Are you spending more money than you make? If so, then you're living above your needs. Maybe you don't know exactly how much you're spending. Try this! Make a list of everything you spend for one month. I mean everything; even if you spent 5 cents, write it down. After the month is over review the list. Look for patterns, look for items that you are spending money on that could be cut from your spending habits. Once you've reviewed your list, do a budget.
Start by determining exactly how much your monthly net income is. Then list all of your necessities first. Such as food, rent, mortgage, utilities, transportation, insurance, phone, clothes, savings, etc. If you find that your money is almost finished after the necessities, consider reducing your insurance and your phone bill. Do you really need that blackberry or iphone? Always ask what promotions your cell phone provider is having. There are always promotions. If you’re still strapped after reducing your insurance and phone bill, your rent or mortgage payments may be too high. If you’re renting you may want to consider getting a roommate or moving to a smaller place. If you own your home, contact your bank to ask what options they have to lower your mortgage payments.
Once you've taken care of your necessities, look at your wants such as cable, spas, going to the hairdresser, shopping, movies, trips, etc. Determine how much money you can afford to spend on these wants before you actually start spending.
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