“There’s no right or wrong budget,” says Leslie Linfield, executive director of the Institute for Financial Literacy. “The only rule is, don’t spend more than you make.” 

Don’t spend more than you make should be the budgetary golden rule. Saving money is important but when you have to cut out all of the little things that are important to you and you still haven’t made a dent in your finances.  Then maybe you need to look at the bigger picture.  Time’s article on How to Save Bigger also discusses that larger items take a good chunk out of your budget  - such as housing, food, and transportation. Saving on housing costs, such as utilities and appliances may save money, but cutting back on a small indulgence such as a cappuccino probably won’t make that big of a dent, suggests the author. 

It all depends on what you spend you money on. If you figure a cappuccino or latte into your budget or even dining out into your budget, then you will be able to manage. Other things such as housing are different. Though changing your living situation isn’t as easy and cutting back on your utilities or cable package going cold turkey doesn’t really work when you are budgeting.

A financial middle ground is what is needed – not spending too much, and not spending too little. Good financial sense doesn’t teach people to be miserly and to avoid buying themselves anything. Cutting down on larger items saves more money but at what expense. If you are saving money in one area to make your life more enjoyable in another without going into debt this works. The article also stresses that there is no right or wrong budget.

Sell it or pawn it?

The cash for gold commercials are very tempting. But unlike pawning an item, you have no chance to get the item back.

When should you pawn an item? If you know you can get the money back within the required time – generally 30 days. This is attractive if you need cash fast and know that you want to get the item back.

Selling your gold (or silver) items for cash is for the times when you know you do not like the piece anymore. If the item is actually really in great condition, saleable or an heirloom, you might do better to go to a jeweler’s and sell it to a place that deals in estate jewelry.

The junky jewelry that you bought when you were younger and dislike, don’t wear or it brings up bad memories could be a good source of quick cash. Although you should know that when you sell a gold item for cash, you will get less for 10 karat gold than you would 14 karat, and 14 karat gold will fetch less than 18 karat. Knowing this will save you from disappointment when you are expecting enough for your rent. In actuality, you might only receive enough for a few tanks of gas. Cash is cash, but jewelry doesn’t take up as much room as say an additional piece of furniture that you might want to get rid of.

If you really need money and want to pawn a piece of jewelry to someone but you think it might take you more than the allotted 30 days that you are given at a pawn shop, ask a trusted friend to lend you the money and let them hold the jewelry. This way you can get the item back. Make sure that you write up a contract if necessary.

There’s only just so much I will do to save money. Though I hope these are meant to be humorous… there are just certain things I will not do to save money. This Walletpop article on the “Six Grossest Ways to Save Money” outlines exactly that – gross ways to save money. The grossest has to DIY Feminine Supplies and Recycling Nail Clippings. Other cultures do things that we wouldn’t want to do such as using dung for heating – if you live on a farm, or very rural area using animal dung as fertilizer isn’t unusual. Using your own hair to make something  - though not the oddest things I have ever heard of might be difficult for some to do.

There are probably some other gross ways to save that are so gross, that people don’t want to mention them or take credit for them, many of which may deal with personal hygiene. Since personal hygiene and health issues tend to go hand in hand, there is no scrimping in that area for me!

Mortgage accelerator programs are not bargains at all. My mortgage company always sends me information about their mortgage accelerator program which would allow me to save money over the lifetime of my loan.  Instead of paying monthly I would pay biweekly which would add an additional payment and a quarter each year for the lifetime of the loan. 

BUT, there is a catch, to sign up I have to pay $49 to enroll and a fee of $9 for each month I participate in the program. Over the course of a year, that’s $157 in fees, plus an increase in the amount of my mortgage. Sounds good to save money over the life of the loan, but a better way to do this is to send in an extra amount – however small and consider that amount your mortgage. 

Each month I send in a little over $50 extra. At the end of a year, without paying an additional $157, I have made about 13.5 payments to my mortgage. The benefit to a self-directed prepayment program is that I do not have to pay the same amount all the time, there are no additional fees and there is still a savings.

Figuring out how much more you want to add to your mortgage’s principal is a personal decision. You might not want to make any additional payment each month or at all but if you have a mortgage that does not penalize for prepayment you could prepay, just by making an additional payment over the course of a year.

 Multiply your mortgage payment by 13, then divide that number by 12. This will give you the new amount that you should pay if you want to pre-pay your mortgage. Round the dollar amount to an even number. Pay attention to the pricing for any fee-based mortgage accelerator programs. Even by just adding the yearly fee to your principal will make a difference in interest savings and the amount of equity that you build.

Living well on less. It can be done. I don’t think you actually have to be a cheapskate to do it though.  Jeff Yeager, The ultimate cheapskate has tips for living on less that will save you $20,000 a year. Sounds great but some things you may not want to give up. A cell phone, dining out and sending your kid to college are things Yeager says people should give up.

And they are — let me say in advance — these are some fairly radical changes.
But, again, it’s probably not about sacrifice.
It’s about changing your life and maybe in the end being happier.

Does everyone want to make these radical changes? While it may be necessary to make some radical changes as Yeager advises, going cold turkey may not be the way. Slowly but surely or prioritizing what you really need or want in your life works just as well.

Sure you can save money by not eating out and always cooking at home, but going on for a special occasion is always fun and make the occasion really special. A cell phone is a necessity for many people for work, so cutting that out may not work for everyone. Dining out once a month at a nice place for book club is a social event and I have a great time, I don’t want to cut that from my budget but I have been cooking at home more often, which does save me a lot of money.

Priorities differ depending on your marital and familial status. Do what is right for you – when I make a decision to go to dinner and my other bills (including savings) are paid, then I can splurge a bit. I would make different choices if I had people depending on my salary.