Budgeting should be something that you do year round rather than just during a rough economic time. However, budgeting during economic downturns is much more difficult. Here are some tips on how to budget correctly:

1. Always plan for the worst case scenario such as someone losing their job. If possible, you should try to save at least 3 months worth of bills including rent or mortgage payments.

2. Cut frivolous spending like buying coffee from a cafe a few times a week or going out to eat. Instead, make your own coffee or get it from work. Simple as this may seem, these small cut backs add up in the long run. This can also encourage more bonding time between you and your family. Making dinner together can be a fun event.

3. Coupons, coupons, and more coupons! Clip coupons, pay attention to grocery store and department store advertisements, and stock up on items that are on sale that you use regularly. 

4. Contact your creditors if someone has lost their job and let them know about the situation you’re in. Sometimes they may be able to help by putting in place lower payment plans. The last thing you want to do now is to get into higher credit card debt. Always be aware of how your actions now affect your credit score. The last thing you want is to increase credit card debt or ruin your credit. Think long term.

5. Keep a journal or spreadsheet of what you are spending including food and all bills. Compare how you’re doing month over month. By doing this simple exercise, you’ll realize where all of your money goes and will make you more aware of your spending habits.

Click here to learn more about budgeting to save, and how to use credit cards wisely.