As you are holding that prized piece of sale merchandise in your hand, ask yourself, "Do I need this?" There is a big difference between what you want and what you need.

There once was a man who believed that he needed a big-screen television. He worked hard and put in many hours at the office, and in his thoughts it was his right to come home to a big television that delivered a truly theatrical experience. He felt he needed that extra mile to get true relaxation. It never even crossed his, or his wife's, mind that perhaps they needed to take care of some other obligations first. And so they spent his hard-earned bonus check on that television, and soon started getting phone calls from creditors curious as to why they were not getting the payments they were promised.

Not to pass judgment, but wouldn't that money have been better served toward taking care of payments that needed to be made instead of toward a new television? As time went by, the mortgage payment, which was about the same cost as that of the big-screen television, fell behind. The mortgage company had been promised that payment long before the television came along. They did not care about his superior picture quality and sound, they wanted their money. That's pretty fair. After all, it was their money that paid for the house — he was just paying it back.

There are plenty of other stories of people who decide they saw the best sale on clothes, shoes or furniture, and they just could not wait. That new couch would have looked wonderful in the living room, but when they got caught up in the rush of the purchase they forgot that there were six bills waiting at home for them. Those six creditors didn't care how that couch looked; they wanted their money, which they had been promised. The utilities wouldn't be very understanding as to why they could promise to pay for the couch, but not the bill for their services.

It's easy to get caught up in the Madison Avenue blitz. That's what ad companies are paid to do; they are working hard to have you confuse want and need. It's how the company for which they advertise makes its money, so that they can continue to pay for such clever advertising. We are bombarded with advertising that practically commands us to keep up with the Joneses, whoever they are. Just remember that the people in those commercials didn't have to pay for the new satellite television system, new stereo system or new sofa set. They were just paid to show you how happy you should be if you own them.

Both your money and you will be best served by prioritizing your bills and purchases. Evaluate everything carefully and assess whether it is something you want or something you need. Buy the television if you can afford it. Upgrade your sound system if it won't risk your phone payment. But if your budget is telling you that you won't be able to pay for your groceries when you buy that new leather easy chair, then listen to the budget and wait until you have the money saved for it. Avoiding the impulse to purchase will also allow you time to assess whether what you are buying is truly a need or a want. You will find that things can be much more satisfying if you take care of your needs first and know that your wants won't break the bank.

4. Remember to Save — Anticipate the Unexpected Costs

Even more important than being prepared for a power outage is being prepared for the surprise expenses that occur. It's amazing that people think to have emergency reserves of water, batteries and food, but it does not occur to them to have emergency reserves of money. No matter what the amount, you should set aside money from every paycheck to build an emergency reserve that you can dip into for those unexpected costs that inevitably come your way.

This amount needs to be aside from what you might be setting into your 401(k), 403(b) or other savings plan. Those savings plans are for the future, not the present. People who borrow against their retirement plans now inevitably find themselves in a particularly worse situation in the future. You need to be able to rely on those funds in your golden years when you will not be drawing in the same kind of income to which you have been accustomed.

By now, everyone knows that Social Security just does not provide for the type of living that we would like to enjoy after we retire. Statistics show that if you want to live a comfortable life after retirement, you had better enact an independent savings plan as quickly as possible. This is why a budget is so important. By figuring out how to live within your means now, you can rest easier knowing that the future is more secure.

Let's get back to the present. There are any of a number of unexpected situations that end up costing us a pretty penny. If you do not take the time now to save for those moments you will find your well-laid budget plans derailed and you will be sent back to the drawing board when the slightest financial hurdle shows itself. Part of adequate planning is planning for everything that might happen, not just what we know will happen.

What if you tear your suit jacket and need to have it repaired? That is going to cost money. What if your computer needs to be repaired or replaced? In today's world, it's virtually impossible to exist without computer access. Yet things can and do go wrong with computers, and you will need to be able to pay to take care of it. What if you need new brakes or suspension work on the car? As they say, you cannot put a price tag on safety. Unfortunately, your mechanic can.

This is why it is so important to set aside extra money now. Even if it is only a little each week (or each paycheck), even that small amount can build into a big cushion to soften the unexpected blow. Decide on an amount and work it into your budget. Even if it is only five dollars a week, when your tire goes flat, you'll be glad you did it.