Frugal living does not have to be about a life of depravation. The frugal life is one of thrifty shopping, careful choices, and a saving mindset. Making just a few adjustments in five areas of your normal life will help you become a frugal person.
Groceries are one of the most expensive items on any budget. Be sure to take a list with you to the grocery store; this will help to cut back on impulse items. If you are still concerned, then why not take a friend shopping with you. Exchange lists at the store and each of you can gather up the other's groceries, virtually eliminating all impulses. And don’t forget to cut out coupons. It may take some time, but it will add up in the end.
Showing posts with label expenses. Show all posts
Showing posts with label expenses. Show all posts
Wednesday, February 03, 2010
Wednesday, July 22, 2009
Small Change Makes Big Wealth
There is an old saying that if you don’t break a dollar then you won’t spend that dollar. That is even truer today if you talk about bigger bills, but the idea behind the saying stands. The smaller the money, the easier it is to part with. That’s why so many people are parting with big bucks in small increments. Our minds just don’t seem to be able to add it up. But if we stopped the little spending then we would be able to save big money every week. Here are some great ideas on how it can be done:
Cut the coffee shop out of your day, or break that smoking habit that you’ve been promising to break. Take that $4 and put it into a savings account at the end of every week. By the end of the year you will have added around $1000 (depending on how many weeks you have off each year).
Take your lunch to work each day instead of buying it there. You can have a much healthier meal and a greater variety by doing it yourself. Plus, you’ll save around $5 each day and that will add an additional $1250 to your savings account.
Eat in more often. If you are a regular at dining in restaurants then you are probably wasting a large sum of money each year. By giving up just one meal out each week for you and your family you will probably be able to add another $2500 to your savings.
Cut hair at home. This is a pretty big saver for large families (especially those high on the girl numbers). You could potentially save $30 a head and that would mean lots of additions to your savings account.
Give up the cable. The television is only eating your valuable time and it doesn’t give you anything in return. By cutting the cords you could save $60 a month. That means you would be building your savings by $720 each year.
Once you build up your savings, switch them over to a higher interest rate investment option. CDs are one of the most secure, higher rate investments on the market. As you continue to grow your savings, you can seek professional advice about the best way to invest that money.
Use the savings to pay off your mortgage early and you can save yourself even more money (in the form of interest). But be sure to check on prepayment penalties before you make that leap. It could end up costing you more than it would save you.
Cut the coffee shop out of your day, or break that smoking habit that you’ve been promising to break. Take that $4 and put it into a savings account at the end of every week. By the end of the year you will have added around $1000 (depending on how many weeks you have off each year).
Take your lunch to work each day instead of buying it there. You can have a much healthier meal and a greater variety by doing it yourself. Plus, you’ll save around $5 each day and that will add an additional $1250 to your savings account.
Eat in more often. If you are a regular at dining in restaurants then you are probably wasting a large sum of money each year. By giving up just one meal out each week for you and your family you will probably be able to add another $2500 to your savings.
Cut hair at home. This is a pretty big saver for large families (especially those high on the girl numbers). You could potentially save $30 a head and that would mean lots of additions to your savings account.
Give up the cable. The television is only eating your valuable time and it doesn’t give you anything in return. By cutting the cords you could save $60 a month. That means you would be building your savings by $720 each year.
Once you build up your savings, switch them over to a higher interest rate investment option. CDs are one of the most secure, higher rate investments on the market. As you continue to grow your savings, you can seek professional advice about the best way to invest that money.
Use the savings to pay off your mortgage early and you can save yourself even more money (in the form of interest). But be sure to check on prepayment penalties before you make that leap. It could end up costing you more than it would save you.
Saturday, December 13, 2008
Benefits of Creating a Personal Budget
A budget is a spending plan. It is your single best tool for knowing where your money is going and how much you have to work with. Of course, just the mention of the word budget can send even the most structured and organized person running for the hills. A budget, however, has several tremendous benefits. Among them are:
1: A budget makes it easy to save and have extra money. By tracking your expenses and income and controlling how much you spend on variable expenses, you will quite likely find that you have more money than you thought you needed. What are you going to do with that extra money? Of course the experts will tell you to save it and that’s probably a good idea, but maybe you could set aside just a little bit of that extra money to do something fun - like take a vacation or go to that five star restaurant you’ve been anxious to try.
