Your Wednesday savings challenge is to recycle as much as possible. Or, at least think of ways to recycle. Make a list to see how many tips for recycling you can come up with. Recycling not only saves money, it saves our resources and the environment. Everyone wins when you recycle. Recycling is not just for homemade kids crafts any more. Many items can recycled for everyday household uses. Don't throw anything away until you think of at least three alternative uses for recycling it. Here are a few recycling tips to get you started thinking about recycling.
Egg cartons. Both cardboard and styrofoam cartons are well known in craft making circles for a variety of craft needs. Styrofoam egg cartons also can be recycled to use as reserve ice cube trays. If you're having a party and need some extra ice, cut these in half and use the bottom for individual ice cubes. The top can even be used to make one large cube for a punch bowl. Or, leave top on to make for easier stacking of water filled bottoms. Just close the lid to stack one on top of the other. The separated little compartments are great for storing and organizing small items such as, Christmas ornaments, buttons, nuts and bolts, jewelry, coins, etc. Gardeners will love to use egg cartons as seed starters. There are many more recycle uses for egg cartons. See how many you can think of.
Coffee Cans. The newer, no can opener required, coffee cans are great for recycling. You don't have to worry anymore about dangerous sharp edges. Use for storage, make a piggy bank, bake perfectly round bread, make play instruments (drums and noise makers) for children, houseplant saucers, and much more. I'm sure you can think of a few more recycle uses for coffee cans right now!
Foam Food Trays. These make great toy airplanes. Cut out your own patterns and use cleaned foam food trays to cut out pieces and put together. Reuse as disposable serving platters for picnics, barbeques, or parties. Use to cut shapes for mini wreaths, Christmas ornaments, and a variety of other craft uses.
Magazines. Use the colorful pages for small gift wrapping. Roll up to make boot trees that help keep boots in shape during storage. Save for future use in kids crafts and collages.
Garden hose. Cover swing set chains. Protect saw blades or ice skate blades (slit lengthwise and fit over saw or skate blade). Make a play phone from a cut piece with funnels (or cans) attached to each end.
Each time you go to throw an item away, whether it be a can, carton, or box, stop and think of how many ways you can recycle it. Use it for that recycled purpose if it suits your needs. If not, just write it down on your recycling list. Thinking of recycling uses can be a fun game, too. Ask other family members to help. Make it a game. Have each person write down as many uses for an item that they can think of. Research books on recycling at your local library to learn more recycling tips. At the end of Waste Not Wednesday you'll surely have thought of some useful recycling ideas that suit your personal needs.
Wednesday, December 12, 2007
Sunday, December 9, 2007
Track and record finances
You've created a great budget and have planned for current and future spending. You want your spending predictions and financial goals to stay on track, now that you have a practical plan to achieve them. Today's spending will directly effect the success of planned spending. After all, if you overspend on current needs, you won't have the funds available to keep your finances moving towards your goals. So, how can you assure yourself that your finances are moving in the right direction? Tracking spending accounts keeps you in control of your money!
Track your spending accounts and assign transactions to appropriate budget categories daily. Making this a daily "to-do" will give you the knowledge to keep your finances moving in the right direction. Tracking purchase transactions daily gives you a clear picture of how much you have left to spend in each category at any given time. You've set your limits based on your individual financial information. Now, track your spending to be sure you stay within those limits. If you skip this important part of a complete spending management system, you will inevitably overspend and be short the funds to apply to future spending and goals. Give your financial predictions the winning edge. Track spending daily.
Tracking in real time is an innovative method of tracking your money. Real time money management retrieves transactions from spending accounts in a timely, efficient, manner so you can stay on top of spending everyday. Assigning spending transactions to their appropriate categories, as soon as possible, gives you an up to date picture of how much you have spent, and how much you have left to spend, in each budget category. This technique eliminates month end spending surprises and puts you in total control of your money.
Finding out you've over spent after the fact doesn't leave you many options. You no longer have the option not to spend on that expense. You must adjust other spending goals to make up for the mistake. Usually, this adjustment will come from your planned future spending. Your funding for future financial goals will be neglected and your budget falls away from "the plan." It's too late to adjust your spending accordingly once the money is spent. That's why it's so important to track your spending as it occurs.
Keep your predictions and goals on track. Track and record purchases in a timely, efficient, manner to maintain complete control of your money. This is an essential part of a complete spending management system. Know what your current financial picture looks like to give yourself more decision options. Keep the doors to your financial success open. Track your spending to keep your financial predictions and goals on track.
Next in this four part series - PART 3: Comparing Spending
Track your spending accounts and assign transactions to appropriate budget categories daily. Making this a daily "to-do" will give you the knowledge to keep your finances moving in the right direction. Tracking purchase transactions daily gives you a clear picture of how much you have left to spend in each category at any given time. You've set your limits based on your individual financial information. Now, track your spending to be sure you stay within those limits. If you skip this important part of a complete spending management system, you will inevitably overspend and be short the funds to apply to future spending and goals. Give your financial predictions the winning edge. Track spending daily.
Tracking in real time is an innovative method of tracking your money. Real time money management retrieves transactions from spending accounts in a timely, efficient, manner so you can stay on top of spending everyday. Assigning spending transactions to their appropriate categories, as soon as possible, gives you an up to date picture of how much you have spent, and how much you have left to spend, in each budget category. This technique eliminates month end spending surprises and puts you in total control of your money.
Finding out you've over spent after the fact doesn't leave you many options. You no longer have the option not to spend on that expense. You must adjust other spending goals to make up for the mistake. Usually, this adjustment will come from your planned future spending. Your funding for future financial goals will be neglected and your budget falls away from "the plan." It's too late to adjust your spending accordingly once the money is spent. That's why it's so important to track your spending as it occurs.
Keep your predictions and goals on track. Track and record purchases in a timely, efficient, manner to maintain complete control of your money. This is an essential part of a complete spending management system. Know what your current financial picture looks like to give yourself more decision options. Keep the doors to your financial success open. Track your spending to keep your financial predictions and goals on track.
Next in this four part series - PART 3: Comparing Spending
Thursday, December 6, 2007
Reduce your Grocery Costs
Monday, concentrate on saving money on your food budget. Miser Monday? The definition of a miser is "a saver." Today's savings challenge is to become a grocery miser. Once you start saving on groceries, you'll want to learn more ways to save on groceries. Few people realize that the grocery expense is the most flexible budget expense. You can easily reduce your grocery costs using some simple money saving strategies. Grocery savings can be substantial savings that can free up money for future financial goals. It's the first place to look for, and eliminate, overspending.
Plan your weeks menus around the sales flyer for the store where you frequently shop for groceries. If there's a great buy on ground beef, plan to have spaghetti, chili, meatloaf, or some other ground beef dishes. The same strategy applies if chicken is on sale. You can have two or three meals planned around the meat special for this week. Plan at least one, preferably two, meatless or reduced meat meals. Beans and rice or bean casseroles are a good meatless meal. Thinking ahead, and planning, is an important part of saving money.
Use your menus to make a grocery list. Purchase only the items on your list. You might need to use a great deal of self control but, you'll save time and money using a grocery list. Purchase only the grocery items needed to complete the week's menus. You might also want to consider stocking up on any leader sale items that you use on a regular basis.
Save even more using other money savings strategies. You don't have to clip coupons to save. The rule for coupons is to clip coupons for products you plan to buy. Don't buy a product simply because you have a coupon. You'll save just by planning your menus around sale items and sticking to your grocery list. But, using some other money saving strategies, you can save even more money.
Search for coupons for items on the list before going to the store. Compare pricing carefully. Larger quantities aren't always cheaper, especially if a smaller quantity of the same item is on sale. Pricing by unit (per pound, ounce, or quart, liter, etc.) is the best way to compare. Deception in packaging is a common food vendor practice. Learn not to be fooled.
Buy generic, if generic is lower cost. Many generic products are just as good as brand name items. Many grocery stores now offer a rebate program for even more savings. They make it very easy by providing online submission sites. No more mailing in receipts and filling out forms. Receipts are automatically tracked and rebate items credited to your account.
Using a combination of these saving strategies on your grocery purchases will result in maximum savings. Purchase sale items, and use coupons and rebates in combination whenever possible. If you've planned your menus correctly and followed your grocery list, you should not have to return to the grocery store until next week. That leads me to the next grocery saving strategy.......Stay out of the grocery store as much as possible.
Grocery stores use numerous consumer tactics to get you to buy more! They do a great deal of research in consumer habits to develop tactics that prompt you to spend more. Don't expose yourself to consumerism any more than is necessary. If you must run to the store for a forgotten item I have two suggestions. Send an older child into the store to purchase the item. They won't have the option to buy anything else. If that's not possible, take the most direct route to the product you need and head straight for the cashier. When you've saved all that you can save on your grocery bill, you've met your Miser Monday savings challenge.
Monday, December 3, 2007
Sunday, December 2, 2007
Track Your Results
All throughout this money saving journey you want to keep this process as organized and structured as possible. You'll find that a lack of organization will not only frustrate and make things more difficult for you, but it will be nearly impossible to track your results.
Tracking your results is one of the MOST important steps to the money saving process. If you do not track the results from your money saving efforts, the money you save will never be set aside and put towards your pre-established GOAL.
