Saturday, April 19, 2008

Do you feel like this if you are trying to lay out a budget?

Just as 'frugality' is not a dirty word, neither is the word 'budget'.
How many times have you told your subordinates to
'budget' their time? Have you ever told your children they have to live
within their 'allowance money'? Is that 'budgeting'???
It's pretty easy to do - put down the word 'NEED' on the left-hand side of a sheet of paper; then 'WANT' on the right side; put in the item, and the cost of that item.
Put down your FIXED OBLIGATIONS - get that done first;
you can't even start to make a change in your 'budget', until you know what's
FIXED OBLIGATIONS are those items that you 'owe' - have to pay; regardless, each and every month.
Don't forget those periodic costs
such as taxes; insurance, tags for the car - other items that 'pop in' just when
you don't need it.
A secret we've used for 30 years: We deposit $1,000 (or did 30 years ago) into the checking account; then we do NOT add it into the balance. We've never had a bounced check; this is a great way to 'hide' a few dollars, and avoid ever getting charged $35 for a returned check fee.
Once you've added your monthly OBLIGATIONS to those pro-rated PERIODIC
OBLIGATIONS, start examining your insurance programs - see if a bigger
'deductible' on your car insurance, might yield a better rate. Do you need that
road service? If your car is less than 5 years old, you might consider
eliminating 'road service' - older than that, hang on to it.
Is your liability coverage enormous? You can
think about reducing that liability for bodily injury and property damage just a
As you examine those 'fixed expenses', how many of them can be modified or reduced to something less - look at your cost for the many phones you're paying for. Reduce if you can; we get a 15% discount with our carrier because my husband is retired - and retired military as well.
Do you need a land-line service? Think about
that 911 feature; how critical is it to you to have a 'fixed' house
Do you really need every single channel on television? We cut out everything - went back to 'basic cable' - that saved us $70 each month (we now send $50 of that to one of our chosen charities).

Do you need those magazine subscriptions? I cut all of mine since
90% of them were 'on the web' anyway. I also go to my local library (I can walk to it and save gasoline costs) where they have plenty of magazines I can read through. They let me copy an article for 10 cents; can't beat that price.

Also, they have book sales 4 times a year; you can buy used books for 50 cents - it takes a little digging through the bins, but it's worth it.

Remember, the WEB is your 'machine gun' in the time of 'war' - the war to find information, and you need it quick! I use it all the time; I don't call an accountant or an attorney - I simply 'Google' my topic or needed information - rarely do I ever come up 'short', in finding what is essential for me to know.

We paid off our credit cards a year ago; now we pay
them off each month - we don't want to pay interest. When you have to use that
interest, make sure it's only for something that is imperative, and of course an
'emergency' is never something you can predict, so don't groan too loudly when
you do have to use that credit card.
Use the credit card for purchases that are on a 40% or more 'discounted price'. Figure that what you pay in interest, is paying full price for that item you needed - feel lucky you bought it on sale, and again - don't groan too loudly.
Buy out of season items - this is
something I've done for years. Set up a closet just for 'gifts' and
'things' that you got on sale, and check your inventory when a sudden 'gift' is
needed, and you don't have ready cash.
Shop the many dollar stores that are out there; never pay for brand names when it's just a dish-drainer that sits in your sink; labels don't count here, and saving money does.
Buy 'house brands' at the store; name brands are
elevated to cover their advertising costs - rarely are they truly
Patronize your Good-Will store (they need the revenue); go to Salvation Army - find those things that you need - the key word is NEED always when times are tight.
Ask your grand-parents for ideas; they usually have
had experience with tough times, and can give you guidance...they'll be happy to
share, I'm sure.
Create a local buying club with your neighbors; buy large quantities at discount - break out the items, and realize probably 10% to 25% in savings for all.
Rather than 'partying' at the local pub - have a 'pub
night' at each other's homes...share the costs, and think of it as a 'private
club' - sounds better now doesn't it!
A recession can mean a chance to cultivate friendships; create a bond that will end up bringing you closer to your community, and finding a joy you never knew you had!