Finance Tips » Bills and budgeting

14 Household Budgeting Tips

admin — Wed, 07 Jul 2010 08:38:56 +0000

1. Stay busy after work

One “easy” way to avoid overspending and thus stay within your budget is to have something else to do after work. Get a second job that is fun, go to school, volunteer or get into great physical shape. The more you do, the less you will spend!

2. Watch those miscellaneous categories

Make sure you have enough well-defined categories to capture your true spending. Putting too much into a miscellaneous category makes it harder to track what you have spent and harder to control, especially the splurges!

3. Need

If you did not know you need it, you probably do not. Do not buy things just because they are on sale. If you had no use or want for it before you saw it on sale, then you will have no use for it later.

5. Don’t Forget to Budget for Special Occasions

When forecasting your expenses, remember to include gift-giving occasions. Mother’s Day, Valentine’s Day, birthdays, Christmas, and anniversaries are good examples. If you plan to spend money on these occasions, remember to include this in your budget.

6. Don’t use a debt to get out of another debt

Do not take out a consolidation loan to pay off your other debts. The point is to get out of it, not to squeeze them together and end up paying interest on the loan while paying off your debts. Try consulting a “free” debt counselor service first.

7. Remember To Budget Time As Well

We have all heard “time is money.” Well-spent time can be an investment. Take a few minutes to plan ways to save on bills – 15 or 20 min. researching lower rates on electricity or long distance can pay off. You will know when time spent is not worth it.

8. The envelope system

Total yearly/monthly bills, divide each into 12 months. Divide monthly amount into bi-weekly payments. Use envelope for each bill; put in cash every 2 weeks. Use only the cash in envelope till it is gone. Do not touch your account/debt card! Envelopes ONLY!

9. Good teeth cheaper

You can go to a dental school to have your teeth cleaned, filled, orthodontic work done, etc. The cost is approximately half what you would usually pay. Note: Make sure you have some extra time as this takes a little longer.

10. Avoid expensive friends

Avoid friends who want to go for drinks all the time or suggest an evening at home. The money you spend on drinks and snacks, can buy something better, or go into your savings account. Also avoid friends who want to have supper at your house because you are a “good cook” what that really means is that they are saving money while you are grocery shopping.

11. Keep Track of Your Expenses on a Daily Basis

I call the bank’s automated line and do my banking every single night before I go to bed. I can see what checks and/or debits from my debit card are posted and what my running balance is. I compare with what I have in my checkbook or with receipts. This only takes about 10 minutes. Often people get into trouble when they try to keep a running total of what they have left in their head and get into trouble.

12. How To Live Within Your Budget

Organize, budget, and beat stress.

13. Know what you spend

Establishing a budget, and periodically entering all of your purchases into money managing software, should take the guesswork out of your finances. At the beginning, minor changes will most likely need to be made to your budget. Once you have a finalized budget, one person should be responsible for maintaining the budget and tracking finances. I sit down with my wife on a monthly basis and go over our financial results. If we are close to exceeding a budget line item during the month, I will tell my wife and we adjust our spending accordingly.

14. Cut down on interest

With bills happening throughout the month, people can find themselves poor one part of the month, and rich during the other. My bank offers free online bill pay, so I take all of my bills, and divide it by 4. I then pay weekly, so I always have the same spending cash each pay check. It also cuts down on the interest that accrues.

How to Write a Budget – The Best Way

admin — Tue, 22 Jun 2010 23:46:12 +0000

Are you trying to set yourself up on a budget so that your financial life is easier for you to manage? Do you want to know where your money needs to go each month so that you can plan correctly and take care of all your expenses? There are a few different theories when it comes to how to write a budget, but there is only one way to make sure you are not surprised by expenses you do not think about. Here is the correct way to write your budget.

You need to start with all of your expenses. This means you need to get a list of everything from your utility bills, mortgage or rent, car payment, insurance, to your license fees, car registration, oil changes, Christmas spending, birthday spending, and everything else in between. Anything that you spend money on in a years time needs to be included in your budget. If you forget about the quarterly or annual expenses you will be surprised by them and it will throw your budget off.

