One of the main reasons people end up in credit troubles and debt is because they fail to follow a proper monthly budget plan. You need to do your best to avoid spending more than you make each month. It is important to write down and document some of your major expenses. You can use a simple spreadsheet application like Microsoft Excel to accomplish this. Learn to differentiate between necessities and luxuries.

If you find yourself spending more than you make each month then look to cutting out as many luxuries as possible. Avoid the habit of putting things on your credit card unless you know you have the cash to pay it off in full and are using the credit card as way of paying for the item easily like making an online purchase. One way to reduce impulse purchases is to simply avoid going to the stores unless you have an important necessity item to purchase.

This does not mean you cannot have any fun or buy certain toys that you like. The key is to keep it under control and not let your spending cause you to get into debt problems. It is always a good idea to try to have excess cash at the end of each month as savings as you never know when you might need it. You want to keep at least 6 months living expenses in your savings account in case you lose your job so you are fine until you find another position.