How Do You Look at Your Budget?

I was at a finance committee meeting the other day and I kept hearing the group leader say that we could always come back to the budget later and adjust the budget up or down as needed.  He stated that the budget was just a guide to how money would be spent.  I almost cringed when he said that, because I would hate for people to use that thought process when planning a budget for their family.

budget editedphoto credit

I’m not telling you that you cannot adjust the budget as you go, because you will have definitely do it when needs arise, but I think a budget should be set with the mindset of getting it right.  If your goal was not to get it right, then what motivation would you have to even try to get it right?

How do you look at your budget?  Is it a guide?  Or should you consider it a map?  To me a guide is a suggestion on how to use something where a map tells you where to go and how to get there.  I personally think a budget should be more like a map.  It tells you where the paycheck needs to be spent.  It may have a few different paths, but it will take you to the same place.

I look at the different paths as the changes you may need to make along the way.  You may pay off a bill or get a raise, which would require a different path on the budget.

The key to getting a budget right is to look at your previous expenses.  Plan your budget according to what you have been spending as well as the needs in the future.  When I think of this way of planning I think of Christmas.  It happens every year on the same date, but many of us still end up wondering how we will be able to afford gifts, food and travel. We wait till the last minute.  Why not plan for Christmas all year long by setting some of your budget aside each month?  You could do the same thing with a clothing budget, taxes or any other expense that occurs less than monthly.

A budget is definitely not easy, which is why many people do not have one, but it’s not rocket science.  Those that choose easy will remain broke, while those that choose to do a little work will reap great benefits.

If you do not have a budget, take some time to get started on one.  You will be so happy you did when you can finally see where all your money went for the month.  Try to get the amounts right at first, but yes you can always adjust them as you go.  The main thing is to use this budget to tell you where to spend your money each week/month.

Spend all the money in the budget.  Tell it all where to go down to the last penny.  This means that if all the bills are paid and you still have money left, you must include a line in the budget that tells you where that extra will go.  (savings, emergency fund, debt reduction)

If you have a budget and find yourself out of money before the bills are all paid you may need to review your spending and either adjust the budget or adjust your behavior.  Many of these ideas presented will help you revamp your budget.

Here are some things to remember when planning a budget:

  • Spend all the money down to the last cent.  Savings, debt reduction, emergency fund, new car fund etc. should all be part of the budget if you are able.
  • Be realistic.  Make your totals reflect what you actually spend.  Ignoring the daily convenience store stop that costs you $4 each day on your way to work could cause you to come up $80 short in your budget if you do not include it.  Being realistic will help you see the things that need to change.
  • Make the budget before you get the money and before you spend any of it.
  • Don’t forget to include all the essentials first, then if you have room; include items like savings, clothing, and gifts.
  • Pay non-monthly items monthly.  If you normally pay your car insurance every 3 months, total up the amount for the year and divide by 12.  Put the amount you get into the monthly budget.  Then you can put this amount into a separate account until it’s time for it to be paid.  (online banking is great for this)
  • Stick with it.  Be consisitent, be persistent.  If there is no money to attend a particular event, then just stay away.
  • Surround yourself with people that have the same goals and values.  If you have a friend that continually causes you to oversend or attend events you cannot afford, it would be best to keep a safe distance.  Those that make fun of your new life are most likely the broke ones.  They just hide it well.
  • It’s easier to pretend there is not a problem.  Face your fears head on and take control.  You will be so glad you did in the end.  Continually pretending that your budget s fine leads to serious problems down the road.

How do you look at a budget?  What issues do you have with your budget?

Have any questions or comments?

making a habit out of living frugal…..

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When Murphy Comes To Visit

If you are familiar with Dave Ramsey, then you may know that Dave says you should have an emergency fund because when you start getting your finances in order and work on getting out of debt, Murphy is going to visit.  Murphy just can’t stay away!  Murphy is such unwanted company!

Murphy's Law

I think Murphy has come to visit us again this week.  Big girl was home this weekend and on our way to church Sunday her small SUV started shifting hard into second gear.  Then the OD light started flashing.  Of course, Murphy was on the way.  As usual, he was uninvited.