Next, you need to weigh your expenses against your income. Break any expenses that are not monthly down into monthly expenses to make it easier to work with. Then, you need to add them all up and subtract them from your income. The amount you have left is what you are allowed for savings, entertainment, and other things that are not necessities for your survival.

If you are not happy with the amount that is left over, then it is time to look at your expenses closely and figure out what you can live without. You might have cable television just so you can watch one show a week. Maybe that show is offered on the internet for free. Maybe you barely ever watch your television and that is an expense you can throw out. There are many other needless expenses that are usually in our budgets. Take a close look and eliminate anything that is not necessary for you.

Last, you need to figure out how much you are willing to waste on entertainment each month. This is your nights out, your movie rentals, and other things we do for enjoyment. There are many ways to make cuts here and still have a great time. You also need to figure out how much to save for general savings, vacations, emergencies, and other things you might be saving money for. This is how to write a budget the correct way and make sure you do not leave anything out.

Your Personal Financial Budget – The Real Purpose is to Save and Build Wealth

admin — Mon, 21 Jun 2010 20:54:52 +0000

A personal financial budget is a money allocation plan which is part of your financial plan enabling you to outline your financial goals. Establishing a personal financial budget is not difficult and has tremendous payoffs. You can better establish and regulate your financial resources, set and achieve your financial objectives, and make advance decisions as to how you want your finances best to function for you.

The main idea in creating a personal financial budget is to put aside a certain amount of money for expected as well as unexpected costs, based on previous expenses and bills, as well as define savings amounts in its optimal state. It therefore enables you to position yourself to build wealth in the long-term. In order to create a useful personal financial budget as part personal financial planning you must do the following:

Step 1. Determine how to allocate your compensation by first identifying your spending habits. Define fixed expenses (e.g., home, auto, utilities, insurances, etc.) thoroughly for a month and write everything down and add it all up. Even if your utilities fluctuate a little you can estimate the cost after an average month. Through proper determination of your “spending patterns”, you can immediately identify solutions for creating an effective personal financial budget for your needs.

For instance, when you have a steady monthly net income (after tax take home pay) of $5,000, you should subtract all of your identified monthly expenses from that income – making a list of the regular monthly amounts. Spreadsheets are often useful for keeping track of this information. Many people often create an excel spreadsheet budget to track expenses. There can be benefits to creating multiple year personal financial budget plans.

Step 2. Next, assess other bills, like those that may occur periodically during the year. These can be estimated and then subtracted from the amount of your income. You have one of two ways of doing this. The first way is to compute the total for a year, divide the total by 12, and subtract that monthly amount by putting the money into savings to build until you need it. The second way is if you have enough surplus you can just budget the full annual, semiannual, or other bill in full or in some other payment arrangement.

Step 3. The balance that remained after fixed costs can now be budgeted across miscellaneous household expenses and savings. Budgeting for savings is often overlooked and therefore often will not get done. A short-term 2-5 year savings goal needs a minimum 2-year personal financial budget plan so you can see where you are going. A short-term impulse buying view is often what prevents people from accumulating savings and building wealth.

Step 4. To best determine how to ensure you contribute to savings, you can do this one of two ways. You could use dollar amounts for a group call miscellaneous like gas, clothing, entertainment and groceries. Some people promote using proportions or percentages. But think about it, if your income increases, does that mean your miscellaneous expenses should or should your savings increase instead? So, using dollar amounts instead of percentages could be advantageous to your savings goal.

Step 5. Ideally you have a minimum of 3 cash or banking accounts. These expenses should be allocated across 2 checking accounts – the first for paying bills and for transferring money to at least a second checking account and one savings account ( if you do not have direct deposit across all of these accounts). The second checking account would be for your household, miscellaneous, spending money and not the recurring bills. Then a third short-term savings/emergency account (later adding longer-term savings accounts of course) but these are beginning steps that many people never put into practice.

