a second language to the writer. I think people would be pretty understanding that this is on the writer themselves and not me though. Hopefully nobody is judging me by accepting this kind of guest post. As much as I’d like to only accept top notch quality writing, the simple fact is that different writers have varying levels of quality.

          Out of curiosity, how would you respond if a guest writer submits something that is not up to your standards?

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              I may add a disclaimer like that too. In this case though it seems that people think I should have rejected the article altogether. I guess I’m just too nice sometimes. It’s good to hear people’s feedback on this though.

  9. Avatar

    I like #4. It’s important to cut costs but you can only cut so much, sometimes increasing your income is the best option.

    1. Avatar

      There is a lot more potential to increase income, but I think it depends on a person’s circumstances. Some people are stuck making a certain wage and can’t do a whole lot about it. They can try to make extra money on the side, but that isn’t always possible too.

  10. Avatar

    I am really trying to get started couponing. I cut some out. Now I just have to remember to use them. I’m amazed at people who have binders and price lists etc..

    1. Avatar

      I think most of the people who go hardcore with binders and lists must be American. There seems to be a much greater opportunity for coupons down there. Apparently their Sunday newspapers are full of them. Here in Canada, you really have to seek out the coupons.

  11. Avatar

    I think the most important point you make here is that you should “devise your own frugal ways”. That’s because each money saving choice has a cost associated with it.

    While one person would rather go without food or water as long as they get their cable tv (or whatever it is), another person would give up tv to save money.

    It all depends on what you’re willing to do to get your budget in order.

    1. Avatar

      Yes it’s all a personal choice. It’s rarely black and white where one set of rules suits everyone’s personal situation. You have to do what suits your own priorities and what will keep you happy. Saving money is important, but not at the expense of your happiness and mental well being.

  12. Avatar
    Karunesh @ chase-a-dream.com

    What is my frugal way –

    The best way for me to save money is that I delay buying. Before I buy anything I ask myself do I need it right now or can this thing be delayed. If the answer is not yes then I will not buy it.

    This habit has saved me a lot of money but about 5-6 years ago I used to buy things in a rush. I would want something then I would not think anything else. I learned from my uncle, who is a businessman that he would not invest on something till its urgently required.

    1. Avatar

      Good point Karunesh. Impulse purchases can add up to a lot of money and most of the time we don’t truly need those things. By giving ourselves time to rationally weigh the pros and cons of making that purchase, we can avoid the purchases that are just a waste of money.

  13. Avatar

    Like Jason said, the combination of lowering your spending and increasing your income is the easiest. I am a big fan of what you said about not over doing it with being frugal. You do have to find ways of cutting your spending that can become second nature to you if you want the habit to stick. I have tried the extreme coupon thing because I know so many people who really save some big money doing it, however, it is too much for me so I just use a few coupons here and there and still save quite a bit.

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      For some people extreme couponing just takes up too much time. This is especially true for people who have side hustles to make money outside of their daytime job. Usually it is better to put your time into something like that instead. Still, you can take advantage of some coupons without going all extreme with some big binder.

  14. Avatar
    TB at BlueCollarWorkman

    Couponing is a great idea. My wife does that for us, but only for restaurants. So when we get to go out one night every couple months without the kids, we always pick from the restaurants that we have coupons for. We save money, we get out for a night, and we often get to try new places!

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      Restaurants is an area that I try to use coupons for too. When there are so many good restaurants, it’s easy enough to choose one that has a coupon. That can usually produce a decent savings on a meal.

  15. Avatar
    Miss T @ Prairie Eco-Thrifter

    These are great strategies. When it comes to being frugal, we have made a lot of progress with this. We meal plan and cook at home, we grow a garden so we can buy less at the store, we make our own cleaning products, and we exercise at home instead of at a gym. Little things like this add up over time.

    1. Avatar

      All very good ways to save money. For most people, food is one area that you can easily save a lot of money. People generally waste a lot of money on having food go bad before they use it or by making food choices without prices in mind. I exercise at home too. I’m just not interested in paying a monthly gym fee when I could instead lift weights at home and do some cardio outdoors.

  16. Avatar

    I’m definitely in the “make more income” camp versus living frugally or reducing expenses. Of course all these steps combined can greatly increase your chances of becoming wealthy. But I believe our income has the most potential to help us live the life we want!

    1. Avatar

      I’ve always concentrated more on making more money instead of saving money. Lately though I’ve realized that sometimes it is much less work to cut back on expenses than doing extra work. So if you can do well in both areas, you’ll come out much further ahead.

  17. Avatar
    Shannon - ReadyForZero

    Great article! I especially like the fact that you mention the need to tailor your budget to fit your needs. Budgeting is not one size fits all and the attempt to make it so gets some people in trouble! Everyone has a unique financial situation and has to do what make sense for their life. Thanks for posting this!

    1. Avatar

      Only you personally know how your blog should look. A professional could tell you what an ideal budget might look like, but you have to make it work for yourself. You know what you feel you need in your life.

  18. Avatar

    One of the best things I have done to cut expenses is cut out cable. I haven’t had cable for 6 months and haven’t missed it at all. I put up an antenna and am very content with local channels. I was paying $80 a month for cable.

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      Yes cable is quite expensive. I feel a little guilty sticking with cable primarily just for sports. If it wasn’t for my love of sports, I’d definitely drop that expense. If only you could just pay for 3 or 4 channels and cut the rest of the fluff.

  19. Avatar

    Good point about making the budget fit your lifestyle. You are more likely to stick with a budget if it doesn’t drastically alter your lifestyle. It’s all about setting priorities and it can be different for everyone.

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      Yep there’s not much point in making a budget if you can’t actually stick with it. So it really needs to fit your personal lifestyle and not just based on someone else’s mold.

  20. Avatar
    Thad P @ thadthoughts.com

    About once a quarter I take a look at things we have subscribed to. Subscriptions are great, but just because we felt something was needed or enjoyable 18 months ago, doesn’t mean it is still needed or enjoyable.

    1. Avatar

      Good point about subscriptions. Some people just automatically renew them, but regardless what the subscription is, you should take some time to decide if you still truly want or need it.

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