Believe me, I know how difficult it can be after researching and implementing money saving techniques to take additional time to track your results, but this is your "bread and butter"; the whole reason you're budgeting and conserving.
How will you ever accomplish your goal if you aren't tracking how much money you're saving? You won't, and more than likely you'll end up spending the money you were able to save.
Tracking your results is one of the MOST important steps to the money saving process. If you do not track the results from your money saving efforts, the money you save will never be set aside and put towards your pre-established GOAL.
Believe me, I know how difficult it can be after researching and implementing money saving techniques to take additional time to track your results, but this is your "bread and butter"; the whole reason you're budgeting and conserving.
How will you ever accomplish your goal if you aren't tracking how much money you're saving? You won't, and more than likely you'll end up spending the money you were able to save.
If there is one idea you take from this last section, remember that tracking your results allows you to get an exact dollar amount that has been physically set apart from your regular checking and savings accounts designated solely toward your predetermined goal.
Since it will be much easier for this process, and your conscious, it is recommended that you open a special savings account just for the money you save.
With this "special" savings account, you can easily tell how much you have saved by simply looking at your monthly statement. This account will also help prevent you from accidentally spending the money since it is not directly linked to your regular checking or savings accounts.
*Suggestion: do not get an ATM card linked to this account so again, you won't be able to simply withdraw money and spend it needlessly. Be firm and only spend the money on your GOAL.
Of course you can always keep the money in a shoe box under the bed, but think how easy it would be for you to simply reach in that box and spend that money. With a special savings account, not only will you treat this money with more respect, but you will also get a monthly bank statement you can use to help track your results.
*Note: make sure you sign up for a free savings or checking account devoid of monthly fees regardless of the amount you maintain. Check with the different banks in your area for the most accommodating
Since it will be much easier for this process, and your conscious, it is recommended that you open a special savings account just for the money you save.
With this "special" savings account, you can easily tell how much you have saved by simply looking at your monthly statement. This account will also help prevent you from accidentally spending the money since it is not directly linked to your regular checking or savings accounts.
*Suggestion: do not get an ATM card linked to this account so again, you won't be able to simply withdraw money and spend it needlessly. Be firm and only spend the money on your GOAL.
Of course you can always keep the money in a shoe box under the bed, but think how easy it would be for you to simply reach in that box and spend that money. With a special savings account, not only will you treat this money with more respect, but you will also get a monthly bank statement you can use to help track your results.
*Note: make sure you sign up for a free savings or checking account devoid of monthly fees regardless of the amount you maintain. Check with the different banks in your area for the most accommodating
Final Thought
You now have in your possession eight steps to effectively combat the money saving process. Your success is entirely up to you and how devoted you are to this task. If you dedicate yourself wholeheartedly and refuse to accept defeat you will achieve your goal(s).
Saturday, December 1, 2007
The Three R's - Review, Revise, Retry
Anyone who has tasted success, has in some way or another taken into account the "three R's" - Review, Revise, Retry.
How do I know this? Reason being, nobody is perfect, so no one will be able to do a perfect, flawless job on the first attempt in anything whether it's for work or pleasure. This is nothing to be ashamed of, it's just a fact. We as humans have flaws and are imperfect. But our determination, creativity, and willingness to adapt, allow us to achieve the things we set our minds on.
What will determine your success in this budgeting/money saving journey will be directly related to the three R's: Review, Revise, Retry.
How do I know this? Reason being, nobody is perfect, so no one will be able to do a perfect, flawless job on the first attempt in anything whether it's for work or pleasure. This is nothing to be ashamed of, it's just a fact. We as humans have flaws and are imperfect. But our determination, creativity, and willingness to adapt, allow us to achieve the things we set our minds on.
What will determine your success in this budgeting/money saving journey will be directly related to the three R's: Review, Revise, Retry.
Purpose of Reviewing
Once you have designed and implemented your money-saving agenda for a couple weeks, take a moment to reflect on your progress. Ask yourself these questions: What seems to be working best right now? Is there something I know is definitely NOT working? What was the most positive result from my efforts? Do I have new ideas I'd like to incorporate into my plan?
The purpose of this reflection process is to analyze your efforts to date, and decide what has been positive, and what may need revision. You will then be able to continue doing what works, and at the same time get rid of the techniques that are not working.
It is imperative that you reflect on your progress to find what is working for you, and not waste precious time on ineffective, useless practices.
The purpose of this reflection process is to analyze your efforts to date, and decide what has been positive, and what may need revision. You will then be able to continue doing what works, and at the same time get rid of the techniques that are not working.
It is imperative that you reflect on your progress to find what is working for you, and not waste precious time on ineffective, useless practices.
Purpose of Revising
Once you have reviewed your progress, you may have a few ideas you would like to revise or start using. You may find that some techniques simply need to be adjusted so that they become more effective for you.
The revision process allows you to take mediocre techniques and turn them into effective money-saving methods.
This could be comparable to a writer who has just finished the first draft of a new book. This author is not about to ask a publisher to put this book "on the shelves" in stores. It has to be revised, edited, proofed, re-written, and finalized, in order to get the book as solid as possible.
Same thing goes for the money-saving process. You'll want to revise your plan discarding ineffective ideas, and altering semi-effective techniques in hopes of improving their results.
The revision process allows you to take mediocre techniques and turn them into effective money-saving methods.
This could be comparable to a writer who has just finished the first draft of a new book. This author is not about to ask a publisher to put this book "on the shelves" in stores. It has to be revised, edited, proofed, re-written, and finalized, in order to get the book as solid as possible.
Same thing goes for the money-saving process. You'll want to revise your plan discarding ineffective ideas, and altering semi-effective techniques in hopes of improving their results.
Purpose of Retrying
Now that you have reviewed and revised your agenda and have a few different ideas you want to try out, it is now time to put those ideas into effect, hence the title RETRY. It is now time to retry your efforts and see if these changes make any difference and improve your situation.
You should be able to tell rather quickly if your revisions are helpful.
Conclusion
Keep in mind that these money saving exercises are ALL new to you. Budgeting, saving money, lowering bills, nothing will be perfect the first time, so don't expect it to be.
Do you think Thomas Edison invented the light bulb on his first attempt? Of course not! There were dozens of failed attempts, but this learning process gave way to his success. He revised his methods and adapted to the new found ideas and information. He was also not afraid to change his theory and models to make way for new beliefs and opportunities. Same goes for you.
Don't be afraid to make mistakes or be unsuccessful with certain money saving techniques. It's OK. It will happen. Point is, it's important to Review Revise, and Retry whenever necessary. If something does not work, make the necessary revisions and try it again. This process is expected and it is a sign of someone striving for success.
Do you think Thomas Edison invented the light bulb on his first attempt? Of course not! There were dozens of failed attempts, but this learning process gave way to his success. He revised his methods and adapted to the new found ideas and information. He was also not afraid to change his theory and models to make way for new beliefs and opportunities. Same goes for you.
Don't be afraid to make mistakes or be unsuccessful with certain money saving techniques. It's OK. It will happen. Point is, it's important to Review Revise, and Retry whenever necessary. If something does not work, make the necessary revisions and try it again. This process is expected and it is a sign of someone striving for success.
Friday, November 30, 2007
Implement a "Game" Mentality
Now that you have a goal to strive for, a list of variable bills to lower, and an understanding as to why it's important to compare cost, risks, and benefits before making a purchase, you're now ready to CHALLENGE yourself to succeed.
Are you wondering how you are supposed to CHALLENGE yourself?
Take for example a track runner/sprinter who is able to run the 100m sprint in 10.6 seconds. What do you think this runner will do next? He/She will CHALLENGE themselves to beat that 10.6 time the next sprint.
Point is, this runner is constantly pushing him or herself to do better. The CHALLENGE is to strive for a faster time each and every time they run the 100m sprint.
Same thing applies to your money saving efforts. You will want to CHALLENGE yourself to beat the amount you can save each and every month.
When you CHALLENGE yourself to save as much as possible, you inspire yourself to succeed. Since you are faced with this "CHALLENGE" you'll start thinking "Hey, if I was able to save $75 this month, there's no reason why I couldn't save $85 next month."
For example, if you were able to save $84 in October, your goal for November is to beat that amount. In other words, save more than $84 in the month of November.
Are you wondering how you are supposed to CHALLENGE yourself?
Take for example a track runner/sprinter who is able to run the 100m sprint in 10.6 seconds. What do you think this runner will do next? He/She will CHALLENGE themselves to beat that 10.6 time the next sprint.
Point is, this runner is constantly pushing him or herself to do better. The CHALLENGE is to strive for a faster time each and every time they run the 100m sprint.
Same thing applies to your money saving efforts. You will want to CHALLENGE yourself to beat the amount you can save each and every month.
When you CHALLENGE yourself to save as much as possible, you inspire yourself to succeed. Since you are faced with this "CHALLENGE" you'll start thinking "Hey, if I was able to save $75 this month, there's no reason why I couldn't save $85 next month."
For example, if you were able to save $84 in October, your goal for November is to beat that amount. In other words, save more than $84 in the month of November.
Name Your Game
Once you are ready to challenge yourself, try and think of this whole process as one big, giant GAME. You can name this GAME whatever you want, but try and incorporate your GOAL into the name of this budgeting GAME.