Immediately we stressed a bit.  Just a little bit.  You see we are a 4 car (paid in full) family. Big girl drives the newest vehicle.  I drive the biggest vehicle and my dear hubby drives the oldest vehicle.  We have had his truck since it was brand new, which was right after we got married, which was exactly 22 years ago today.  Yeah, thanks for the anniversary gift Murphy!  Wonder about that 4th vehicle?  It’s the just in case vehicle.  Just in case one breaks down.  We live 30 miles from our jobs and we don’t have family we can just borrow a car from.  So we have an extra car…… usually.

Sometime around Christmas the power steering pump went out on this 4th car.  I told hubby to just wait till after Christmas to fix it.  So this past week he bought the part and was going to put it on this weekend, but found out he needs a tool he doesn’t own to put it on.  It’s not an expensive tool, he just has to get it.  So big girl has vehicle number one, hubby has vehicle number two and three and four are out of service.  Not the end of the world.  He will get the fourth one fixed on his own.  It’s big girls vehicle that presents the problem.  It’s that gift that Murphy brought.  It’s those words you never want to hear from a mechanic ….. it needs to go to the transmission shop.  Somebody hold Murphy down cause I want to kick his tail right now.

So what do you do when Murphy comes to visit?

First you need to try not to cry.  I know that sometimes it just happens, but it’s not gonna do anything but scare everyone in your family.  The kids will think they are gonna starve to death!  Instead, remember that you have so many things to be thankful for and crying just won’t fix it.  Try prayer and quiet time.  Pray for help and wisdom to deal with the situation.

Take some time to think about what you need to do and how you will accomplish it.

Do you need to come up with money?  How will you do this?  What can you do to get some money?

The most obvious thing is to have that emergency fund, but what if you need more than that or haven’t had a chance to fund it yet?

Plan how you will get by until you can get the money for your expense.  Many times you will find that you can make do just fine for a bit, it’s just not as convenient.

Maybe it’s something you can fix, like my washer repair.

Maybe you can eat from the pantry and freezer for a couple of weeks or more.

Plan very inexpensive meals to lower the grocery bill if you can’t eat out of your pantry.

Buy nothing.  Basically this means you pay bills and buy food.  No extras.

Sell some things on craigslist, ebay or post some pics in an album labeled for sale on your facebook page.  Remember not to seem desperate as people can sense that and tend to take advantage of those in need.

Count your change and add up money you have saved.  It might surprise you to see how much you have.

Work some extra shifts.  Babysit for someone in need.  Get creative.

Do you have an extra check coming?  Maybe there is five Fridays this month or instead of getting paid twice this month, you get 3 checks.

Have you filed your income taxes yet?  Maybe you will get a refund.

Whatever you do make sure you take the time to think about what you will do.  Take the time to think about the best solution to your problem.  Don’t just make hasty decisions, because they could cost you even more in the long run.

Most of all ….. don’t run out and buy a new car, because Murphy still exists!  Then all you have is a new car payment and Murphy hanging around.  Instead, work on that emergency fund.  Sell items around the house that you no longer need.  Save a little out of each check.  Work extra so you can save more.  Find more ways you can save money.  Get that emergency fund up to par so that you’re ready for Murphy, because Murphy is always around.

Because I am real I wanted to share with you that we all have trying times.  How you deal with them matters.  We think best when we are calm.  We can handle things better with a little extra help (prayer).

So come back later this week to see how I dealt with Murphy.

How do you handle emergency or unplanned expenses?  Have some tips you would like to share?

Making a habit out of living frugal…..

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30 Ways To Save Money In 2013

Want to save money in 2013?  I have 30 ways you can save money to help save for your goals.  Maybe you have debt to pay off, or you need to fund an emergency fund or just want to save money.  There are many things you can change or implement that can help you save money.

