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Simple Budgeting Strategies to Help You Stay on Target All Year Long

Most people ring in the New Year with the best of intentions. They promise to pay down their debt, curb their spending, and start saving for the future. In some cases, they even write a detailed list of New Year's resolutions aimed at improving their financial fitness.

All too often, however, these same people revert to their old habits in a matter of weeks or even days. Why the lack of staying power? Most of the time, they don't have concrete strategies designed to help them achieve their financial goals.

Read on as we reveal eight simple budgeting strategies that can help you stay on target in 2010-and beyond.

1. Create a budget. We've said it before, but it bears repeating: Creating a written, detailed budget is one of the most important steps you can take to achieve your financial objectives. If you don't already have a detailed budget, make it priority to create one for 2010. All it takes to get started is an inexpensive pocket calculator and a portable journal. Or check out our online Budget Planner, which will allow you to crunch your numbers in just a few easy clicks. Be sure to include all of your monthly expenses, including housing, food, transportation, utilities, clothing, and entertainment, and don't forget to leave a small buffer to cover unexpected costs.

2. Pay yourself first. One of the best ways to save money is to pay yourself first. This means that before you spend any money, or even pay your bills, you'll set aside a certain amount of money for savings. Not only does this establish savings as a priority; it gives you a more realistic idea of how much disposable income you really have (all too often, people believe they can afford a certain lifestyle, but they haven't taken into account the amount they need to save). Ask your bank to establish an automatic transfer from your checking account to your savings account, and talk to your employer about setting up automatic monthly contributions to your retirement accounts.

3. Have a safety net. Given the current economic climate, it's more important than ever to save for a rainy day. This means creating an emergency savings fund that would cover six to nine months of living expenses in case you got laid off or were faced with a medical problem or unforeseen crisis. If you don't already have an emergency savings fund, be sure to create one in 2010 by opening a new savings account and making regular deposits. Don't worry if you can only afford to make small deposits at first-your money will add up over time. To test your financial preparedness, take our "Are You Prepared for a Financial Emergency?" quiz.

4. Pay with cash, not credit. Several studies have shown that shoppers who rely on credit cards usually don't know how much they've spent until their monthly statement arrives. But those who use cash are more aware of what they're spending and less likely to make hasty purchase decisions. In 2010, try to pay in cash whenever possible, and get a pre-paid credit card that you can use in case of emergencies. For more information, check out our complete Guide to Living Without Credit Cards.

5. Cut housing costs.. For most people, housing represents the largest part of their budget, but there are steps you can take to lower these costs. Talk to your bank to see if you can refinance your mortgage to a lower fixed rate, and shop around to make sure you're getting the best deal on homeowners insurance. If your home's value has decreased over the past few years, check with the tax assessor to see if you can get it revaluated. In some cases, you may find that even after these savings, your housing costs are too high. If so, you may want to consider moving to a more affordable home in a more inexpensive area. To determine how much house you can really afford, use our Home Financing Calculators.

6. Trim your utility bill. The average American family spends approximately 7 percent of its annual net income on household utilities, fuels, and public services. But fortunately, there are ways to economize, such as switching to compact fluorescent bulbs and buying a low-flow shower head. In addition, set your thermostat a few degrees lower in winter and a few degrees higher in summer, and consider investing in a programmable thermostat. To learn more about how you can save on utilities and help save the planet, check out How to Go Green and Save Money.

7. Save on health care. Medical costs are continuing to rise, but luckily, there are ways to save on health-related expenses without compromising the quality of your care. If you need a single-use prescription, always ask your doctor if he or she has samples; for longer-term therapy, request a generic prescription. Be sure to compare costs at various drugstores, and consider using mail-order pharmacies. In addition, contact your health insurance company to see if you qualify for free exams or screenings, such as blood-pressure tests, mammograms, or prostate specific antigen tests (PSAs). For more information, check out 10 Ways to Save on Health Care.

8. Stretch your supermarket dollar. To start saving on your groceries, create a detailed list before you go shopping, and stick to it. In addition, be sure to clip coupons, check the newspaper for deals, and compare items based on the unit price. Try generics instead of the brand name versions, and consider joining a bulk retailer, like Sam's Club or Costco. Although these warehouse clubs charge an annual fee, their canned goods, coffee, and condiments can be up to 50 percent cheaper.

Most important, stick with these strategies throughout the year, and continue to reassess and reexamine your budget to find new ways to save. For more tips and advice, visit our Money Management center.

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