The consumer society has led us to believe that we can have it all. If we can’t afford it, we can take out a loan or an overdraft to cover it. However, is this still a sensible way to continue to live in view of the worldwide economic recession? If you feel as if your spending is out of control or if you are worried about debts, it could be a good time to start controlling your money rather than allowing it to control you. Here are some ways in which you can do this.

First of all, make paying off your debts a priority. Decide on a proportion of your salary that you can afford to devote to paying off your debts each month and transfer that amount of money on pay day. Once you have paid off your debts, transfer the same amount to your savings account on pay day each month. That way, you will build up a financial safety net that will help you should you lose your job or if your working hours are reduced.

Secondly, fix monthly budgets for every area of your expenditure, from housing to personal care products. If you have no idea how much you spend in such areas as clothing, dining out, and entertainment, keep a spending diary for a month, noting down every purchase from a dollar for a newspaper to major purchases costing several hundred dollars or more.

When you review your spending diary at the end of the month, look for areas in which you could reduce your spending and take this into account when setting your monthly budgets for each area of spending.

Learn to distinguish between the things you need and the things you want by looking at each purchase in your spending diary and deciding whether it was something you needed or something that you wanted. You may be surprised at how many purchases are “wants” rather than “needs.” Make it your aim to reduce the number of “wants” by at least two or three each month.

However, try not to make your budgets too strict. If you do so, you may end up exceeding them easily and this may discourage you. It is a good idea to reduce your spending in each area gradually, so that once you have achieved some success in saving money, you are more motivated to save more.

Once you have set your monthly budgets, keep track of your spending in each area on a daily or weekly basis and try to ensure that you do not exceed your monthly budget. Sometimes an unforeseen expense will mean that you go over your budget. If this happens, try to make savings in other areas of your budget rather than dipping into your savings to cover the unforeseen expense.

Thirdly, do not forget to treat yourself. Even if you are on a very tight budget, it is still important to set aside a small amount of money each month to spend as you please on treats for yourself. If you don’t do this, sooner or later, you will feel deprived and may end up blowing your budget by buying an expensive treat for yourself.

In our society, there are many opportunities to spend money. If you say “yes” to too many opportunities, you will spend all of your money and will probably end up in debt. If you try to achieve a balance between paying off your debts or saving on the one hand and enjoying life moderately on the other hand, you will successfully manage your money and your life.