2: A budget saves you time. How long does it take you to collect information at the end of the year for taxes? Even if you don’t do your taxes yourself, gathering all of those financial documents can take days and can be extremely stressful. When you have a budget, all of your expenses and income, including your taxes, are documented. This is particularly the case if you use a spreadsheet program or accounting software.
3: A budget makes it easy to track, and control, your spending. It gives you freedom from the stress of not knowing you have enough money to cover certain expenses. It is so much better to control your finances than to let them control you.
4: A budget can reduce family and personal stress. A family budget creates an environment of teamwork and communication rather than one of stress and blame. Everyone is accountable for the spending decisions made and the financial goals you’re striving towards.
5: A solid budget makes it easy for you to make spending and investment decisions with confidence. Have you ever had the chance to invest in something but you weren’t sure if you could? With a solid budget in place you know exactly where you stand financially and your investment decisions can be made with the right information at your fingertips.
6: Budgets help you plan for the future with ease and confidence. Are you saving for your retirement? If yes, are you saving the right amount or should you be saving more? Are you going to need a new car soon? If you are, will you have the money for it? A budget gives you the ability and the confidence to plan for the future because you know exactly how much money you have to work with right now.
There really is no downside to budgeting. It reduces one of the most significant causes of stress and it puts you in control of your money and your future.
1: A budget makes it easy to save and have extra money. By tracking your expenses and income and controlling how much you spend on variable expenses, you will quite likely find that you have more money than you thought you needed. What are you going to do with that extra money? Of course the experts will tell you to save it and that’s probably a good idea, but maybe you could set aside just a little bit of that extra money to do something fun - like take a vacation or go to that five star restaurant you’ve been anxious to try.
2: A budget saves you time. How long does it take you to collect information at the end of the year for taxes? Even if you don’t do your taxes yourself, gathering all of those financial documents can take days and can be extremely stressful. When you have a budget, all of your expenses and income, including your taxes, are documented. This is particularly the case if you use a spreadsheet program or accounting software.
3: A budget makes it easy to track, and control, your spending. It gives you freedom from the stress of not knowing you have enough money to cover certain expenses. It is so much better to control your finances than to let them control you.
4: A budget can reduce family and personal stress. A family budget creates an environment of teamwork and communication rather than one of stress and blame. Everyone is accountable for the spending decisions made and the financial goals you’re striving towards.
5: A solid budget makes it easy for you to make spending and investment decisions with confidence. Have you ever had the chance to invest in something but you weren’t sure if you could? With a solid budget in place you know exactly where you stand financially and your investment decisions can be made with the right information at your fingertips.
6: Budgets help you plan for the future with ease and confidence. Are you saving for your retirement? If yes, are you saving the right amount or should you be saving more? Are you going to need a new car soon? If you are, will you have the money for it? A budget gives you the ability and the confidence to plan for the future because you know exactly how much money you have to work with right now.
There really is no downside to budgeting. It reduces one of the most significant causes of stress and it puts you in control of your money and your future.
Saturday, October 11, 2008
Are Debit Cards Smart Choices?
Debit cards are associated with checking accounts. Consumers can use them as credit cards if they contain a Visa or MasterCard logo on them. They don’t incur fees like a credit card does because they are backed by the amount of money in the account. With that said, are debit cards as good a choice as they seem?
Debit cards are issued when a checking account is opened if the customer elects to do so. Debit cards give the illusion of a credit card, without the fees and penalties that go along with failure to pay or late payments. They make it easier to purchase items in stores or restaurants. We’ve all seen those commercials where everyone in the shop pays with plastic and things run smoothly. Then, that one person comes along that puts a monkey wrench in the machine with a handful of cash.
