Say the “B” word and suddenly people start to feel purse strings tightening around their neck. It’s much like the latest fad diet; unrealistic budgets are made, and then within months, weeks, days, or even hours….the fad wears off, and bam you are buying a big screen T.V. Like diets, a budget needs to be a lifestyle change, not a fleeting restraint.

Everyone has debts that are necessary to quality of life- food, shelter, clothes, etc.. These are set spending. However, it is the discretionary spending in between that you have total control over. Add up your set bills. Then, subtract that number from your take home pay. That result is your discretionary spending.

The key to any discretionary budget is a realistic spending plan. That is all a budget really is- planning how to spend your money. Here is how to get started:

Everyday you make fiscal choices- eat out or brown bag it? Too many times people see this as an all or nothing approach. A realistic budget will have room for negotiation. For example, brown bag it 3 times, and eat out 2 times.

Stop compounding mistakes. Credit cards are not an expansion for your paycheck. Too many people expect their paycheck to accommodate everything they need and want. Then, when it doesn’t, they turn to credit cards.

Make a discretionary spending plan that is personalized, and not based on averages. Make a list of needs and wants each individual month. For example, do not figure an average of £150 a month for eating out; you may not spend that amount every month. Instead, you may want to use X for eating out, and X for new shoes.

Always allow for needs first. Wanted items are secondary. Get creative if you don’t have enough discretionary income for an item. Never borrow from bill money.

Prioritize “wants”- Do you want a vacation or big screen T.V.? Basically, it is about spending money on what makes you happy, but realizing that you can not spend money on everything that makes you happy.

However, not all of your discretionary spending goes to happy items. You need to put a set amount, usually 10%, into savings every month. Increase that amount every time you get a raise.

Sacrifice another part of your discretionary budget, bonuses, and raises to eliminate debt. A little sacrifice now, will lead to greater freedom in the future.

Remember to budget the yearly expenses- insurance premiums, car tag, holidays, property taxes, etc.. It really doesn’t matter if these expenses are figured into the discretionary budget or set bill budget, just as long as you set a certain amount of money aside for the expenses each month.

Don’t think budget, and see a restraint. Instead, think about it as an advanced spending plan. A feasible discretionary budget means you are less likely to turn to credit cards, and/or steal from your set bill budget.

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