For example - "Hawaii, Here We Come""Chevy Silverado Savings""Our Family Trip To Vegas"
As with any game, the object is to have fun and win.
Thinking of these money saving exercises as a game will both inspire you and help you take your mind off the whole saving process. More importantly, this game can help you get your whole family involved without having to beg and plead with them to help. Remember, children L - O - V - E games!
Make a colorful chart or illustrated graph on which you can track your savings total. You can then post it in a location where your family can look and see their progress whenever they want.
GET CREATIVE and HAVE FUN with your money saving goals. The more pleasant and enjoyable you make this project for you and your family, the more likely you'll be to follow through with your plan and ACTUALLY be successful.
For example - "Hawaii, Here We Come""Chevy Silverado Savings""Our Family Trip To Vegas"
As with any game, the object is to have fun and win.
Thinking of these money saving exercises as a game will both inspire you and help you take your mind off the whole saving process. More importantly, this game can help you get your whole family involved without having to beg and plead with them to help. Remember, children L - O - V - E games!
Make a colorful chart or illustrated graph on which you can track your savings total. You can then post it in a location where your family can look and see their progress whenever they want.
GET CREATIVE and HAVE FUN with your money saving goals. The more pleasant and enjoyable you make this project for you and your family, the more likely you'll be to follow through with your plan and ACTUALLY be successful.
Conclusion
Implementing a "game" mentality will not only help alleviate any stress or fear you may have regarding this whole process, but it will make saving money much more enjoyable to do. Who doesn't like to play games?
Not only will a game make your agenda much more appealing, but it will kickstart your competitive spirit and CHALLENGE you to do your best.
Not only will a game make your agenda much more appealing, but it will kickstart your competitive spirit and CHALLENGE you to do your best.
Wednesday, November 28, 2007
Weighing the Cost, Risks, and Benefits
In addition to lowering your monthly bills and expenditures, you need to look at your shopping/spending habits and determine if any changes need to be made.
This is extremely important for a number of reasons. Basically, how helpful would it be if you took time to research and implement effective money saving tips, then went out and needlessly spent $200 on stuff you really didn't need? You would have done all that hard work for nothing.
This is why it is important to not only lower your monthly expenses, but to also adopt the mind set that before a single dollar is spent on anything, weigh the cost, risk and benefits they will have on your budgeting efforts.
This is extremely important for a number of reasons. Basically, how helpful would it be if you took time to research and implement effective money saving tips, then went out and needlessly spent $200 on stuff you really didn't need? You would have done all that hard work for nothing.
This is why it is important to not only lower your monthly expenses, but to also adopt the mind set that before a single dollar is spent on anything, weigh the cost, risk and benefits they will have on your budgeting efforts.
Cost - Risks - Benefits
What does that mean - cost, risks and benefits?
Basically, this is a shopping mentality most frugal and conscientious individuals maintain WHENEVER they are faced with the choice to buy, or not to buy (the question every shopper should address before spending their hard earned money).
Think of this as a ritual you follow prior to purchasing ANYTHING. From the smallest trinket, to the most expensive gadget, get into the habit of comparing the COST - RISK - BENEFIT, before you spend a single dollar.
Regardless of how much it costs, get used to comparing these three important factors. For smaller, inexpensive purchases, you can simply weigh the pros and cons in your head. For larger, more expensive purchases, you should write down the benefits and consequences and discuss it with significant others in your family.
Basically, this is a shopping mentality most frugal and conscientious individuals maintain WHENEVER they are faced with the choice to buy, or not to buy (the question every shopper should address before spending their hard earned money).
Think of this as a ritual you follow prior to purchasing ANYTHING. From the smallest trinket, to the most expensive gadget, get into the habit of comparing the COST - RISK - BENEFIT, before you spend a single dollar.
Regardless of how much it costs, get used to comparing these three important factors. For smaller, inexpensive purchases, you can simply weigh the pros and cons in your head. For larger, more expensive purchases, you should write down the benefits and consequences and discuss it with significant others in your family.
Cost
First of all, the COST of the item/product you are thinking about purchasing. Is it reasonable? Will buying this product put a major dent into your spending allowance? Can you afford to purchase this product without having to change any spending/living habits?
Get used to questioning the cost of every purchase. Ask yourself questions such as - would it be better to wait for a sale or markdown? What about buying the item/product used or borrowing from friends?
Get used to questioning the cost of every purchase. Ask yourself questions such as - would it be better to wait for a sale or markdown? What about buying the item/product used or borrowing from friends?
Risk(s)
What is the RISK to you and your family if you do decide to purchase a particular product? In other words, how will it affect your lives?
For example, if you were to purchase a new $30,000 car, what effect would that have on you, your significant-other, your children, etc? Will you have to work more hours in order to get by? Will you have to cut back in other spending areas to afford this new payment? Will this added expense keep you from paying your other monthly bills with ease?
There are always RISKS to consider whenever you purchase something, especially when you purchase something with an expensive price tag. Many times we overlook these RISKS and simply buy without thinking about all the possible consequences. Keep this in mind and you'll avoid putting yourself and your family at RISK!
For example, if you were to purchase a new $30,000 car, what effect would that have on you, your significant-other, your children, etc? Will you have to work more hours in order to get by? Will you have to cut back in other spending areas to afford this new payment? Will this added expense keep you from paying your other monthly bills with ease?
There are always RISKS to consider whenever you purchase something, especially when you purchase something with an expensive price tag. Many times we overlook these RISKS and simply buy without thinking about all the possible consequences. Keep this in mind and you'll avoid putting yourself and your family at RISK!
Benefit(s)
In addition to the risks associated with any new purchase, there are also some benefits to consider. At least there should be some benefits or you shouldn't even be thinking about buying it. In short, how will this product benefit you and your family? Do the benefits outweigh the risks?
To put this into perspective, imagine a large scale. The Item/Cost is in the middle of the scale, and on each side are balances. One side has the RISKS, the other side has the BENEFITS.
If you find that the BENEFITS outweigh the RISKS, then you know that the purchase is reasonable and will BENEFIT you and your family. On the other hand, if the RISKS outweigh the BENEFITS, then you may want to consider not buying that particular item. Why put you and your family at RISK if it's not going to benefit them?
Make it a habit to always compare the RISKS with the BENEFITS before buying. Not only will you find yourself becoming a more wise, careful shopper, you'll find this to be an excellent money-saving opportunity to help you in achieving your goal.
To put this into perspective, imagine a large scale. The Item/Cost is in the middle of the scale, and on each side are balances. One side has the RISKS, the other side has the BENEFITS.
If you find that the BENEFITS outweigh the RISKS, then you know that the purchase is reasonable and will BENEFIT you and your family. On the other hand, if the RISKS outweigh the BENEFITS, then you may want to consider not buying that particular item. Why put you and your family at RISK if it's not going to benefit them?
Make it a habit to always compare the RISKS with the BENEFITS before buying. Not only will you find yourself becoming a more wise, careful shopper, you'll find this to be an excellent money-saving opportunity to help you in achieving your goal.
Tuesday, November 27, 2007
Eliminate Unnecessary Spending
You'll find that one of the easiest ways to come up with additional money is to first put an end to all the needless spending.
I'm sure you are all familiar with this concept. Every single one of us has been guilty of wasteful spending at one time or another in our lives.
For example, have you ever walked into a store just to "look around" and ended up spending $50+ on stuff you didn't plan on buying?
Or how about the five or ten dollars spent on junk food and impulse buys at the supermarket? It may not seem like much at the time, but that money adds up to a rather hefty bill over time.
These are examples of the types of spending habits you want to try and rid yourself of, especially since you are striving towards the GOAL you decided on a while back. Refining this approach, you can start directly eliminating unnecessary spending with most, if not all of your monthly variable expenses.
Where To Begin
Now that you have a list of all your monthly expenses and have singled out five of the most excessive bills, it is time to start eliminating unnecessary spending in these five areas.
When you start tackling your expenditures on an individual basis, adopt the mind set that EVERY dollar is important and valuable to your personal goal. Five or ten dollars may not seem like much to save off one bill per month, but if you multiply that by all your bills, over the course of a year you get a much more substantial figure.
You may soon find yourself saving an extra one or two hundred dollars a month just by eliminating excessive and unnecessary spending from your monthly expenses. And the best part is that you did not have to get another job. You did not have to work overtime or additional days at your current job. All you did was tackle each individual monthly expense with creative, yet effective, money-saving techniques.
Since you have already singled out the five bills that seem to be the most excessive, you have a specific starting point. Remember, there's no need to overwhelm yourself by trying to lower all your monthly bills at once. Not only will you burn yourself out, but you won't maximize your savings potential with each individual bill.
In order to lower your bills to their lowest possible amounts, you will need to devote some time to research and find tips specifically designed for each particular bill.
For example, if you are trying to lower your household electric bill, you would want to search the Internet, contact your electric provider or visit their website (ie: sce.com), check out the local public library or maybe even a bookstore for any sources providing useful, relative tips.
