There are a number of ways people go about budgeting. Some people are blessed with the ability to say no to their own wants, others (like myself) have to find ways to make it impossible to say yes. Here are a few examples of way to budget your money so you only spend what you can afford.
1. Cash only
Just like it sounds, CASH ONLY! No debit or credit cards. Take out the money you have budgeted for the week or month and that is all you get until the next budgeting period. This is extremely effective for those of us who don't think twice about swiping a card to pay for something. For me personally it hits my wallet a lot harder if I can physically see how much of that green paper is being handed over. One of the most effective ways I have known for budgeting is called the envelope system. Take a number of envelopes and write down the different areas you have budgeted for. Now disperse the cash into each envelope. When you go grocery shopping take the "Food envelope" with you. This way, you can only spend what you have on you, no more. When you go out to eat, take the "luxury, or Mad Money" with you. If all you have is cash, then that is all that you can spend.
2. Go back to checks.
In a world where plastic seems to rule, hand writing check may be a viable alternative to those who do not want to carry all of their money for the week in their purse. While most checks today are treated like debit cards, the physical handwriting out of the check is another reminder of how much you are spending. However, if you are a person who has more self control than I do, a debit card can also do the trick. The important thing is to make sure you are staying with in budget every week!
3. Prepaid Cards.
This is something that is a good alternative to cash. They work just like debit cards, even at ATM'S, but you can reload your weekly or monthly budget onto one of these cards. They cost about 5 dollars initially, but you can reload them at anytime. Security features include, your name on the front, pin #, and replaceable if lost or stolen. However, this card is NOT attached to any of your bank accounts so you won't run the risk of overdrafts. This is also a good way to learn how to manage debit or credit cards for persons who have had credit trouble in the past. You get the ease of a card but none of the risks. Check out VISA prepaid cards online to see the options, or go to a Walgreen's, CVS, or Walmart. Most of these stores carry them near the gift card section.
These are my suggestions on ways to budget. It is easy to make a budget on paper, but following through when you are in your favorite shoe shop can be difficult. If you only have cash and it is the difference between having those great stilettos or eating dinner that night, hopefully you will come to a conclusion that is best for your family. A few small sacrifices for a short period of time can mean a lot less stress for years to come!
Monday, September 13, 2010
Wednesday, September 1, 2010
Budget
Here is a basic budget, with my actual spending. Yours may be a little more complicated if you have children or a car, as those will have their own expense category. Just remember we are only talking about the basics. Now, I live in a state with free health care, but put this in the budget just to show how doable this type of budget can be.
Expenses
Rent $ 1,100
Food $ 500
Bills $ -
Transportation $ 100
Insurance $ 500
Necessities $ 50
Other $ 50
Total $ 2,300
Income
#1 $ 1,620
#2 $ 500
#3 $ 500
Total $ 2,620
Savings $ 320
Now, My rent includes all utilities which is why the Bill section is zero. You would put in your electric, gas, water, sewage, trash, etc. Transportation is a monthly bus pass for myself and husband. For you, it might be a car, so include gas, maintenance, monthly payment, and insurance. Necessities are the basics like toilet paper, dental hygiene, etc. Other can be a catch all. Don't forget if you have debt to place that on here too (i.e. credit cards and/or student loans). Income is your after tax pay check. For our household we have 3 jobs, I work 2 and my husband 1. As you see, if we only worked the one main job, we would be in debt every month. This could be a reality check for some people. Sometimes it is necessary to get a part time job...maybe to save, and maybe to make ends meet. Our monthly savings is $320. Over the course of a year that adds up to $3,840.
Now, lets be realistic. You might have more expenses, or you might have a higher income than our family, but the important thing is to know how much is coming in, and how much is going out. Set up your own budget on a sheet of paper or Excel. Take the numbers from last month, both expense and income. Now, over the next month be VERY conscious of your spending and see how much you actually can live on comfortably. Compare the two budgets. Are you overspending or generally spend only what you need?
An Example;
A pay raise or better job, now our #1 income source goes up to $2,695. If our spending does not change that is an extra $1,075 every month we get to take to the bank. Look at that on top of the previous savings and now in a year we have saved $16,740. Wouldn't that make a nice down payment on a house? Maybe make a dent in your credit card debt or pay off those hospital bills?