Debit cards teach people to manage money again when they have had trouble in the past with credit cards. They come complete with a safety net because they are tied to a checking account with a set amount of funds. Checks and cash are being pushed out of the way in favor of the “new plastic”.
Now that we know how a debit card functions, here is a word of warning. Debit cards are a smart choice if they are handled with care. Pitfalls do exist and a debit card user can fall victim if they are not careful.
Since they are tied to a checking account, transactions need to be recorded in a ledger or a computer program. The enemy of the debit card is the ATM machine. It really does seem like a genie in a box. You put a card in and push some numbers and money spits out at you.
Just as quickly as that money was deposited in your account it can disappear if you are not careful. The checking account can become overdrawn without ever bouncing a check. ATM receipts can be deceiving, because they don’t always reflect the true current balance in the account if other transactions haven’t cleared the bank.
Debit cards are also subject to “blocking” just like a credit card. This means that some merchants can block off a set amount of money in the account until your transaction with them is processed. Case in point: using a debit card to pay for a $20 visit to the gas station, but the store blocks off $50 on the card. If the extra $30 was earmarked for something else, you will run into problems until that block is removed.
Debit cards are a good choice if managing money is a problem. But, learn to use them wisely or you could run into trouble with your checking account balance.
Debit cards are issued when a checking account is opened if the customer elects to do so. Debit cards give the illusion of a credit card, without the fees and penalties that go along with failure to pay or late payments. They make it easier to purchase items in stores or restaurants. We’ve all seen those commercials where everyone in the shop pays with plastic and things run smoothly. Then, that one person comes along that puts a monkey wrench in the machine with a handful of cash.
Debit cards teach people to manage money again when they have had trouble in the past with credit cards. They come complete with a safety net because they are tied to a checking account with a set amount of funds. Checks and cash are being pushed out of the way in favor of the “new plastic”.
Now that we know how a debit card functions, here is a word of warning. Debit cards are a smart choice if they are handled with care. Pitfalls do exist and a debit card user can fall victim if they are not careful.
Since they are tied to a checking account, transactions need to be recorded in a ledger or a computer program. The enemy of the debit card is the ATM machine. It really does seem like a genie in a box. You put a card in and push some numbers and money spits out at you.
Just as quickly as that money was deposited in your account it can disappear if you are not careful. The checking account can become overdrawn without ever bouncing a check. ATM receipts can be deceiving, because they don’t always reflect the true current balance in the account if other transactions haven’t cleared the bank.
Debit cards are also subject to “blocking” just like a credit card. This means that some merchants can block off a set amount of money in the account until your transaction with them is processed. Case in point: using a debit card to pay for a $20 visit to the gas station, but the store blocks off $50 on the card. If the extra $30 was earmarked for something else, you will run into problems until that block is removed.
Debit cards are a good choice if managing money is a problem. But, learn to use them wisely or you could run into trouble with your checking account balance.
Wednesday, September 10, 2008
Do You Need to Eat Out Every Day?
This is a question we need to seriously think about. It’s fun to eat out with co-workers, but can our budget handle it? Following the group could be part of the problem that is siphoning our hard earned money each payday.
No one wants to be left out. Eating lunch together is a way to bond away from the office. Besides it’s only six dollars, right?
This scenario demonstrates how we think when it comes to spending money on food. Food and good times seem to go together in our culture. Eating out is not the only way to bond over food.
When setting up a budget, a category is created for groceries. A weekly or biweekly shopping trip to the grocery store brings enough groceries in the house to feed the family. Buying lunch when there is food in the house blows the budget.
Ask co-workers to try bringing in their own lunch at least three times a week. Make a plan to eat in the break room together or outside at a picnic table for lunch. They will save money also.
When you eat out, you probably choose the same one or two places. Make some of your favorite dishes at home and take them for lunch. The grocery trips are not just for breakfast and dinner items. Buy foods that are good in a packed lunch. Most workplaces have a microwave and/or a toaster oven. You can prepare your food and eat it piping hot.
If you have a group of co-workers that you spend most of your time with, why not start a lunch club. Each person takes a day and fixes something for the others in the group to enjoy. No one has to prepare a meal more than once a week and they will know in advance when it is their turn.