- Once finished researching, you will have a list of all the tips you plan on implementing similar to this:
- Change to lower wattage/energy efficient light bulbs
- Install ceiling fans (reduce AC & circulate hot air)
- Lower temperature on water heater & refrigerator
- Insulate attic area and access panels
- Seal & caulk ALL air leaks
- ALWAYS turn off appliances when not in use (ie: TV)
- Install outdoor window shades to help cool the house
- etc...
Sunday, November 25, 2007
Expense Tracking
Now that you have a specific money-saving goal to strive towards, it's time to dive into the process of lowering your monthly bills and expenditures.
Obviously, a choice you have is to work "overtime" hours at your current place of employment, or get a "second" job for additional income. For the record, the following process we will divulge does not look at this opportunity.
Hence, the agenda from this point forward will be to analyze all your expenditures, and lower the monthly amounts of each bill one by one in order to save the difference.
Obviously, a choice you have is to work "overtime" hours at your current place of employment, or get a "second" job for additional income. For the record, the following process we will divulge does not look at this opportunity.
Hence, the agenda from this point forward will be to analyze all your expenditures, and lower the monthly amounts of each bill one by one in order to save the difference.
Where To Begin
To come up with extra money, or to generate a substantial increase in your monthly savings, you MUST first find out where you are spending the money you earn.
Everyone's individual saving potential is unique, varying anywhere from $10-$1500+ a month. Since incomes and monthly expenses differ for literally every household, it is impossible to set a standardized target everyone can achieve.
Point is, regardless of how much money you make per month, it is imperative that you find out how much money you are spending per month, and even more specifically, how much you spend on each specific bill/expenditure.
The degree of accuracy you put towards this task is up to you as always, but at some point you will need to list out all your monthly expenses. To put your mind at ease, you don't need to spend hours upon hours calculating averages and compiling data for the past decade. You simply need to list out each and every expense you pay per month, and the most accurate estimations for each particular expense.
Everyone's individual saving potential is unique, varying anywhere from $10-$1500+ a month. Since incomes and monthly expenses differ for literally every household, it is impossible to set a standardized target everyone can achieve.
Point is, regardless of how much money you make per month, it is imperative that you find out how much money you are spending per month, and even more specifically, how much you spend on each specific bill/expenditure.
The degree of accuracy you put towards this task is up to you as always, but at some point you will need to list out all your monthly expenses. To put your mind at ease, you don't need to spend hours upon hours calculating averages and compiling data for the past decade. You simply need to list out each and every expense you pay per month, and the most accurate estimations for each particular expense.
Here are some of the most common monthly bills found in most households:
Electricity
Mortgage
Car Payment
Food
Clothing
Insurance(s)
Home Telephone
Gasoline
School
Dining Out
Pets
Water
Gas (home)
School
Pets
Water
Internet (ISP)
Home Cable
Entertainment
Cellular Phone
Miscellaneous
If you have the most current statements handy, then by all means use the exact amounts, however try not to let this exercise consume more than an hour of your time. This is not meant to depress you, or criticize your spending habits. It is merely a list to help provide you with a "bird's eye view" of how and where you spend your money.
Now That You Have Your List
We all have some spending habits that may be a bit excessive, or untamed. You may have even surprised yourself as you were making your list of expenses and had to double check to see if you were writing the correct amount. That's ok! Think of it this way, it will only get better from here on out.
Our goal now, is to eliminate all the excessive, unnecessary spending on as many monthly bills as possible.
Using your list of bills/expenditures, go through and highlight or underline FIVE of the bills that seem to be the most excessive. In other words, you are looking for five of your bills that you can immediately tell are unattractively absurd.
These are the five bills you will want to tackle first since they are the most extreme and will probably be the easiest to lower.
Our goal now, is to eliminate all the excessive, unnecessary spending on as many monthly bills as possible.
Using your list of bills/expenditures, go through and highlight or underline FIVE of the bills that seem to be the most excessive. In other words, you are looking for five of your bills that you can immediately tell are unattractively absurd.
These are the five bills you will want to tackle first since they are the most extreme and will probably be the easiest to lower.
Sunday, November 18, 2007
Declare your Money-Saving Goals
Now that you are 100% sure in your decision to effectively save more money, the next step is to decide on a specific goal you want to achieve.
The purpose of establishing a money saving goal is that it allows you to strive for a tangible reward you have wanted for some time, but maybe never had the money to purchase.
A money-saving goal will keep you focused on the task at hand and help guarantee your success. If you find yourself wavering from your agenda, keeping your end reward in mind will get you back on track, urging you to continue on.
The purpose of establishing a money saving goal is that it allows you to strive for a tangible reward you have wanted for some time, but maybe never had the money to purchase.
A money-saving goal will keep you focused on the task at hand and help guarantee your success. If you find yourself wavering from your agenda, keeping your end reward in mind will get you back on track, urging you to continue on.
Which GOAL Is Right For You?
The goal you select does not need to be above a certain price, or take you twenty years to acquire. However, it should be something that you REALLY want. For instance, if you have always wanted to vacation in Hawaii, but never had the "spare" money to accommodate this excursion, then this may be a goal to set for yourself.
If you have your mind set on a new entertainment center for your living room such as a 60" flat panel, wall mountable, digitally enhanced television, complete with a superior, top-of-the-line audio system, then this may be the money saving goal for you.
In addition to these types of goals, you may want to bypass the "short-term" rewards and strive towards a long-term goal such as securing retirement, a vacation home, or building a six-digit savings account. Again, this decision is entirely up to you, however keep in mind that it may be a good idea to first start off with a short-term goal in order to get rewarded from your efforts in a relatively short amount of time. Then afterwards, once you are more accustomed to this money-saving process, you can move on to a long-term, more elaborate goal.
As soon as you decide on a specific goal to strive towards, put a picture of it up on the wall in your room or in a highly visible area so you will be constantly reminded of your reason for saving money. The visual stimulation alone will help keep you inspired to succeed and hopefully prevent you from giving up on this important endeavor.
In addition to posting a picture of your goal, get creative and make a chart or graph to track your progress. Designing some type of tracking system will not only keep you motivated, but provide you with the exact amount you have already saved, and how much is still needed. You may also find that tracking your progress will allow you to see what techniques are paying off, and let you compare savings totals month to month which should hopefully be increasing as you go along.
If you have your mind set on a new entertainment center for your living room such as a 60" flat panel, wall mountable, digitally enhanced television, complete with a superior, top-of-the-line audio system, then this may be the money saving goal for you.
In addition to these types of goals, you may want to bypass the "short-term" rewards and strive towards a long-term goal such as securing retirement, a vacation home, or building a six-digit savings account. Again, this decision is entirely up to you, however keep in mind that it may be a good idea to first start off with a short-term goal in order to get rewarded from your efforts in a relatively short amount of time. Then afterwards, once you are more accustomed to this money-saving process, you can move on to a long-term, more elaborate goal.
As soon as you decide on a specific goal to strive towards, put a picture of it up on the wall in your room or in a highly visible area so you will be constantly reminded of your reason for saving money. The visual stimulation alone will help keep you inspired to succeed and hopefully prevent you from giving up on this important endeavor.
In addition to posting a picture of your goal, get creative and make a chart or graph to track your progress. Designing some type of tracking system will not only keep you motivated, but provide you with the exact amount you have already saved, and how much is still needed. You may also find that tracking your progress will allow you to see what techniques are paying off, and let you compare savings totals month to month which should hopefully be increasing as you go along.
Thursday, November 15, 2007
Do you REALLY Want to Save Money?
Asking the question if you really want to save more money may seem a little absurd, especially since everyone probably wants to increase their savings account and have more money to spend. Less debt and more savings sounds like the best of both worlds, right?
The reason I'm asking if you REALLY want to save more money is to assist you in determining how sincere and motivated you are towards this upcoming endeavor.
Sure it's easy to proclaim your desire to save more money. That's the simple part. Anyone can shout out "I'm going to save more money!" or "I'm going to lose 40 pounds!" or "I want to be a millionaire!"
Where was the difficulty in making those statements?
Simply vocalizing your intentions is one thing however actually accomplishing these tasks is a completely different story and here's where my question comes into play: Do you REALLY want to save more money?
If you are able to answer with a confident, definite YES, congratulations! You have taken the first step in accomplishing this intimidating task.
Granted this is probably the easiest part of the entire budgeting process, nevertheless the role it plays in your effort is crucial. Put it this way, without fully committing yourself to this task, how can you expect to have any success? You won't, and your efforts will be short lived. This is something you definitely do not want to happen.
Over the next week, take the time to decide if you are truly ready to effectively tackle the money saving process. Remember, this exercise will be like any other hobby or new undertaking. You will need to put some time and energy into this task in order to be successful.
Just as you can't learn to play the piano or learn how to paint without putting the time in to practice, same goes for the money-saving process. Remember that in order to reach your financial goals, you will need to devote some serious time to accomplish what you are seeking.
Granted the amount of time you'll need all depends on the degree of importance this plays in your life. Still understand that success comes only after devotion to the task.
Hopefully this has helped you come to realize that budgeting and saving are serious tasks that are vital to your family's financial future. It is now time to prepare yourself to accomplish this extremely important task.
Monday, November 12, 2007
Sunday, November 11, 2007
Free Budget Worksheets
These free budgeting worksheets are in high quality PDF format so that you can easily print them. Because these budget worksheets are high quality the file sizes are large, so it may take a few minutes to download. Please be patient. You will need the free Adobe Acrobat Reader to view these files.
