Budget need not be an intimidating
word; it simply means putting your finances on a diet. Some need to shed more
weight than others, but the good news is that you control how your money is
handled.
Under the Microscope
Before any “cutting” occurs, one needs to assess his/her current situation. It is surprising how many people are not aware of how much their monthly expenditures are. A basic spreadsheet program will help organize categories and amount of monthly expenditures. Microsoft Word even has home budget templates to get started and to stay organized.
Create a category for critical expenditures; these are payments that must be made in order to ensure your health and safety. It would include mortgage/rent, insurances, food, electricity, water, clothing, and phone. A car might be a negotiable item depending on where you live and how you get from place to place.
A second category should be convenience expenditures; these are things that make your life more comfortable but are not absolutely necessary to sustain life. Items might include cable/satellite TV, internet, a gym membership, etc.
The third category is reserved for luxury expenditures; these consist of items that make your life more enjoyable. It might mean a boat, a pool, a gaming console, extra wardrobe items, a designer purse, a trip, etc. Do not forget to review charges put on credit cards.
Bringing Home the Bacon
Once the damage per month is tallied, evaluate what the monthly income actually is after taxes and be sure to include all sources of income. If the income fluctuates each month, then calculate on average. If anything comes in over that average, it can be put aside each month into an emergency fund. Keep in mind, it is recommended putting aside at least 3 months’ salary for emergency situation.
Trimming the Fat
Obviously, if there is more money going out than coming in, there is a problem. Providing some financial “wiggle room” should be the goal. Review how much is being spent toward each of the categories. Sometimes cutting corners in each of the categories is enough to maintain all of them.
Simple Tricks
Regardless of budget there are numerous painless ways to save money:
• Try more generic items on your grocery list.
• Conserve electricity by unplugging items when not in use.
• Carpool if possible to save gas. Ride a bike. Walk.
• Re-examine mortgage payments; pay weekly instead of monthly.
• Arrange to have bills paid directly from a bank account. There is less temptation to spend extra money if there is a threat of being overdrawn after bills are paid. It also avoids stamp expenses.
• Watch ATM use; some banks charge per transaction.
• Buy groceries where the store offers gas discounts for grocery purchases.
• Eat out less.
• If expenditures are necessary, consider online shopping. There may be no tax, free shipping, and gas money can be saved. There are also many discount codes found online that can be applied to purchases.
• Avoid carrying much cash; it will get spent!
• Designate a household jar for any spare change.
Finally
Re-evaluating and consistent monitoring is important. Awareness is half the battle. Save receipts; write things down; balance the check book more often. Set some goals each month, and make it a challenge in your household. Everyone should be included; in the long run, everyone will benefit.
About the author:
Jennifer Carrigan budgets like a madwoman. At the moment, while her car is in the auto repair shop, she makes do with public transit and her not-so-trusty bicycle.
Under the Microscope
Before any “cutting” occurs, one needs to assess his/her current situation. It is surprising how many people are not aware of how much their monthly expenditures are. A basic spreadsheet program will help organize categories and amount of monthly expenditures. Microsoft Word even has home budget templates to get started and to stay organized.
Create a category for critical expenditures; these are payments that must be made in order to ensure your health and safety. It would include mortgage/rent, insurances, food, electricity, water, clothing, and phone. A car might be a negotiable item depending on where you live and how you get from place to place.
A second category should be convenience expenditures; these are things that make your life more comfortable but are not absolutely necessary to sustain life. Items might include cable/satellite TV, internet, a gym membership, etc.
The third category is reserved for luxury expenditures; these consist of items that make your life more enjoyable. It might mean a boat, a pool, a gaming console, extra wardrobe items, a designer purse, a trip, etc. Do not forget to review charges put on credit cards.
Bringing Home the Bacon
Once the damage per month is tallied, evaluate what the monthly income actually is after taxes and be sure to include all sources of income. If the income fluctuates each month, then calculate on average. If anything comes in over that average, it can be put aside each month into an emergency fund. Keep in mind, it is recommended putting aside at least 3 months’ salary for emergency situation.
Trimming the Fat
Obviously, if there is more money going out than coming in, there is a problem. Providing some financial “wiggle room” should be the goal. Review how much is being spent toward each of the categories. Sometimes cutting corners in each of the categories is enough to maintain all of them.
Simple Tricks
Regardless of budget there are numerous painless ways to save money:
• Try more generic items on your grocery list.
• Conserve electricity by unplugging items when not in use.
• Carpool if possible to save gas. Ride a bike. Walk.
• Re-examine mortgage payments; pay weekly instead of monthly.
• Arrange to have bills paid directly from a bank account. There is less temptation to spend extra money if there is a threat of being overdrawn after bills are paid. It also avoids stamp expenses.
• Watch ATM use; some banks charge per transaction.
• Buy groceries where the store offers gas discounts for grocery purchases.
• Eat out less.
• If expenditures are necessary, consider online shopping. There may be no tax, free shipping, and gas money can be saved. There are also many discount codes found online that can be applied to purchases.
• Avoid carrying much cash; it will get spent!
• Designate a household jar for any spare change.
Finally
Re-evaluating and consistent monitoring is important. Awareness is half the battle. Save receipts; write things down; balance the check book more often. Set some goals each month, and make it a challenge in your household. Everyone should be included; in the long run, everyone will benefit.
About the author:
Jennifer Carrigan budgets like a madwoman. At the moment, while her car is in the auto repair shop, she makes do with public transit and her not-so-trusty bicycle.
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