Budgeting is the key to getting and staying out of debt. The next post will discuss different budgeting techniques and finding what works for you. First, however, I would like to share one of my most favorite budget friendly meals, Beef stew.
Beef Stew
1 package stew meat (2 lbs) $6.00
1 Onion $0.25
1 Can beef stock (or 2 bullion cubes) $1.50
6 medium Potatoes $1.00
1 small can Tomato paste $0.50
3 Bay leaves $0.25
6 Carrots $0.75
1 can Corn $0.75
Saute the onions and Meat until brown. Add the remaining ingredients and fill with water to cover. Bring to a boil, reduce heat and simmer for 30 min to an hour until vegetables are cooked through. The longer this sits, the thicker and more stewier it gets, so if you work during the day try sauteing the meat and onions in the morning in a crock pot, adding the remaining ingredients and setting it on low for the whole day. It would be more than ready when you get home. Total cost is approximately $11, and can feed myself and husband for about 2 meals. Although he is a big man and eats for about 2 people. I would say an easy 6 servings. This will last even longer if you make some rice to go with it, just put in the bottom of the bowl before serving (don't mix before hand as the rice will go very soggy). Before I was married I could eat off of this for a week!
More recipes to come in the future. The idea is to find recipes that stay around a $10 budget, fill you up, and are reasonably nutritious.
Expenses
Rent $ 1,100
Food $ 500
Bills $ -
Transportation $ 100
Insurance $ 500
Necessities $ 50
Other $ 50
Total $ 2,300
Income
#1 $ 1,620
#2 $ 500
#3 $ 500
Total $ 2,620
Savings $ 320
Now, My rent includes all utilities which is why the Bill section is zero. You would put in your electric, gas, water, sewage, trash, etc. Transportation is a monthly bus pass for myself and husband. For you, it might be a car, so include gas, maintenance, monthly payment, and insurance. Necessities are the basics like toilet paper, dental hygiene, etc. Other can be a catch all. Don't forget if you have debt to place that on here too (i.e. credit cards and/or student loans). Income is your after tax pay check. For our household we have 3 jobs, I work 2 and my husband 1. As you see, if we only worked the one main job, we would be in debt every month. This could be a reality check for some people. Sometimes it is necessary to get a part time job...maybe to save, and maybe to make ends meet. Our monthly savings is $320. Over the course of a year that adds up to $3,840.
Now, lets be realistic. You might have more expenses, or you might have a higher income than our family, but the important thing is to know how much is coming in, and how much is going out. Set up your own budget on a sheet of paper or Excel. Take the numbers from last month, both expense and income. Now, over the next month be VERY conscious of your spending and see how much you actually can live on comfortably. Compare the two budgets. Are you overspending or generally spend only what you need?
An Example;
A pay raise or better job, now our #1 income source goes up to $2,695. If our spending does not change that is an extra $1,075 every month we get to take to the bank. Look at that on top of the previous savings and now in a year we have saved $16,740. Wouldn't that make a nice down payment on a house? Maybe make a dent in your credit card debt or pay off those hospital bills?
Budgeting is the key to getting and staying out of debt. The next post will discuss different budgeting techniques and finding what works for you. First, however, I would like to share one of my most favorite budget friendly meals, Beef stew.
Beef Stew
1 package stew meat (2 lbs) $6.00
1 Onion $0.25
1 Can beef stock (or 2 bullion cubes) $1.50
6 medium Potatoes $1.00
1 small can Tomato paste $0.50
3 Bay leaves $0.25
6 Carrots $0.75
1 can Corn $0.75
Saute the onions and Meat until brown. Add the remaining ingredients and fill with water to cover. Bring to a boil, reduce heat and simmer for 30 min to an hour until vegetables are cooked through. The longer this sits, the thicker and more stewier it gets, so if you work during the day try sauteing the meat and onions in the morning in a crock pot, adding the remaining ingredients and setting it on low for the whole day. It would be more than ready when you get home. Total cost is approximately $11, and can feed myself and husband for about 2 meals. Although he is a big man and eats for about 2 people. I would say an easy 6 servings. This will last even longer if you make some rice to go with it, just put in the bottom of the bowl before serving (don't mix before hand as the rice will go very soggy). Before I was married I could eat off of this for a week!
More recipes to come in the future. The idea is to find recipes that stay around a $10 budget, fill you up, and are reasonably nutritious.
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