Save Money
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  1. Drink water – forget expensive juice and sports drinks, water is free and healthy.
  2. Cut out paper products – paper products are expensive and are just going to get thrown away.  Why not help the environment while saving money and just use the dishes you have.  It doesn’t cost very much to wash the dishes or run the dishwasher.
  3. Try your hand at cloth diapers.  I wish I had been more frugal and educated about using cloth diapers when mine were little.
  4. Use cash – using cash lets you actually see how much you are spending.  When you just swipe that plastic debit or credit card, you don’t really realize how much you are spending.  It’s just harder to give up cash.  Don’t just get a bunch of cash out of your account, get enough to fund the categories in your budget where cash is feasible.  Put the money into an envelope for each category and only spend it for those things.
  5. Stay home – without the temptations of shopping sales, windows etc, you will ultimately save money.
  6. Unsubscribe – do you really need to get those sale alerts for those stores in your email?  It’s just really another temptation to spend money.  If you need to buy something in the future, you can check out retailmenot for printable coupons and online codes.  You can also check stores websites before you go.
  7. Get organized – how many times have you bought something because you thought you didn’t have the item and then wound up finding it later?  Getting organized will help you find things you already have, find things to get rid of and find things you no longer use that you could sell.
  8. Meal plan – just walking into the store and buying groceries without a list or plan is just a recipe for budget disaster.  I am sure there are a select very few that can go without a list and come home with just the items needed for a week of meals, but chances are you are like the normal shopper, you need a list and a plan.
  9. Freezer cooking – freezer cooking allows you to have meals made up and in the freezer ready to be cooked.  It’s a great way to ease the stress of busy days and nights we often have.
  10. Minimize your food waste –  use up what you have.  Cook only what you need or freeze the rest for a later date.  Make it a goal to not throw food away.  If you have leftovers in the fridge, eat them tonight instead of cooking something else.
  11. Use coupons – use coupons for items you already buy.  Check out my series on coupon use
  12. Ad match – instead of going to 3 or 4 different stores to get their great deals, you can go to Walmart and add match.  Be sure to read the ad match policy.
  13. Buy in bulk – you can buy items in bulk and split with a friend or freeze for later.  Just make sure it’s items you will use.
  14. Combine your errands – make one trip out if at all possible and get everything done while you are out.  This will save quite a bit of gas money over the course of a year.
  15. Make do – make do with what you have, make it work, can you go without?  Do you really need that new item?
  16. Buy used – if you find you really need something, consider buying used.  Shop thrift stores, ebay, craigslist and even tell friends what you are looking for.  Often times your friends may know someone that has that item to get rid of or even has one of their own to get rid of or lend you
  17. Keep lists – keep a notebook of lists of things you need to do, things you run out of and anything else you need to remember.  Keeping good notes (and having it with you all the time) will save you money by not making multiple trips as well as help you be more organized, which also helps save money.
  18. Make your own – have a bread machine?  Make your own bread.  Like Starbucks?  Learn to make your own at home.
  19. Make your own snacks – make homemade snacks (they are most likely healthier without all the preservatives) or bag your own small bags with a bulk bag and sandwich bags.
  20. Sell things you don’t need or use – try ebay, craigslist, facebook or a local means of selling.  Why not make some spare cash on things you don’t need at the same time as reducing clutter.
  21. Sell on Etsy – Have a craft you love to do?  Sew?  Knit?  Make t-shirts?  Invitations?  You get the point.  Etsy is a great way to sell handmade items.
  22. Have a yard sale – this is another great way to make some cash.  I would check potential big ticket items on ebay to see what they have been selling for before selling at a yard sale.  To check what items have sold for enter the item in search box and hit enter.  On the menu on the left of the page under “more refinements” click “show only” and then chose “completed listings”.  You would be surprised what items sell for.  Especially the things you think are worth nothing.
  23. Eat before you shop – going to the store hungry is bad for the budget.  You will buy things you don’t need or really want, but bought because you were hungry.  Eat before you go and carry a water to drink.
  24. Shop with a calculator – use a calculator so you know what you are spending or at least round the item and keep a tally on your list.
  25. Stop bribing your kids – kids don’t need a toy or candy every time you go to the store or every time they were good somewhere.  They are supposed to be good.  If you want to buy a treat, let them pick a piece of fruit or yogurt.
  26. Re-purpose and reuse – can you use something else instead of buying new?  Think outside the box.  Many times the best things come from outside the box thinking.
  27. Fix it yourself – try researching on the internet the problem you are having and see if it’s something you can do yourself.
  28. Buy out of season – buy a few key items of clothing for next winter while things are on clearance.  You can still find plenty of summer items on clearance right now too.
  29. Divorce the Jones’ – you don’t have to have everything everyone else does.  You don’t have to have the debt they do either.  Hang with people that have the same frugal values as you, or someone that can help teach you a bit about frugality and budgeting.
  30. Plan your budget – You need to plan where all your money will go each and every month.  No dollar or cent should be left alone.  For more on budgeting see my Creating A Budget Series and this recent post.