There's a Better Way!
Manually tracking your finances using paper worksheets like the ones above can be a difficult and time consuming task. Luckily, there is a revolutionary new modern method to track your spending and manage your finances. Mvelopes Personal modernizes the budgeting concepts used in the budgeting worksheets above by using advanced Internet technology. You can now manage your finances in just a few minutes a week allowing you to get out of debt and save for the future. Mvelopes will give you the peace of mind to spend with confidence, knowing the money is set aside for each expense.
There's a Better Way!
Manually tracking your finances using paper worksheets like the ones above can be a difficult and time consuming task. Luckily, there is a revolutionary new modern method to track your spending and manage your finances. Mvelopes Personal modernizes the budgeting concepts used in the budgeting worksheets above by using advanced Internet technology. You can now manage your finances in just a few minutes a week allowing you to get out of debt and save for the future. Mvelopes will give you the peace of mind to spend with confidence, knowing the money is set aside for each expense.
Monday, November 5, 2007
Has Microsoft® Money Helped You Become Better Off Financially?
I tried to get started using Microsoft Money several times. But after getting it going I found that it just didn't really help my finances. Most people find they are not better off after using Quicken. In spite of all that Money does it does not solve the fundamental problem that keeps most people from achieving their financial goals, and that is managing their spending. The key is budgeting, but not the traditional approach. Money uses the traditional after-the-fact approach, basically a month-end reconciliation of budget to actual spending, which simply does not work. Imagine trying to manage your grocery or clothing spending but not knowing how much you have spent in each until the end of the month. It just doesn't work. You need accurate, up-to-date information for each spending category right when you make a spending decision. You cannot wait until the end of the month.
Something New!
I found a great option to using MS Money to manage my personal finances. It is called Mvelopes Personal. Mvelopes Personal allows you to easily create a budget with dynamic spending accounts that provide you with daily, up-to-date balance information for each spending category. You always know how much money you have left to spend in each category, and how long it has to last. You can then begin to manage your spending, and lay the foundation for reaching your financial goals. Take a look at the following key feature differences that make Mvelopes different.
Sunday, November 4, 2007
Has Quicken® Helped You Become Better Off Financially?
As an experienced Quicken user I found that it didn't really make a difference to my finances. Most people find they are not better off after using Quicken. In spite of all that Quicken does it does not solve the fundamental problem that keeps most people from achieving their financial goals, and that is managing their spending. The key is budgeting, but not the traditional approach. Quicken® uses the traditional after-the-fact approach, basically a month-end reconciliation of budget to actual spending, which simply does not work. Imagine trying to manage your grocery or clothing spending but not knowing how much you have spent in each until the end of the month. It just doesn't work. You need accurate, up-to-date information for each spending category right when you make a spending decision. You cannot wait until the end of the month.
Something New!
I found a great option to using Quicken to manage my personal finances. It is called Mvelopes Personal. Mvelopes Personal allows you to easily create a budget with dynamic spending accounts that provide you with daily, up-to-date balance information for each spending category. You always know how much money you have left to spend in each category, and how long it has to last. You can then begin to manage your spending, and lay the foundation for reaching your financial goals. Take a look at the following key feature differences that make Mvelopes different.
Something New!
I found a great option to using Quicken to manage my personal finances. It is called Mvelopes Personal. Mvelopes Personal allows you to easily create a budget with dynamic spending accounts that provide you with daily, up-to-date balance information for each spending category. You always know how much money you have left to spend in each category, and how long it has to last. You can then begin to manage your spending, and lay the foundation for reaching your financial goals. Take a look at the following key feature differences that make Mvelopes different.
Saturday, November 3, 2007
Personal Finance Software is Money Magic by Kristen N. Carpenter
Does your money seem to pull a disappearing act each month? Does your credit card statement continually leave you wondering when and how you could have spent that much? What about that cash you took out from the ATM the other day – could you possibly have spent it already?
Let's face it. Managing your personal finances can be a difficult task – especially when on a tight budget. Every time you turn around, there's another bill to pay, and before you know it, your entire paycheck has been spent – and then some! Soon, you find yourself drowning in the financial demands of everyday life, and the vicious cycle of living paycheck to paycheck – or worse yet, living on credit – has begun. You ask yourself, "How did this happen to me?"
If you are finding it increasingly difficult to juggle the many different financial aspects of your life, you are not alone. The fact is, in today's modern society, the average consumer is forced to allocate the money from one stream of income to more than 30 different sources! From mortgage payments and health insurance to childcare services and credit cards, it's no wonder money appears to continually vanish before our eyes. But what if there was a way of reducing the invisibility of your spending? A way of budgeting yourself in a simple, pain-free manner and achieving that so-called state of "financial freedom" once and for all? Thankfully, where there is a will, there is a way.
I found a great personal finance software program called Mvelopes Personal.Mvelopes Personal is the new affordable and easy-to use online budgeting system sweeping the world of personal finance, is the answer to all your budgeting woes. Mvelopes' unique budgeting concept offers a straightforward method to reining in your finances, enabling you to spend less and spend more efficiently while still enjoying what matters most to you in life.
Gone are the days of discovering how much you have spent after it's too late to do anything about it. Instead, Mvelopes enables you to take control of your finances now by tracking the current balances within each of your designated financial software envelopes as you are doing the spending. In this manner, at the click of a button you will know exactly how many of your allocated dollars have been spent from each of your envelopes, thus leaving yourself better equipped to avoid going over your limit.
This real-time money tracking is made possible through a transaction download service, which is just one component of the Mvelopes Personal Budgeting system. Add to that the optional bill pay service, the financial portfolio management service and the outstanding free budget coaching all included in the package as well, and the result is your number one source for assistance in managing your personal budget.
Isn't it about time YOU took control of your finances and embarked upon the path towards financial freedom?
To learn more about how Mvelopes can help you to start making better spending decisions, or to sign on right away for your one month free trial offer, visit the Mvelopes homepage at http://www.mvelopes.com/index.php?cpn=knc-2qx979870772&accessCode=D001002003.
Isn't it about time YOU took control of your finances and embarked upon the path towards financial freedom?
To learn more about how Mvelopes can help you to start making better spending decisions, or to sign on right away for your one month free trial offer, visit the Mvelopes homepage at http://www.mvelopes.com/index.php?cpn=knc-2qx979870772&accessCode=D001002003.
Friday, November 2, 2007
What Kind of Budget Planner are You?
There are a few different types of planners when it comes to managing budgets. The invisible planner neglects to track, manage, or take the time to update the budget. This planner seems to think if you create a budget it will take care of finances for you. All by itself. The passive planner takes a look at the budget on occasion but, really doesn't bother to take action when the figures don't add up? You might be a passive planner if you think that your budget will fix itself. Gee, these are two really great budgets, where do I get one? The efficient planner seeks to keep the budget alive and well. This planner has a realistic view of budgeting. So how do you become the efficient budget planner?
Set realistic expectations for yourself. We all want to be efficient budget planners. However, sometimes we make it hard on ourselves to achieve efficient budgeting. Many people set unrealistic budgeting goals and set themselves up for defeat from the start. Being more realistic with budgeting methods and figures can be easier and prove to be more efficient. If you're an invisible or passive budgeting planner, seek out the most efficient budgeting tools that meet your needs. The easier you make it on yourself, the more likely you are to follow through with budgeting tasks like budget tracking, updating, and maintaining.
Set realistic amounts for budget expenses. If you traditionally spend $500 on food each month, don't try to make your budget balance by decreasing the amount to $300. That is of course unless, you intend to actively use some money saving strategies to meet that goal. If $300 is a realistic goal, then go for it by all means. Follow this concept with all your expenses. Set realistic goals based on past spending. Then, if income and expenses don't balance, you can reduce spending in categories that you can (and will) most realistically make an effort to reduce.
Set realistic goals. If you have a huge debt payment, you're likely not to have the funds for savings until you eliminate debt. Plan to manage and eliminate debt first, then apply those freed up funds to savings and investment goals. Planning your goals to be achieved in a logical, realistic, time period and order will increase your chances of success at overall budget planning. Be sure to designate short and long term goals accordingly.
Budgeting is all about being real. Getting a real grasp on your finances. Being true to yourself and your financial needs is essential to your budget planning success. Don't plan a high finance budget on a moderate finance income. Be real with yourself. Everyone is different and has different financial goals and needs. Decide what you need to survive and be happy. What are you willing to realistically give up, or cut to the minimum, to make your budget plan work? Don't expect yourself to make major lifestyle and personality changes to suit your budget plan. Especially, if you've tried this in the past and failed. Instead, when planning your budget, create a realistic plan that suits your individual needs and personality. You'll be more likely to stick to it and succeed at achieving your financial goals.
Set realistic expectations for yourself. We all want to be efficient budget planners. However, sometimes we make it hard on ourselves to achieve efficient budgeting. Many people set unrealistic budgeting goals and set themselves up for defeat from the start. Being more realistic with budgeting methods and figures can be easier and prove to be more efficient. If you're an invisible or passive budgeting planner, seek out the most efficient budgeting tools that meet your needs. The easier you make it on yourself, the more likely you are to follow through with budgeting tasks like budget tracking, updating, and maintaining.
