5 Tips for Living Comfortably on a Budget

No matter where you live, the culture that surrounds you affects the way you think about money. Some societies preach the gospel of rampant, wasteful consumerism. Others stress the importance of extreme frugality and a sense of do-it-yourself survivalism. And of course, in between those extremes lies a whole range of attitudes and beliefs about money.

The culture around you affects what you consider to be comfortable living. If everyone you know has not one, but two 60-inch HDTVs, while you hobble on with a 27-inch TV from the dinosaur age, you're bound to notice the disparity.

But does your sense of comfort require that you own massive (and massively expensive) technological marvels? Do your life's core values mean that more toys equal more happiness? If that's the case, you'll have to make sure you have the earning power to buy those toys without sacrificing critical aspects of your finances, such as savings and important investments, like education or a house.

Many people must simply pick and choose what's most important to them in terms of comfort. Whether it's a livable home in a safe neighborhood, good food, a house full of puppies, or a bevy of tech gadgets makes no difference. You just have to decide what really matters to you.

With consumer confidence in the United States at its lowest in three decades, there's talk that maybe people will slowly learn to become savers instead of consumers and spenders [source: Reuters]. But that kind of shift will take years to complete. As it is, Americans spend a tremendous amount of money in areas that could be trimmed. You can compare your spending against the average by checking out this illustration at Visual Economics.

In the meantime, economic realities mean people must learn the art of balancing the cost of comfort items with necessary expenses in a sustainable way. Keep reading and you'll see just how to do that.

Whatever their reasons, many people don't apply any sort of planning to their personal finances. And just like businesses without plans, individuals also fail financially. That's why you need to create a budget.

For many people talk of budget planning causes boredom-induced comas. Whether you love or hate numbers, this critical task can mean the difference between living comfortably and picking change out of (other people's) couch cushions to buy pizza once a month.

But like any other long-term project, by setting goals and tracking them you actually make budgeting fun. The delayed gratification of watching your savings balloon might greatly offset the pain of cutting silly expenses.

Use the power of budgeting tools to help you. You can start immediately with online tools like those found at Kiplinger's budget tool page.

Financial wizard and author Dave Ramsey offers free budget worksheets on his Web site. Suze Orman, another celebrity debt fighter, provides free online tools for determining a range of expenses, from mortgages to interest and much more. Mint.com offers a free online money management tool that lets you track everything from your credit cards, to bank accounts, to investments, all in one place.

Enough with the grown-up lectures about budgeting. On the next page, we'll start diving into the juicy tips that let you get more enjoyment out of your money.

For some people, a spectacular meal at a five-star restaurant is worth missing a mortgage payment. For others, the act of cooking and subsequent mastication is a boring but necessary chore. No matter how you feel about food, one thing is for sure -- you gotta eat.

Americans spend a lot of money on food, to the tune of about $770 per month for a family of four [source: USDA]. But really, that cash could be spent more wisely.

There are plenty of ways to think smarter about food expenses. Here's one critical pointer -- eating out often costs more than cooking at home. So even if you hate cooking, it pays -- literally -- to do some reading up on easy, fast recipes that prevent you from calling for carryout seven days a week.

Buying ingredients for those recipes is itself an art form. You can opt for dozens of fancy, individually packaged products that actually cost more than restaurant food in the long run. Or, you can buy fewer (nonperishable) items, in bulk, and use them for months before running low on supplies. Items such as dry beans, pasta, nuts, sugar, dried fruits, flour, grains, vegetable or chicken stock -- and all sorts of canned vegetables -- save you money in the long run.

Grocery coupons are making a huge comeback, and for good reason. Americans clipped 3.3 billion coupons in 2009. The savings from those glossy bits of paper? Around $3.5 billion [source: Time]. The key is to plan your meals in advance with the items you see are on sale in store circulars, the Sunday newspaper and online at sites such as CouponCabin.com and Coupons.com. Don't forgot about coupons that are available directly through the manufacturer's Web site, too.

Of course, you still have to go out on the town now and then. That's where the social coupon phenomenon (from the likes of Groupon, LivingSocial, Scoutmob and others) comes in handy. Buy deals from great restaurants and wait to use them for special occasions, and you can eat very well for very cheap.

Food is just one facet of your budget. On the next page, we'll dive into making another necessity -- your home -- more comfortable.

Hopefully, your living quarters aren't literally on fire, but if you're paying for digs that are well beyond your means, those shingles might as well be singed because you won't be there for long. You need shelter of course, and you can find comfortable living quarters without sending your bank account up in flames.

If your situation allows, finding a roommate is one of the most powerful ways to reduce living expenses. Stay in the same location and cut your rent and utilities literally in half, or move into a bigger, swankier place and you can still pay less, just by sharing your space with someone else.

This rule is especially true in areas with high costs of living. For example, in Los Angeles, you could easily save more than $200 per month by sharing your space [source: AAGLA]. In San Francisco, you might save a whopping $700 per month. That's like giving yourself a nearly $9,000 raise in salary [source:William Paid].

Just be sure to choose your roommate carefully, and consider setting automatic payments so that you'll never have to worry about getting stuck with someone else's share of the rent [source: Bank of America].

Carefully furnishing and maintaining your home can also drastically lower expenses. Opt for used furniture and appliances instead of fancy new items. Take the time to clean and refurbish them yourself. Not only will you save cash and learn some extremely useful skills, but you can take pride in your work and value those items as more than throwaway, disposable goods.

Extend that DIY attitude toward maintenance, too. You may not have Bob Vila-level skills, but you can solve many household problems without hiring an expensive expert. Just look for a YouTube video that walks you through ways to unclog that sink.

On the next page, you'll see even more about budget living, and how you can avoid the enemy of all good budgets -- burnout.

The fancy-pants media name for budget burnout is "frugal fatigue," (a phrase coined by analyst Paula Rosenblum) and with economic worries escalating, it's the kind of fatigue more people are getting familiar with [source: RSR].In short, frugal fatigue refers to the mental and emotional toll that sets in when you feel like you have to carefully weigh each and every purchase you make.

It doesn't matter whether you're used to having a large disposable income or you're more acquainted with limited spending power. This kind of fatigue can strike anyone who is trying to be more conscientious about limiting unnecessary purchases.

One potential pitfall to frugal fatigue is that eventually you simply get tired of being so deliberate with your money. As a result, you might start splurging unnecessarily, perhaps as a one-time weakness, or as a chronic pattern that threatens to obliterate your savings.

It's important to recognize fatigue if it begins to affect you. If you feel totally bored with budgeting and sick to death of squeezing pennies, you're at risk for a spending bender of sorts. Don't give in to the temptation.

Instead, be creative and kind to yourself and to your family. Splurge and treat yourselves, but be smart about it. Use resources such as Frugalista, Woot or Clark Howard's tips to find cheap deals that let you have a little fun without hemorrhaging big money. By shopping for deals and planning your leisure time around them, you can save scads of cash on everything from food and amusement parks to airline tickets.

And whatever you do, keep tabs on your expenses. If you're in the 42 percent of people who plan to use layaway to buy Christmas gifts, you may want to reconsider how you're spending your money [source: CNN Money]. Remember the first rule of budgeting -- don't spend money you don't have.

Now you know a little more about budgeting, but more important, you understand that while living comfortably has a lot to do with managing your money, creativity helps, too. With a little more forethought, you can alleviate financial stress and have more fun at the same time.