Making a Budget Stick
Budgeting is like dieting, people always start out with good intentions but often fail to see it through. One reason for this is unrealistic expectations. The best way to budget is to make it a life change by doing a lot of little things to save money and live within or under your means.
One problem I have noticed is debit cards. Yes, they make life easier, but people no longer keep track of everything in the bank account. With checks you saw the money coming out of your account with each purchase, at least if you kept a running balance in your checkbook. If you aren’t keeping track of what you make and what you spend, you will be more likely to run up excessive fees for overdraft or other bank goodies. One way to avoid this is to create envelopes.
Envelopes? Yes, when you deposit your check, take out your money budgeted for food, groceries, and other items you usually purchase with your debit card. Put the amount for each category into an envelope and when you go to the store, don’t take your debit card. Instead, take only your envelope so that you can’t spend more than budgeted. This way, when you are tempted to purchase those chocolate chip cookies and the roasted chicken, you will have to decide what you can really afford and which item you can live without.
As an added bonus, put all the money left in the envelopes at the end of a month in a special savings account to save for a rainy day and watch the funds grow.
Live as if you’ve already lost
This may not seem like the best of advice but in these tough economic times it may be the best advice. Live as if you’ve already lost, means that you should live your life as if you have lost your job. Living as if you have lost your job may help you get through some tough times.
To live as if you have lost your job you must cut out everything you can. You may be surprised at how much money you can save if you cut back on everything but the essentials. If you can cut everything for three months you may even be able to save up a three month emergency fund. You should also try to pay off as much of your credit card debt as you can.
By paying off as much of your credit card debt as you can then if the worst happens and you do lose your job then you will not have those payments. If you keep your job then you will get to feel the joy of being the only person you know without credit card debt. You could then use the money you were sending to your credit cards to pay down other debt or put it into a retirement account. The same is true of the money you save. You will be proud that you saved what you could if you do lose your job or you will have a nice little nest egg for when the economy does turn around.
Live as if you have already lost and you may find that you really win.
Simplify the expenses in the house
Saving is a keyword to survive the economic crisis. For the household in-charge, it’s hard to do the budgeting. But what can we do? It is best to simplify things. Make a substitution that will not sacrifice the usual goods we use. Instead of buying branded ones, let’s switch for other quality and cheaper brand. Sometimes, groceries offers promos in the store that can be convenient for our expenses.
Segregate and organize our used goods. Be creative to use those products in different way. Like in cooking, having stocks of flour and eggs can come up to a bread. Baking soda can be used in baking and also as a cleaning materials. There are lots of things to do to save. Just simplify and still enjoy the luxury of living the life we used to have.
Avoid Debt
Sometimes it’s hard for us to budget our income. Especially, the high prices of goods and fares in our economy. There’s no chance in buying things that are not useful. We focus more on meeting our neccesities. But what can we do? Budget. Yes, we can have it but unproper way can lead us to more debts.
Let’s avoid debts. As much as possible let’s just buy things that are consumable for longevity and practical. Let’s focus on meeting our needs like foods and home goods. If we still have good clothes and shoes, we can set buying this aside. If we are meat lover, why not try eating fish and vegetables. It is cheaper and nutritious.
Let’s avoid using credit card when we still have previous balance. Let’s pay first the previous one before making a new credit. Through this, we can avoid paying higher interest for the long time.
Be a smart spender.
Save Money on Summer Vacations
It’s summertime and you may be thinking of how you can get a break from your daily routine and go on vacation. With the cost of gas, it may seem impossible to travel.
One way you can still have a vacation, but not spend a fortune, is to vacation close to home. A vacation is about relaxing and having an enjoyable time alone or with your family.
You could even rough it and go camping. Surrounding yourself in nature is one of the best ways to replenish. Enjoying good conversation around a fire and having some S’mores and other good food would be great fun.
You might be able to find a Bed and Breakfast in the country to stay for a couple of days that has many interesting places to visit.
There are probably many places in your state or province that you haven’t seen. Think of the atmosphere you would enjoy. Set a budget within your means and make plans for a vacation close to home. It’s much better than not vacationing at all because of the enormous gas prices.
Saving Money: Try Used Instead of New
We all like the idea of purchasing something new at least once in a while. But, when trying to save money we should look at every way to do just that. It’s very possible to get needed items in very good condition, although used.
Suggestions for buying used:
Furniture - look in classified ads or advertise for what you need. Yard sales, estate sales and flea markets are also a good place to look. Ask around. A friend or family member may have just what you need, but don’t want the item any longer. This helps both of you.
Clothing - thrift shops are becoming more popular and often have nearly new clothing that is inexpensive. Sometimes you can find clothing that still has the tags on them. You can also find good clothing at yard sales and sometimes flea markets. Buying nearly new and inexpensive clothing can save bundles, especially when buying for children.