Set realistic amounts for budget expenses. If you traditionally spend $500 on food each month, don't try to make your budget balance by decreasing the amount to $300. That is of course unless, you intend to actively use some money saving strategies to meet that goal. If $300 is a realistic goal, then go for it by all means. Follow this concept with all your expenses. Set realistic goals based on past spending. Then, if income and expenses don't balance, you can reduce spending in categories that you can (and will) most realistically make an effort to reduce.
Set realistic goals. If you have a huge debt payment, you're likely not to have the funds for savings until you eliminate debt. Plan to manage and eliminate debt first, then apply those freed up funds to savings and investment goals. Planning your goals to be achieved in a logical, realistic, time period and order will increase your chances of success at overall budget planning. Be sure to designate short and long term goals accordingly.
Budgeting is all about being real. Getting a real grasp on your finances. Being true to yourself and your financial needs is essential to your budget planning success. Don't plan a high finance budget on a moderate finance income. Be real with yourself. Everyone is different and has different financial goals and needs. Decide what you need to survive and be happy. What are you willing to realistically give up, or cut to the minimum, to make your budget plan work? Don't expect yourself to make major lifestyle and personality changes to suit your budget plan. Especially, if you've tried this in the past and failed. Instead, when planning your budget, create a realistic plan that suits your individual needs and personality. You'll be more likely to stick to it and succeed at achieving your financial goals.
Thursday, November 1, 2007
Budget Percentages by Nattie Gilbert
I was recently emailed asking me what I recommended for budget percentages. Since I didn't know what our budget percentages are, I couldn't answer. I decided to investigate what ours were and what other people recommended.
Our Budget
Taxes 7%
Housing 33%
Auto (payment, insurance) 19.5%
Savings and Investment 7%
Medical and Life Insurance 2.5%
Food 21%
Misc. (clothing, toiletries, recreation, gifts, allowances, etc.) 10%
After investigating other sources, I discovered that we were similar. We are higher in some categories and lower in others.
Consumer Credit Counseling Service
Housing 20-30%
Utilities 4-7%
Food 15-20%
Transportation 6-20%
Medical 2-8%
Clothing 2-4%
Invest/Savings 5-10%
Debt Payments 15-20%
Misc. 5-10%
Bare Bones Budget from National Fdn for Consumer Credit
Housing 24%
Food 14%
Health 6%
Clothing 6%
Transportation 17%
Entertainment 5%
Personal Insurance 11%
Charity 4%
Savings and Other 13%
Budget Example
Savings 5%
Food 18%
Transportation 12%
Clothing 9%
Medical 6%
Recreation 5%
Housing (including utilities, furniture, and operating expenses)27%
Other 18%
If every budget example is different, then how do you know what to do. First there are some basic recommendations.
Our Budget
Taxes 7%
Housing 33%
Auto (payment, insurance) 19.5%
Savings and Investment 7%
Medical and Life Insurance 2.5%
Food 21%
Misc. (clothing, toiletries, recreation, gifts, allowances, etc.) 10%
After investigating other sources, I discovered that we were similar. We are higher in some categories and lower in others.
Consumer Credit Counseling Service
Housing 20-30%
Utilities 4-7%
Food 15-20%
Transportation 6-20%
Medical 2-8%
Clothing 2-4%
Invest/Savings 5-10%
Debt Payments 15-20%
Misc. 5-10%
Bare Bones Budget from National Fdn for Consumer Credit
Housing 24%
Food 14%
Health 6%
Clothing 6%
Transportation 17%
Entertainment 5%
Personal Insurance 11%
Charity 4%
Savings and Other 13%
Budget Example
Savings 5%
Food 18%
Transportation 12%
Clothing 9%
Medical 6%
Recreation 5%
Housing (including utilities, furniture, and operating expenses)27%
Other 18%
If every budget example is different, then how do you know what to do. First there are some basic recommendations.
- Save or invest at least 5%.
- Debt payments shouldn't exceed 15%.
- Mortgage companies want house payment to be no morethan 25%. Housing or rent costs should be kept within your means. We struggle in our area due to booming economy and high rents.
There are a few basic steps in order to set up a viable budget.
All budgets should be specific to your needs and goals. There is no set amount that works for everyone.
Make sure that you set realistic amounts. It's unrealistic to take on another loan that would cut your allotted food expenses in half when you're already struggling to stay within your budget.
Treat savings used for goals and emergencies as a bill. If you wait to save what's leftover at the end, there will never be anything left over.
Involve your family members. Spousal cooperation is necessary for any budget plan to succeed. I let my children participate in our budget discussions. Since I started doing this, my children understand money better. They are less likely to whine when they can't get something. They are also proactive in our frugal goals, especially when they know if we spend less on food there is more for fun. I also hope that they won't struggle like my husband and I did to learn to budget as adults.
Track, track, track. I truly hate this part and it makes me feel obsessive. But if you don't track, you won't know exactly where your money goes and where you need to focus. How you track depends on your personality. Computer programs like Quicken and Mvelopes Personal work great for some people, but not us. We need something quick, easy, and accessible to each of us. Therefore we use a notebook with lines for categories. All discretionary expenditures are listed in like categories such as food, recreation, and gas. We total them every day to see where we are. I've discovered if I compare budgeting to dishes (daily) instead of spring cleaning (yearly), I have much more success.
Refrain from impulse buying. "Oh sure," you say. If I could o that, I wouldn't even be reading this. I have a confession, I impulse shop, too. I believe most people do. The key is to find out why, what are your weaknesses and is there another way to satisfy your need or overcome your weakness. I often impulse shop when I feel ugly (which usually coincides with PMS). After analyzing this tendency and realizing that I probably can't overcome the feeling, I've brainstormed other ways to feel prettier than buying something. Treating myself to a bubble bath, good book and soft music satisfies the need to feel pampered and pretty without spending money. If you track your expenditures for at least 3 months, you will be able to see your weak spots. Then you can begin to overcome them.
Budgeting requires a commitment to ongoing tracking, analysis and implementation of frugal alternatives. A successful budget doesn't happen without hard work and time.
Gary Forman of the Dollar Stretcher explains why budgets fail. "When you analyze it, there are really three reasons why people are unsuccessful in budgeting. The most common causes of failure are unrealistic goals, quitting too soon, and misunderstanding what a budget really is."
Wednesday, October 31, 2007
Steps to Building a Budget by Elizabeth Dargis
Many people procrastinate on making a budget because they are unsure of the process of creating one. I will take you step by step and by the end you can have your own personal budget.
Step 1: Get a small notebook to take with you. In it write down everything you buy for at least a month. Up to three months if you'd like. I was shocked to see how much our family spent on little stuff like vending machine purchases and magazines. I found that most of our money wasn't being spent on big things, but the little, "Oh, what's three dollars here or there."
Step 2: After your time period is up, analyze your spending patterns. Put all your purchases in categories like groceries, entertainment, etc.
Step 3: Now separate those categories into two categories: Fixed Expenses and Variable Expenses. Fixed are things like Rent and Insurance. The variable expenses are all those that you have in your power to change like groceries, utilities and clothing.
Step 4: Add up all the expenses in each of the categories. Write down the totals for each. i.e. Phone: $58 a month
Step 5: Add up all your income for the month. Then add up all your fixed expenses. Subtract your fixed expenses from your income. Income: 3,000 -2,100 fixed expenses =$900. The result is what you have left for variable expenses.
Step 6: Now you can spread the leftover money into your other categories. Keep in mind yearly expenses like taxes. Consider putting 10% into savings. Take a look at where you can cut down. Enter the amount you have decided to spend in each category on your budget worksheet. And now you have a sanity saving budget.
Step 7: Keep track monthly of what you spend in each category. I use Mvelopes Personal to do that. Readjust your budget if you need to. Only you know where your spending priorities are.
Step 1: Get a small notebook to take with you. In it write down everything you buy for at least a month. Up to three months if you'd like. I was shocked to see how much our family spent on little stuff like vending machine purchases and magazines. I found that most of our money wasn't being spent on big things, but the little, "Oh, what's three dollars here or there."
Step 2: After your time period is up, analyze your spending patterns. Put all your purchases in categories like groceries, entertainment, etc.
Step 3: Now separate those categories into two categories: Fixed Expenses and Variable Expenses. Fixed are things like Rent and Insurance. The variable expenses are all those that you have in your power to change like groceries, utilities and clothing.
Step 4: Add up all the expenses in each of the categories. Write down the totals for each. i.e. Phone: $58 a month
Step 5: Add up all your income for the month. Then add up all your fixed expenses. Subtract your fixed expenses from your income. Income: 3,000 -2,100 fixed expenses =$900. The result is what you have left for variable expenses.
Step 6: Now you can spread the leftover money into your other categories. Keep in mind yearly expenses like taxes. Consider putting 10% into savings. Take a look at where you can cut down. Enter the amount you have decided to spend in each category on your budget worksheet. And now you have a sanity saving budget.
Step 7: Keep track monthly of what you spend in each category. I use Mvelopes Personal to do that. Readjust your budget if you need to. Only you know where your spending priorities are.