These are ways to establish a basic financial plan and to prevent usage of non-allocated money for miscellaneous or impulse expenses. These are beginning steps that many people never put into practice that are beneficial and can be built upon, for long-term financial planning.

Do You Know How to Create a Budget? Try This Monthly Budget Planner

admin — Thu, 17 Jun 2010 02:16:46 +0000

Many people would like to be able to create a budget. But it can seem like one of the most difficult things on the planet to accomplish. By understanding how to create a budget, you’ll be more in control of your finances. Use these 3 steps below to make your own monthly budget planner.

1. Create a list of your monthly income.

Be sure to include all sources of regular income, including part-time jobs. Add up your numbers and write them down.

2. Determine monthly expenses.

Make sure to include food, gas, clothing, utilities, and housing costs. If you’re not sure how much these are, just save your bills and receipts for the next month and you’ll have a more accurate idea.

3. Figure out if your monthly income is enough for all of your outgoing expenses.

Are you making enough meet all of your monthly obligations? If not, then consider reducing expenses in certain areas. One of the biggest areas where people can save money is in entertainment and eating out.

Also, ask yourself if you’re really using all of those services that are part of your monthly bills. Do you really watch all of those T.V. channels? How many unread magazine subscriptions do you have around the house? You may be surprised to find out how much extra found money you can come up with.

After you figure out you income and expenses, then it will be easier to create a budget.

Start estimating how much your bills cost during the next month. If you’re not sure, save your bills and receipts for one month to get some solid numbers of how much your spending. Making a budget in an ongoing learning experience will take some time to perfect. Just stay with it for about 3 months and you’ll be in charge of your money. Isn’t that the way it should be?

Budgeting Secrets For Newbies – First Things First

admin — Wed, 16 Jun 2010 08:30:51 +0000

Most people want nothing more than to be able to effectively manage their finances. After all, Joe Public works hard for the money and hates to see his money going towards things that don’t further his financial objectives or build his future. This is the reason Joe needs to budget but he also needs to teach his family about the necessity of budgeting as well.

If the Publics execute budgeting strategies effectively, this should help them to see where their money is going. They will begin to get more bang out of each buck that comes into their home and their savings and future family goals and dreams will start to take form.

5 Essential Steps to budgeting secrests for newbies:

1. The first smart thing to do in budgeting is to set a goal. You have to determine what you want to achieve? Is your desire to be able to pay your monthly bills on time? Do you want to buy that hot new plasma or do you need a new car? Goals help to shape your budget and budgets help to best serve your interests.

2. Jot down daily spending in a pocket notebook. Write down what you spend your money on. This will help you know without a shadow of a doubt where your money is going. This notebook should include every little expenditure that we likely never track like, snack purchases, trips to the local ice cream shop, the Friday night video rental and so forth. Don’t forget to track these forgotten miscellaneous purchases religiously. This is the only way you will be able to stop, cut and drop little purchases that add up to big money drains at the end of each month.

3. Identify your regular expenditures. Take into consideration what you need to do in order to cut waste out of your budget all together. Your daily caffeine fix and your daily paper may be costing you an estimated $3500 per year. Over a ten year period that is $35,000. Now you may love coffee but if you are going to invest in it that much, it should be paying you some sort of interest shouldn’t it?

4. Jot down the amount you earn and compare it what you are spending. Create a system that works for you and will help you keep track of your monthly budgeting progress. You can make use of computer cash management programs, or download a basic money management spreadsheet online.

5. Forget about the Jones’. The Jones have it all because they can really afford to by it. As their neighbor we sometimes find ourselves trying to do what they do because of image of success and happiness they seem to project. This behavior causes us to reach or qualify for monthly payments that help us to feel good about our new plasma tv or car but when the payments start to weigh in on our budget, we find it hard to cope sometimes.

In order to be effective in budgeting secrets for newbies, we have to remember the long term objectives and forget about the short term payoff. Spending a chunk of our money on things that depreciate in value and don’t progress our current financial standing is just financially immature.