The extra food can be figured into the grocery bill. The lunch club idea may catch on and more people will want to join. The more people are involved, the less often each person has to contribute a meal. The meals don’t have to be elaborate. There are many delicious meals that require only a few ingredients.
You can still eat out once a week or maybe even twice. Add it to your budget. Pay for your meal in cash. This eliminates the temptation to overspend that can happen when using a credit card. Eating lunch out means that dinner will have to be eaten at home to balance spending habits.
Lastly, if the group still wants to eat out more often that your budget allows, opt out. Tell them politely that you can’t go and brown bag it. They’ll still be your friendly co-workers, and you’ll have learned a valuable lesson about resisting the temptation to follow the crowd at the expense of your money.
No one wants to be left out. Eating lunch together is a way to bond away from the office. Besides it’s only six dollars, right?
This scenario demonstrates how we think when it comes to spending money on food. Food and good times seem to go together in our culture. Eating out is not the only way to bond over food.
When setting up a budget, a category is created for groceries. A weekly or biweekly shopping trip to the grocery store brings enough groceries in the house to feed the family. Buying lunch when there is food in the house blows the budget.
Ask co-workers to try bringing in their own lunch at least three times a week. Make a plan to eat in the break room together or outside at a picnic table for lunch. They will save money also.
When you eat out, you probably choose the same one or two places. Make some of your favorite dishes at home and take them for lunch. The grocery trips are not just for breakfast and dinner items. Buy foods that are good in a packed lunch. Most workplaces have a microwave and/or a toaster oven. You can prepare your food and eat it piping hot.
If you have a group of co-workers that you spend most of your time with, why not start a lunch club. Each person takes a day and fixes something for the others in the group to enjoy. No one has to prepare a meal more than once a week and they will know in advance when it is their turn.
The extra food can be figured into the grocery bill. The lunch club idea may catch on and more people will want to join. The more people are involved, the less often each person has to contribute a meal. The meals don’t have to be elaborate. There are many delicious meals that require only a few ingredients.
You can still eat out once a week or maybe even twice. Add it to your budget. Pay for your meal in cash. This eliminates the temptation to overspend that can happen when using a credit card. Eating lunch out means that dinner will have to be eaten at home to balance spending habits.
Lastly, if the group still wants to eat out more often that your budget allows, opt out. Tell them politely that you can’t go and brown bag it. They’ll still be your friendly co-workers, and you’ll have learned a valuable lesson about resisting the temptation to follow the crowd at the expense of your money.
Saturday, August 30, 2008
How to Plan for Future Expenses
Many people live from paycheck to paycheck, never quite sure if they have enough money to cover their bills. Living this kind of lifestyle makes planning for future expenses like emergencies or a new car extremely difficult. However, these big expenses do pop up from time to time and if you’re not prepared, it can be an extremely stressful event. Here are some tips on how to plan for the future and save money for the little and the big expenses.
- Step 1: Create a budget, or call it a spending plan if you prefer. A budget simply tells you how much you are spending on certain items in your life. It gives you control over your spending and cash flow, and helps you know where you can cut back.
- Step 2: Create spending goals. How much you spend on the majority of expenses in your life is up to you. You don’t have to spend $1000 a month on going to the movies. When you create a spending goal, you begin to control your money in a positive way.
- Step 3: Create savings goals. Include both short-term and long-term savings goals. Short-term goals give you more immediate satisfaction, like saving for a new coat or a vacation. Long-term goals like college fees or retirement are important too. Both types of goals will have time lines and a planned amount to save each month. For example, if you’re saving for a family vacation your goal may be to put away $200 every month for two years.
- Step 4: Create a separate savings account for your goals. If your savings and your checking mingle, then you run the risk of using your savings to pay for bills or things you want to buy.
- Step 5: Put away money for emergencies. This is particularly important in this day and age where people can get laid off from their jobs, or businesses can go under without notice. And if you’re self-employed, a savings is particularly important. Experts advise to have a minimum of six months salary set aside just in case.
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