Tuesday, October 30, 2007
Basic Frugal Budgeting by Nattie Gilbert
1. Clarify Your Income and ExpensesYou can use basic budgeting and frugal ideas to reduce your monthly expenses and reach your financial goals. First, list all sources of gross income. Second, list all of your fixed expenses and subtract them from your gross income. Fixed expenses include savings, credit and loan payments, insurance payments, mortgage or rent, and taxes. The amount left is what you have for variable expenses. Variable expenses, the easiest to reduce, include groceries, clothing, auto expenses, eating out, and entertainment.
2. Reduce Fixed ExpensesLook at all of your bills to see how you can reduce them. Do you need caller id, HBO, and 4 monthly magazines that no one is reading? One at a time, cancel extras you don't need or use. Investigate insurance costs, credit card interest rates, long distance charges, etc. We now save $32 per month after switching car insurance companies. Don't overwhelm yourself, pick one area a month to look into and change whatever is possible.
3. Track Your SpendingUse a small notebook, your checkbook register or financial software to track all of your expenditures. I find it easier to use a small notebook and the check register, because I can carry it with me and stay current. Financial software, like Mvelopes Personal, does an excellent job. Our biggest problem area was food shopping. So I spent many hours researching how to grocery shop more economically, and we now spend about half as much as we were.
4. Analyze Your SpendingAfter tracking all of your spending habits for at least a month, look to see where you can reduce your spending. Is your long distance phone bill too high? You could change to a cheaper long distance provider, reduce the number and length of your calls, send emails or write instead. Do you spend too much on lunches out? You could pack you lunch – even once or twice a week helps. Do you spend too much on dinners out, especially after hard work days? You could freeze meals ahead and make it easy to pop dinner into the oven or microwave. For example, make a double batch of Sunday's spaghetti and thaw and reheat the second one on Friday night after a long rush hour.
5. How to ReduceIs there an area that you would like to reduce, but don't know how? Look it up on the Internet. For example, you spent entirely too much on cosmetics recently. Do an online search for frugal or homemade cosmetics to find some innovative and fun ways to spend less in the future.
6. Reward YourselfFrugality takes time and effort. Reward yourself for your progress, but not with financial rewards. For example, play soft music and spend the evening lying in bed reading a good book – borrowed from the library, of course!
2. Reduce Fixed ExpensesLook at all of your bills to see how you can reduce them. Do you need caller id, HBO, and 4 monthly magazines that no one is reading? One at a time, cancel extras you don't need or use. Investigate insurance costs, credit card interest rates, long distance charges, etc. We now save $32 per month after switching car insurance companies. Don't overwhelm yourself, pick one area a month to look into and change whatever is possible.
3. Track Your SpendingUse a small notebook, your checkbook register or financial software to track all of your expenditures. I find it easier to use a small notebook and the check register, because I can carry it with me and stay current. Financial software, like Mvelopes Personal, does an excellent job. Our biggest problem area was food shopping. So I spent many hours researching how to grocery shop more economically, and we now spend about half as much as we were.
4. Analyze Your SpendingAfter tracking all of your spending habits for at least a month, look to see where you can reduce your spending. Is your long distance phone bill too high? You could change to a cheaper long distance provider, reduce the number and length of your calls, send emails or write instead. Do you spend too much on lunches out? You could pack you lunch – even once or twice a week helps. Do you spend too much on dinners out, especially after hard work days? You could freeze meals ahead and make it easy to pop dinner into the oven or microwave. For example, make a double batch of Sunday's spaghetti and thaw and reheat the second one on Friday night after a long rush hour.
5. How to ReduceIs there an area that you would like to reduce, but don't know how? Look it up on the Internet. For example, you spent entirely too much on cosmetics recently. Do an online search for frugal or homemade cosmetics to find some innovative and fun ways to spend less in the future.
6. Reward YourselfFrugality takes time and effort. Reward yourself for your progress, but not with financial rewards. For example, play soft music and spend the evening lying in bed reading a good book – borrowed from the library, of course!
Monday, October 29, 2007
10 Quick Debt-Busting Tips by Colin McCaig
Are you really frustrated?Does it sometimes seem like the dollars are slipping through your fingers while the bills just seem to keep mounting up? It's a familiar feeling for many of us nowadays. Sometimes, though, like most things in life, taking a step back from it all and starting to get some simple things right can make a huge difference on the big picture.
If your debts have been getting you down recently, here are 10 great ways to start slashing them today:
1. First off, consider going on a "cash diet" for the next few months. Lock away some of those credit cards in a safe deposit box... or just cut them up altogether! By all means keep a low interest rate card for emergencies, but definitely rid yourself of any store cards. Why? Because they encourage you to buy junk you don't need at exorbitant rates of interest!
2. If you're having difficulties with any of your lenders, approach and deal with them personally. Not only will they appreciate your initiative, but will be far more responsive down the line if you're having further repayment difficulties. The one thing that irritates them most is someone ducking and diving the problem.
3. If you think you can afford to pay off any of your loans in one go, approach your lender and offer a reduced final settlement of anything between 25 and 75%. Try and get the best deal. They can only say no, and might just say yes to get some money in. When I was deep in debt, I was fortunate to pay off a bank overdraft in this way. In fact, they proposed straight off a settlement of 75%... not me!
4. Ask for a promotion at work. Believe it or not, it's estimated that one in two people who actually do this get one.
5. Shop around to get the best deals on utilities like gas and electric... A home energy audit can help save hundreds of dollars a year on heating bills. Ask your supplier who may be able to this for free or at very low cost. Many countries now have websites where you can make sure you're getting the best deal. Try doing a web search for "energy savings" plus your country. A good US site for this is: http://snipurl.com/4vjo If you're in the UK, try checking out: http://www.uswitch.com/ Also, make sure that any new appliances are energy efficient. This alone can save you hundreds of dollars a year.
6. If you have a spare room, why not consider renting it out for a while.
7. Check to see you're paying the right amount of tax. You might possibly be due a refund. Every year governments rake in hundreds of millions in unclaimed tax. You can get free software programs to help you with this.
8. Buy cheaper insurance and investments. Shop around for the best deal on all types of insurance, including life, home, health, travel and pet cover. This could save you thousands over the coming years!
9. Consider shopping more online. Online stores often give a discount as they don't have the same overheads involved when selling offline. Search for those goods you want using a search engine or ask the retailers themselves if they have an online store. Here's a great free resource to get you started.
10. Have a direct debit set up so that your debt payments leave your account the day your paycheck is paid in. That way, you'll be less tempted to spend it. And when you do get out of debt, charge a direct debit to another account and pay in a regular monthly amount (as much as you can afford.) Call this your own personal wealth insurance. You'll never regret it. By adopting the above strategies, the light at the end of the tunnel will start shining that little bit brighter. Instead of spending more than you earn, you'll soon be earning more than you spend! Good luck!
Sunday, October 28, 2007
Five Major Ways to Save Money by Paul Davis
There are two main roads to improving your personal finances: increasing income, and cutting costs. Increasing income is the harder road to travel. After all, you can't always get a raise or a new job when you need one. But cutting costs, that's a different story! You're in complete control in this area. And all it takes is some imagination and discipline-both of which are free. Below are five major ways to save money in the basic areas of food, shelter, clothing and transportation. They're major expenses in your life - and places for major savings.
1. Home Cooking
Food is a major expense in everyone's budget. But, in today's convenience food society, it's easy to overlook how much money can be saved by cooking meals at home. Plus, it's fun, creative, and healthier to make your own meals. The key is to cook in "bulk" to stretch the food you buy over several meals. If you're a busy person with little time to spare, a good investment is a slow cooker (or crock pot). Generally, they run from $20 to $80, depending on the size. With a slow cooker, you can set aside some time on the weekend to cook stews, soups, and other delicious meals that can be frozen for weekday use. After a hard day at work, all you have to do is pop the meal in the microwave! More than likely, you'll enjoy an additional benefit - your taste buds will wake up from mass produced food and thank you for the delicious taste of a home-cooked meal!
2. Drive less, exercise more
Is owning a car expensive? You already know the answer to that question, don't you? Gas, maintenance, insurance costs. Plus the mental aggravation of being caught in traffic jams! Why not carpool or take public transportation-the bus, train, or light rail? Or, if you live close to work, walk or bike. You'll lose weight, lower your blood pressure, and see the world at a slower pace. And, oh yes, you'll save a couple of thousand dollars in the process.
3. Cut housing costs
This is an easy and fun way to cut costs. Instead of paying a contractor to come in to make changes or repairs, make them yourself. Local hardware stores love your business and will help you with tips and tricks on home repair. Also, do your own decorating and painting. You get two benefits by doing your own changes and repairs - you get the pride of accomplishment and you save money.
4. Cut clothing costs
This can be another major area of expenses, especially if you have a family. So, try buying used clothing... dry clothes on the clothes line instead of in a dryer... learn how to mend clothes...well, you get the idea!
5. Quit your addictions
Okay, so this is not really an easy category, but if you enjoy cigarettes and a drink, this is where you can realize some major savings. Assume you're spending $5.00 a day on cigarettes. Added up over a year, that's an expense of $1825. As for liquor or wine, we all know how expensive that is. Assume you buy one bottle a week at $10 to share with family members or friends. That's $520 a year. Add both amounts up, and the total is $2,345! That's money that could be paying down your debt or going into savings. And don't forget the health benefits. You probably have many other ideas on how to save money in the five areas. If it seems hard at times to cut costs in these places, remember one thing - you're on the road to keeping more of your money in your own pocket! As the old saying goes: "Money saved is as good as money earned".
