Plugging the leaks in your budget

Dear Dave,

We started doing a budget a couple of months ago, and already it’s springing leaks. It’s just a little bit out of balance in a few different places, but combined, it makes a big dent in our finances. How can we plug the leaks?

Joy

Dear Joy,

First, don’t worry about it. This kind of thing happens a lot in household budgeting, especially when folks are new to the process. Here are some ideas to help stretch your dollars and plug those leaks.

Use the cash-only method when shopping for groceries. Take cash only for the amount you’ve budgeted for groceries. Use coupons only for items you normally buy. Lots of people use coupons just to be using coupons, thinking they’re saving when they aren’t. This adds more to the grocery bill. Even though the item itself may be less expensive, you’ll buy things you don’t really need. Try stocking up on those items you use often when there’s a big sale, too. These are little things, but trust me, they add up!

You buy groceries for a reason, right? So stop eating out! Only go to restaurants for special occasions, and don’t be afraid to use coupons in restaurants. Have you seen the price of a soda or iced tea these days? Drink water instead.

Always check the sale and clearance racks first when it comes to buying clothes. There are good clothes at consignment stores and thrift shops, too. While you’re there, sell your old, worn out clothes and anything you don’t wear anymore. Most of all, avoid the trendy, expensive clothes. Buy durable classics that don’t go out of style.

When it comes to entertainment, nothing beats family time. It may sound old-fashioned, but there’s nothing wrong with a night of playing board games. It’s fun! If you like movies, use discount coupons and go to matinees whenever possible. The prices are always lower before dark. If you’re planning a trip with several other people, call ahead and ask for a group discount.

Dave

1 way not to improve your credit

Dear Dave,

I recently bought a new car and financed it at 17.9 percent for 72 months. I did this hoping it would help improve my bad credit. The payments are $468 a month. That means I’ll end up paying about $13,000 in interest alone. Is there a way I can avoid paying all this interest?

Marcus

Dear Marcus,

Yes, there is a way, but you won’t like it. Sell the stinking car!

If your credit is bad, it’s because you haven’t paid your bills, or you haven’t paid them on time. I’ve got a feeling a lot of this can be traced back to the fact that you’ve been buying a bunch a stuff you can’t afford, like a new car with $468 a month payments. What a bad plan!

You’d have over $5,000 in less than a year if you take those car payments and save them. That kind of money will get you a great little used vehicle, and best of all, a car like that won’t be a drain on your income for the next six years!

Dave

Dave Ramsey

Dave Ramsey is a seven-time No. 1 national bestselling author, personal finance expert, and host of "The Dave Ramsey Show," heard by more than 16 million listeners each week. He has appeared on "Good Morning America," "CBS This Morning," the "Today" show, Fox News, CNN, Fox Business and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions. Read more of Dave Ramsey's articles here.