Monday, September 14, 2009

Living on a budget

In today's economy many are playing it safe. Being careful about your money doesn't mean not spending at all. Not spending is the worst thing we can do for our economy. If no money is flowing, the economy worsens. So how do you spend without going overboard?

Set a budget. Layout your bills. Know what is coming in and out every month. Know your monthly pay then begin to list all you have to spend - mortgage/rent, utilities (electricity, water, gas), phone.

Set a budget for grocery shopping. Make a list of meals for the time period in which you are shopping. If you shop twice a month, you need enough meals for 14 days. If you spend what you need, you will get through the basics. In your grocery shopping cut those coupons. Check with your local store about price comps. Walmart is big about matching prices of other stores. Use your grocery list to shop through grocery store papers and coupons. Never ever go to the store hungry. If you are hungry you are likely to over spend.

Take that calculator with you every time you shop regardless of grocery or clothing. If you are keeping an accurate total (minus taxes) you will be aware of your spending and tend to spend less.

Still need help staying on track? Get gift cards. If you use gift cards to pay you can't go over. Having cash works for some but cash can be easy to spend. Before you know it, you open a wallet to not enough money.

Use gift cards for the extra spending you enjoy. I enjoy Starbucks. At $5 a pop that can get costly if I am not careful. On average I visit Starbucks twice a week. That is roughly $40 a month. If I only allow myself to use a gift card for my purchase I can't over spend. If I choose to go more than twice in a week I am quite aware that means 1 less coffee in a future week. What I find happens is I tend to think twice about my visits and spread them out giving me extra at the end of the month.

I really enjoy going out to eat. Lets say this month I don't have enough for a full dinner but I have enough to purchase a $25 card for next month. I do this each month and save up for a full dinner. Many restaurants allow you to add to gift cards vs buying a new one each time. Try this and see how you can eat out from time to time.

Another trick to save those pennies is always round up when balancing that check book. If you spend $17.63 cents, mark it down as $18. Some banks do this for you. My bank does not offer this so we have to take care of this on our own. At the end of the month we average saving $20 just on typical spending. Take that extra and move to a savings account. One you don't have easy access to.

With every paycheck, pay yourself first. I like to start with $25. I find it easy to work with $25 less each month. Move that over to savings. If it is gone before you start spending you don't miss it.

Join clothing swap groups in your area. This is a great way to exchange clothes for something new. This is great for kids. If you don't have one, start one.

Check sites such as to find the best gas price. Don't go out of your way. Look for typical routes such as a route to and from work. Don't bother going 10 miles to save three cents. No point in wasting gas when you are trying to save.

Have all those movie channels but rarely watch them? Get rid of them and use a services such as the red box in your local area ($1 a night DVD rental) or Netflix. Not only are you saving on the cost of dropping premium channels but you are paying lesser taxes. Even paying for a pay per view movie works out on average lesser than premium movie packages.

Do you enjoy visiting zoos and amusement parks? If you visit these more than twice a year check into annual passes. These cost more up front but you save in the end. This also allows you to enjoy more visits than if you had to pay for individual trips. Another great benefit is most annual pass holders get discounts such as food.

Have kids in school that take lunch? Are you doing this to save money or a preference? If you are trying to save money add up those numbers and make sure you are. We find spending $2 a day for school lunch is actually cheaper than the average $2.50 if he took lunch. Most times lunch taken to school is a sandwich (bread, meat, cheese, mayo), bag of chips, fruit, and a drink. Add in the average cost of Ziploc bags, paper bags or lunch bags, small thermos, cooling pack, it works out to a tad more. You may find you spend less on your child taking lunch but check the numbers. You may be surprised.

Before buying a new bottle of your favorite cleaning product, do they have refill bottles instead. Why pay for a new bottle when you can save by buying a refill bottle. Most times I personally find the refill bottle is roughly $2-3 more than the single purchase giving me a minimum of 25% savings.

Check that cell phone. Most people have a plan that is well above their needs. Make sure you are not overpaying for services you need. Not only check the minutes but check add ons. Do the same with your home phone. How many may have an answering service when they have an answering machine at home.

Cheaper is not always better. If you have to use twice as much toilet paper using the cheap brand vs the name brand, are you really saving. Don't be blinded that cheaper is better. There are times a more expensive brand costs less in the long run.

Buying bigger because it is cheaper? Think again. This past week I decided to buy 4 cans of ravioli. They had a choice between single cans and a 4 pack. It was $0.46 cheaper to buy single then the 4 pack offered. This is not uncommon. I have come across this frequently. You always assume it is cheaper and many stores count on it. Compare prices and don't assume.

There are several ways to live well on a budget. Remember a budget doesn't mean cheap it means frugal. Sometimes that means work but you can find great deals if you are willing to look. You can really save if you are willing to be aware of your spending.

1 comment:

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