1. Home Cooking
Food is a major expense in everyone's budget. But, in today's convenience food society, it's easy to overlook how much money can be saved by cooking meals at home. Plus, it's fun, creative, and healthier to make your own meals. The key is to cook in "bulk" to stretch the food you buy over several meals. If you're a busy person with little time to spare, a good investment is a slow cooker (or crock pot). Generally, they run from $20 to $80, depending on the size. With a slow cooker, you can set aside some time on the weekend to cook stews, soups, and other delicious meals that can be frozen for weekday use. After a hard day at work, all you have to do is pop the meal in the microwave! More than likely, you'll enjoy an additional benefit - your taste buds will wake up from mass produced food and thank you for the delicious taste of a home-cooked meal!
2. Drive less, exercise more
Is owning a car expensive? You already know the answer to that question, don't you? Gas, maintenance, insurance costs. Plus the mental aggravation of being caught in traffic jams! Why not carpool or take public transportation-the bus, train, or light rail? Or, if you live close to work, walk or bike. You'll lose weight, lower your blood pressure, and see the world at a slower pace. And, oh yes, you'll save a couple of thousand dollars in the process.
3. Cut housing costs
This is an easy and fun way to cut costs. Instead of paying a contractor to come in to make changes or repairs, make them yourself. Local hardware stores love your business and will help you with tips and tricks on home repair. Also, do your own decorating and painting. You get two benefits by doing your own changes and repairs - you get the pride of accomplishment and you save money.
4. Cut clothing costs
This can be another major area of expenses, especially if you have a family. So, try buying used clothing... dry clothes on the clothes line instead of in a dryer... learn how to mend clothes...well, you get the idea!
5. Quit your addictions
Okay, so this is not really an easy category, but if you enjoy cigarettes and a drink, this is where you can realize some major savings. Assume you're spending $5.00 a day on cigarettes. Added up over a year, that's an expense of $1825. As for liquor or wine, we all know how expensive that is. Assume you buy one bottle a week at $10 to share with family members or friends. That's $520 a year. Add both amounts up, and the total is $2,345! That's money that could be paying down your debt or going into savings. And don't forget the health benefits. You probably have many other ideas on how to save money in the five areas. If it seems hard at times to cut costs in these places, remember one thing - you're on the road to keeping more of your money in your own pocket! As the old saying goes: "Money saved is as good as money earned".
Saturday, October 27, 2007
Becoming Debt-Free by David DeFord
What keeps most people from developing wealth? What is the greatest obstacle to retirement? If you could eliminate one thing to position yourself for financial peace and security, what would be?The answer to each question above is debt!
Imagine the freedom and peace you would feel with no debt! Imagine the small portion of your paycheck you would need to meet your needs and obligations if the all of your earnings were available to you! Think about the savings, investments, and charitable giving you could enjoy!
The safety of your family may depend upon your attention to your debt. It has been estimated that 89% of all divorces can be traced to quarrels and accusations over money.
What will it take to convince you to finally resolve to become debt free? Will you need to be cornered by a creditor? Will you have to be publicly embarrassed? Or will you respond to a milder stimulus, like the frank advice of a friend, or an article like this one?
It's not the amount of money we earn that brings peace of mind as much as it is having control of our money. Money can be an obedient, productive servant, or a brutal taskmaster.
Success has a way of passing by those who have not the discipline to handle it. Through our healthy respect for money, we can attract wealth.
Compounding interest is your enemy. It robs you of your working funds. Tony Robbins taught about the power of compounding by comparing it to a small , friendly wager on a golf course. Say that your golf partner suggested a small 10 cent bet per hole. You think, "Well, that means that only $1.80 is at stake." So, you agree. Then, he suggest that you double the bet on each subsequent hole. Here's how it would go, if your partner wins each of 18 holes: One the first hole you lose a dime. On the second, you lose twenty cents. When you add the dime from the first hole, you're down only 30 cents. Big deal! The third hole is worth forty cents, the fourth only 80 cents. Not too bad. But now watch what happens: Hole five is worth $1.60, sixth $3.20, seventh $6.40, eighth $12.80, and the ninth $25.60. When you add up your losses on the first nine, you realize you are down $51.11. Once you have finished your game, you will have lost what, maybe $150? Actually, because of compounding you will owe $19,660.80.
Now, your debts probably haven't interest rates that high, but the principle is the same – if you pay only the minimum payments on your debts, you will pay them for years and years. You will pay many times the actual principle you spent in the first place.
So, what will it take to eliminate your debt? First, you will need to determine why you are in debt in the first place. Don't spend time on the external reasons – they are excuses. What inside of you built your debt? Generally, the internal reasons center on the need for immediate gratification. Rather than saving your money for furniture, cars, or vacations, did you borrow for them? Distinguish between need and want. Maybe you wanted to keep up with the living standard of your friends or family. Or you frequently make purchases on impulse.
Search your heart deeply. Discuss your debt situation with your spouse. You can't make the needed changes without his or her help. Maybe he or she sees more clearly than you the internal cause.
Make a Plan After you have identified the internal cause, make a plan to conquer it.
Make a budget, make a goal. Decide how you will reduce your spending enough to attack your debt. Some people think a budget robs them of their freedom. On the contrary, successful people have learned that a budget makes real economic freedom possible.
Think of your debt as a cancer. You must first eliminate it's spreading, and then you must eradicate it. Use invasive treatments to kill it.
Use the snowball technique.
- Identify your smallest debt (debt one).
- Pour every available cent each payday into paying down that debt. Pay the minimum payment on the other debts.
- Once you have paid off that first debt, identify the next smallest one (debt two).
- Add the amount you had been paying on debt one to the minimum of debt two, and pay that amount.
- Let the snowball grow with each debt you eliminate.
As you continue, your snowball will get huge, and your progress will seem to multiply.
Keep a chart of your progress.
Plan ahead how you will celebrate the successful elimination of each debt along the way. But don't celebrate in ways that would slow your progress. Be tenacious. Don't let anything get in your way.
Once you have achieved your desired end-financial freedom, resolve to never have debt again – keep budgeting.
You can then begin the delightful opportunity to use your excess earnings toward building wealth, enjoying the fruits of your labors, and preparing for your retirement.
Friday, October 26, 2007
Five Major Ways to Save Money
There are two main roads to improving your personal finances: increasing income, and cutting costs. Increasing income is the harder road to travel. After all, you can't always get a raise or a new job when you need one. But cutting costs, that's a different story! You're in complete control in this area. And all it takes is some imagination and discipline-both of which are free. Below are five major ways to save money in the basic areas of food, shelter, clothing and transportation. They're major expenses in your life - and places for major savings.Home Cooking
Food is a major expense in everyone's budget. But, in today's convenience food society, it's easy to overlook how much money can be saved by cooking meals at home. Plus, it's fun, creative, and healthier to make your own meals. The key is to cook in "bulk" to stretch the food you buy over several meals. If you're a busy person with little time to spare, a good investment is a slow cooker (or crock pot). Generally, they run from $20 to $80, depending on the size. With a slow cooker, you can set aside some time on the weekend to cook stews, soups, and other delicious meals that can be frozen for weekday use. After a hard day at work, all you have to do is pop the meal in the microwave! More than likely, you'll enjoy an additional benefit - your taste buds will wake up from mass produced food and thank you for the delicious taste of a home-cooked meal!
Drive less, exercise more
Is owning a car expensive? You already know the answer to that question, don't you? Gas, maintenance, insurance costs. Plus the mental aggravation of being caught in traffic jams! Why not carpool or take public transportation-the bus, train, or light rail? Or, if you live close to work, walk or bike. You'll lose weight, lower your blood pressure, and see the world at a slower pace. And, oh yes, you'll save a couple of thousand dollars in the process.
Cut housing costs
This is an easy and fun way to cut costs. Instead of paying a contractor to come in to make changes or repairs, make them yourself. Local hardware stores love your business and will help you with tips and tricks on home repair. Also, do your own decorating and painting. You get two benefits by doing your own changes and repairs - you get the pride of accomplishment and you save money.
Cut clothing costs
This can be another major area of expenses, especially if you have a family. So, try buying used clothing... dry clothes on the clothes line instead of in a dryer... learn how to mend clothes...well, you get the idea!
Quit your addictions
Okay, so this is not really an easy category, but if you enjoy cigarettes and a drink, this is where you can realize some major savings. Assume you're spending $5.00 a day on cigarettes. Added up over a year, that's an expense of $1825. As for liquor or wine, we all know how expensive that is. Assume you buy one bottle a week at $10 to share with family members or friends. That's $520 a year. Add both amounts up, and the total is $2,345! That's money that could be paying down your debt or going into savings. And don't forget the health benefits. You probably have many other ideas on how to save money in the five areas. If it seems hard at times to cut costs in these places, remember one thing - you're on the road to keeping more of your money in your own pocket! As the old saying goes: "Money saved is as good as money earned".
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