I know many people will read this list and think that these things may only save or make a little bit of money.  The truth is that small changes in a a few areas will add up to big amounts.  If you sold $300 at a yardsale, $300 on ebay and then made 10 other changes that save you $50 each over the course of a year, that’s over a thousand dollars.  Chances are you can do much better than my example.

In the next couple months I will be taking many of these items one at a time and breaking them down and really explaining them.  I hope you will join me for this new series called Practicing Frugal in 2013.

How will you save in 2013?  Have any questions or comments?  

Making a habit out of living frugal…..

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What will you be saving for?

Recently I talked about the goals we have for 2013, which included a few financial (saving) goals. In those financial goals we want to save for a couple trips, some home projects and big girls housing at college.

I didn’t include it on the list, but I also save my rebates and any found money for our fun account.  This fun account pays for things like our zoo membership, field trips, clothes for the girls, craft supplies or whatever we want to do with it.  It’s not always a large amount of money, but it is enough to do some fun things.  The girls love to get involved with how much money is in the fun account.  It’s a bit of a learning experience for them.

What is found money?  Found money is money I was not expecting.  It could be money I found in a jacket.  It could be money I received for reselling clothes or money I made selling things on ebay, or just a check in the mail from our electric cooperative for the previous year’s overpayment.

Save Money
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Do you wonder just how I am going to meet those goals?  What kinds of things will I do to save that money?

Today I am going to tell you my plans for adding money to these accounts.  Starting at the beginning of each month I will then update you on how I was able to do saving for these goals and any spending I did for these goals:

  • Trip Savings
  • College Savings
  • Home Projects
  • Fun Account

Things I will do or Ways I Plan To Add To Savings

  • Excess money on my hubby’s weekly paycheck
  • My monthly earnings from my very part time job
  • Rebates
  • Found Money
  • Ebay Sales (as I declutter the house I find more things to sell)
  • Consignment of clothes
  • Limit eating out
  • Continue to save money on groceries with meal planning, coupons, sales, stockpiling and homemade
  • Buy used whenever possible
  • Tax Return
  • Fifth Friday checks
  • Sell some large items we are looking to get rid of
  • Try lowering some of our monthly bills (satellite, phone, insurance)
  • Conserve energy (hang more clothes, turn off and unplug things not using)
  • Monitor our spending regularly so that we can make the changes needed

What are you saving for?  How will you save money for your goals?  Need some help? Come back tomorrow to see more ideas to help you save money.

Making a habit out of living frugal?

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Frugal Day Out

Next week we will get back to our regular weekly post, but for now a little look at the frugal day out I had with k and little princess yesterday.

We enjoy having days out shopping, but unlike may people that may spend hundreds of dollars, our trips are usually quite frugal.  It’s like a challenge for us to see how much we can get with a small amount of spending money.

We live far from a variety of stores and a large library among other things, so we tend to batch our trips into one long day.  I often include something the girls want to do as well.  We bring water, snacks and something to occupy the girls while driving.  This ranges from books and coloring books to a kindle and ipod.

Our first stop yesterday was a trip to Savers.  We have two Savers in Little Rock, but we usually have better luck finding good things at this particular one.

Like this food mill.   

I didn’t buy it as I have something I use like a food mill, but if one was in the market for a food mill.  There it is.

I also found this greatly overpriced piece of decorative wrought iron.

It was very pretty.

And I love wrought iron, but not at 17.99.

The girls found some books that they wanted.  Our Savers has books buy 4 get 1 free.  We got 5 books in very good condition for $ 2.98.  Less than the price of one new book.

The girls love going to Savers.

We followed our stop at Savers with a visit to Sam’s.  We had lunch and dessert at Sam’s for a whopping $8.21.  We love to eat at Sam’s and see how low we can get our total.  It’s a great place to get a bunch of samples too.  We bought a new book on sharks in honor of shark week for $5.38.

We then made a stop at the Little Rock Public Library where I needed to pick up some books on hold.  We then went to the children’s floor and the girls picked out books and a couple movies.  Can you tell the girls love books?

