The Math

The final step is subtracting your expenses from your income; the result should be a positive number. Provided that you have made an allowance for savings, the remaining income could be considered disposable income. If the result of your math was a negative number, you may need to look into credit counseling or other alternatives as a way to regain financial stability.

Savings Tips

While setting up a budget is a very important and necessary part of good financial planning, the key to maintaining financial stability lies in ones ability to save. Making an allowance for savings as part of your monthly budget is a good start. Aside from the traditional method of depositing money into a savings account, there are other ways a person can save money. By using the savings tips listed below, a person can save money on everything from utility and phone bills to traveling expenses and clothes.

Become Energy Efficient

• When purchasing new appliances, check the energy guide sticker. This is good way to approximate how much you will be paying to run the appliance according to usage.
• Replace all incandescent bulbs with florescent bulbs.
• Make sure you computer and monitor are turned off when not in use.
• Adjust the thermostat on your hot water heater.
• On mild summer days, open windows and use fans instead of running the air conditioner.
• Try to use the microwave or toaster oven whenever possible. This eliminates wasting electricity used in having to preheat the oven.
• Plug your television and other electronics into a power strip and keep it turned off when not in use.

Water Waste

• Take showers instead of baths.
• The toilet uses up to 5 gallons of water each flush. Don't use the toilet as an ashtray or wastebasket.
• Make sure to turn off all outside water faucets when not in use.
• Don't leave the water running while shaving or brushing your teeth.

Telephone Savings

• Instead of calling information, look up phone numbers either online or by using the phone book.
• Go over your phone bill and eliminate services which are not necessary.
• Compare rates of several long distance providers to get the best service and value.

Transportation and Travel

• Carpool or use public transportation whenever possible.
• Shop around to get the best insurance rates.
• Keep your car tuned and make sure the tires are properly inflated at the right pressure. This saves money on gas as well as repairs and maintenance.
• When traveling, make reservations yourself using online companies such as Expedia or Priceline instead of going through a travel agency. Also, you can save up to 40% on airline tickets by being flexible about what airline you travel on and departure and arrival times.

Food

• Invite friends over for a potluck dinner instead of dinning out.
• Take your lunch to work each day.
• Prevent impulse buying by making a list of what you need and avoid going to the supermarket when you're hungry.
• Plan meals for the week and only buy what you need.
• Make coffee at home each morning and take some in a thermos to avoid stopping at a convenience store or Starbucks.
• If you have a large family, shop at wholesale grocery stores and buy in bulk.
• Check the paper for coupons. Be careful to only use coupons for things you would normally buy and find out which stores honor coupons at double or even triple their value. Clothing and Entertainment:
• Buy out of season!!! Many retailers have clearance sales with savings up to 75%. Buy clothes for next summer in the fall and spring is the best time to buy winter clothes.
• Shop at outlet stores for great bargains on name brand quality clothing at almost half the price.
• Garage sales are often the best way to find good deals on children's clothes. Small children often outgrow their clothes before they wear them out.
• Go online, many retailers offer special sales on items purchased over the internet, you'll also save money on sales tax. Be sure to check on shipping rates, many companies offer free shipping throughout the year.
• Rent movies instead of going to the theater. If you prefer going to the theater, try to catch a matinee.
• Take advantage of the different media sources available at your local library.
• If you subscribe to any magazines or are a member of a video or book club, exchange videos, magazines, DVD's, CD's and book with friends and relatives.
• Go online to check out headlines from your favorite newspapers instead of buying them.