Children’s outdoor toys - children outgrow toys just as they do clothing. Ask friends who have children if they have toys their children have outgrown that you can buy. Yard sales are also a good place to find good used toys. Outdoor toys are usually very durable and can last through several children. You can buy them used for half and sometimes much less than the original cost.
Freecycle groups - in my area there is a freecycle group where members can post what they have to give away and what they are in need of. No money is exchanged. Those that want to get rid of something, gets it hauled away free. Those that are in need usually get what they need.
There are many other items you can buy used. Some specific items you may not want to buy used, but in general, you can save a lot of money by looking around to see what’s available before buying new. Browse around before spending more than you need!
Electricity…or Solar
Okay, I believe that electric power and other forms of help for living are ones that should not be abused. In the case of electric companies (whichever yours may be), I doubt very seriously that is happening.
So, here’s the history behind electric companies. It was in the 1970s / 80s that solar became a decided source for power. However, the government messed with the energy corporations and called an energy crisis (don’t ask me dates) around the same time. The reason being, they saw the solar power being an option and realized that if this happened… no one would have to continue paying the money to electric companies… and they would loose money.
Over a period of time, the idea of solar became one that was “too expensive to afford,” “one that hadn’t been developed” and was swept under the rug. However, despite popular belief, it actually works BETTER than electricity.
The problem really was, the corporations and the government didn’t want to go out of business or loose money, so they created a cover up to keep everyone paying. Let’s take Excel Energy, the energy company in my area. Did you know that even a small apartment can expect to pay between $50 and $75 a month? it’s completely ridiculous. And, you have no control over it.
You would think this would be fair, but basically, they are controlling what you do with your electricity. They jack their prices up, they threaten to turn off your electricity if you even fall a little bit behind and…trust me… they are not very good at working out payment plans. I can’t tell you how many times they have screwed up my bill because of stupidity or because they wanted to jack my prices up.
So, here is how you deal with your electric company, especially if it is Excel. Make sure that you are caught up or no more than $150 behind (that’s most likely one month if you have a home). Then, stay on a payment plan and a little ahead of the bill. The next step is to try and get into alternative energy…meaning solar power.
There’s two types of solar power that you can get, and depending on the size of your home, you won’t need to pay more than $15,000. The advantage of this is that it can be divided into payments that is the SAME AMOUNT as a company like Excel per month. Meaning, you can make the transfer, pay off the solar, then you will never have to worry about it again. You will have maybe a 5-10 year payment and investment and can stop paying into a hole that won’t let you be freed of the threats from turning your electricity off.
Work with Creditors and Cut Back
With the economy going downhill and difficulty getting a paycheck, it can be hard to fix finances. One key thing to remember when you are living paycheck to paycheck, is to work with your creditors. Many of them will work with you to make a partial payment. Even if you pay just a few dollars on the debt, that is better than nothing. It shows them that you are really trying.
Cancel anything that is not absolutely needed. If you have multiple credit cards, cancel all but one. Focus on paying off the other cards and then cut them in half. Make sure to send a written letter to the finance company or credit card company to let them know of the cancellation.
Do you really need DVR service? Do you really need that extra tier of cable service? Could you do without the call waiting, extra minutes and unlimited text on your cell phone for a couple of months to get caught up on bills? Look closely at what you spend on and think of ways to cut. Cutting out expenses will help the most for fixing finances. Living within your means and taking steps to get out of debt, not only creates a better financial situation, but often a better and less stressful lifestyle.
Retirement Planning to the Future
With the state of the economy, it is imperative that you think about retirement planning. Retirement planning is the way of the future. It is important to think about your retirement planning so that you are ready for the future when it gets here.
Put money aside each day. There are little things that you can do without daily that could be set aside for retirement. If you put just a little bit back each day, the amount will greatly increase.
Build your savings account. Do all that you can to build your savings account. When the savings account gets big, invest in a certificate of deposit. Move from there to an IRA or annuity plan. You can save without having in risk involved with your money. This is a great way to fix your finances for the future.
Consolidate Bills to Fix Finances
There comes a time with the poor economy that many people are facing challenges paying their bills. Credit cards are mounting up and the bills just seem to get larger and larger. One option that you might consider to fix finances is to consolidate your bills. Consolidating bills can be a terrific way to get our of debt.
If you have poor credit, you can consolidate bills. This will give you a lower interest rate. Some of your bills will be completely paid off and start to have time to improve your credit score. Just be certain to pay the monthly payment on the bill consolidation on time. You’ll find that you pay less in the long run and often can make lower monthly payments to help you get ahead.