Next stop was Hobby Lobby where we spent $0.  We were looking for a map of the world for our living room wall.  It will help us with our homeschooling, but we were looking for one we thought would go best with the colors in the room.

We finally found the map at our next stop at Barnes and Noble.  It was not quite a frugal purchase at $27.11, but it’s exactly what we wanted and it will go well with our decor.  It is a higher quality map than many of the ones we had been finding.  Sometimes you need to spend more for quality and for things to last longer.

On to Kroger for some great deals and a start on our groceries for the week.  (more on that Monday).  Oh yeah, and some more samples!  Fruit this time.

Next a quick stop at Whole Foods for some free lunch meat I had just received coupons for.  I just love Whole Foods.  My kids once again got many more samples.  Whole foods also keeps fruit up front for the kids to each get a piece.  My girls look forward to that too.

Can you see a pattern here?  They love free food ….. or food.  If a place has samples, they are always game!

We then headed out of Little Rock towards home.  We met up with hubby and he took the girls home with him while I finished my grocery shopping at Mad Butcher and Walmart.

Tired yet?  I sure was, but was glad to get so many things done in the day and we had a great day out.  Now we can spend our time getting ready to get started with our school next week :-)

Have you had any frugal days out lately?  Want to share your day, leave a comment or a link to your blog post if you are a blogger.  

 Making a habit out of living frugal…..

Contentment and it’s relationship to frugality

Contentment is a big part of being able to live a frugal life.  Why?

This past week we spent several days in and around Dallas, TX.  It felt good to be in an area that had so many things so close again.  (I’m originally from the suburbs of Chicago) There were stores everywhere.  Stores that I only get to see online.  Stores that have some of the best weekly deals.  There were local parks that were so nice, clean and inviting.  Immediately I felt like these people were so lucky to have the things I don’t have.

 

I was having a bit of discontentment.

Living so close to many of these things would make it quite hard for me to be frugal.  Sure running to each and every store for the best deals sounds like your being frugal, but the time spent and the gas used would definitely negate that savings.  You see it’s very hard to get around in Dallas.  The traffic is congested, and there is construction everywhere you turn.

Having these things close would not make me happy.  Spending more money would not make me happy.  In fact, the longer I was in Dallas, the more I was ready to go home.

This quote by Benjamin Franklin makes such a great point.  “Contentment makes poor men rich, Discontent makes rich men poor.”  Being content will not only save you money, but it will make your life “rich”.  Not necessarily rich in money, but rich in faith, relationships and happiness.  This “rich” is the most important of all.

No materialistic item will make a person content.  They will always want more.  This behavior is what leads to overspending and increased debt.  The materialistic items never make a person content, while the person keeps wanting more.  They keep looking for more.

Content people are happy regardless of their financial situation.  They make the most out of what they have.  They can remember that they have the important things in life like God, relationships, and family.

I personally have been that discontented person.  My husband would agree that he has been too.  As young adults we spent money on materialistic things.  Neither of us was taught financial responsibility as children.  We got excited when we started making money. We started buying those things that everyone else had.  Those things we thought we needed.  As we have gotten older our faith has gotten stronger as well as our financial responsibility.  We now know we have the important things in life.

I believe that as a person becomes content, other parts of their life fall into order.  A content person is just a more peaceful, happy person.  They have a different view on life. They have a different life.

A couple years ago The Frugal Girl, whom I greatly admire for many reasons, wrote a series on contentment.   The links to those articles are found at the bottom of this post about Contentment.  I think you will enjoy reading them as much as I did.  Until then, I hadn’t really thought about contentment.  I hadn’t really thought about it’s place in my life.  I hadn’t really thought that contentment was the reason so many things were changing in our life.  We were learning to be content.

I think everyone has moments of discontentment.  Human nature is to want things.  We just need to be able to realize it.  We need to know how to handle it.  Knowing where you lack and where you need work is the biggest part of growing spiritually.

So while Dallas had some great things, I am happy to be back at home with my family.  We did do a bit of shopping.  The two little girls had been saving their allowance for the American Girl store.

….. and I was perfectly content with my new bread pan from Williams-Sonoma.  Joy!

 

Would love to hear your thoughts on contentment.

Making a habit out of living frugal …..