Simply Junior

Saving money is a problem for a lot of people, and in the U.S. today, personal savings are at record lows. If you want a comfortable future for your family, it is imperative that you learn to save. If you plan to save, you must first plan how you spend. Developing a monthly budget is key for ensuring you have money left for savings.

Before You Start

* Discuss your plan to save with the rest of your family and make sure they agree and understand the importance. If they recognize the purpose behind any sacrifices they must make, they are more likely to stick with the plan.

* Calculate your savings for prior year. How much did you set aside, if any?

* Make debt a priority. Use your tax refund, etc. to pay off expenses in order to pave the way for greater savings.

Pay Yourself First

When creating your budget, plan to pay yourself first. In other words, pay your bills and then pay your savings account – BEFORE you buy that new TV or take that weekend trip. Saving money now will ease financial strain when something big, like college or a new home, comes up in the future.

Get Started

It takes some effort to construct a family budge. There are many computer programs and other electronic aids to help you, and of course, you can always opt for the old faithful pen and paper. Find a good example of a budget worksheet online to give you a guideline to go by, but most of all, choose a plan that will be easy and efficient for use and compliments your needs.

You will first need to consider your monthly income. You should calculate every penny that goes into your pocket. This information will help prevent you from spending more than you make.

After you know your exact income, you should track your spending. Take at least a month to determine how your money disappears. Make a record of everything from bills to bowling in order to plan the most efficient budget.

Organize your spending into categories to include both the things you need and must pay for, like your food and your mortgage, and also the things you enjoy but could live without if you had to, like a monthly manicure or eating out twice a week.

Spend less = Save more

After you’ve looked at your detailed spending list, you can determine whether your debt is greater than your means. If you don’t make enough to cover you car and house payments, you may need some aggressive action. For most people however, the overspending comes with the ‘incidentals’ and the luxuries we’ve all grown accustomed to.

Your incidental spending will be the easiest place to cut back and make room for saving. You can start by canceling magazine subscriptions and going out to eat less often. Rent movies instead of going to movies to avoid the snack bar pitfall. You can always pop popcorn at home.

Dig Deep

You may be able to reduce spending in other areas as well. You might want to consider more economical shopping and clipping coupons. Try carpooling more often to save on astronomical gas prices.

Credit card debt may be a problem for you as well. You should have a ‘pay off’ goal and may want to consider shopping around for low balance transfer rates or cards with no annual fee. CardWeb has a great list of low rate cards (1-301-631-9100 / online at cardweb.com).
Low introductory rates that skyrocket after six months are a common pitfall. If you switch to a low rate card, make sure it’s for the duration of the balance.

Consider a home equity loan for a tax deduction, or look into a consolidation loan. Be certain you can make the monthly payments before going this route. Banks have the power to foreclose on a home equity loan in 90 days if you have miss your payments.

If you’re struggling with debt and it’s thwarting your effort so to save, the National Federation for Credit Counseling (call 1-800-388-2227, or visit nfcc.org) can help you set a budget and organize payments with creditors for a small fee. Once you start to pay off debt, you can use the extra money to build savings.

More and More

As you ‘get on a roll’ with your budget, you will start finding room for more savings and anticipated needs. You may even be able to set money aside for these anticipated needs. You will still need to pay yourself first, but you may also begin to set money aside for that new car or the boat you’ve always wanted.

If you set a savings goals for the long and short-term, you will likely save more. Studies indicate that people who have goals, tend to fair better in the long run.

You will have to manipulate your budget as your circumstances change. Don’t allow your plan to become stagnant and end up back where you started. Stay on top of the budget to stay on top of the savings.

Summary

Below are seven methods for saving cash that you can implement now:

Saving Cash Tip 1 – Examine Your Finances

This is where it begins. You need to be aware of exactly what is coming in and what your outgoings are on a monthly basis. The biggest reason why people spend too much money and often money they can’t afford is because they are not in control of there money.

Saving Cash Tip 2 – The Things You Need Only

Calculate monthly what you have to spend money on. This will probably include house payments, groceries, commuting expenses, utilities (electric, gas, telephone), memberships, car loans and so on. Once you have deducted this from your income you will only have so much available for your monthly budget to spend on other things. It is this area that you need to look very closely. Don’t waste money on non-essential items.

Saving Cash Tip 3 – Pay With Debit Cards Or Cash

Another simple way of saving cash is by using a debit card or cash when buying things. This is far better than using credit cards as you may think there is no limit when using credit cards. When you use cash then this may make you think again about purchasing unnecessary items as it will significantly reduce the cash you have in your pocket.

Saving Cash Tip 4 – Record All Of Your Outgoings

Saving cash is often a mindset issue – because you don’t know your financial status you feel at liberty to spend relentlessly. By specifically recording everything (yes everything) of your expenditure you will soon build a clear picture of your spending habits. If it’s possible to get a receipt for something then get them.

Saving Cash Tip 5 – Find Coupons And Use Them

Coupons are to be found in many publications. You probably receive newsletters from your favorite supermarkets and other shops so try them out. You can also get coupons from the Internet. Google the shops that you frequent and see what special offers they have at the moment. You could even plan your weekly menu based on these offers.

Saving Cash Tip 6 – Keep Your Visits to the Shops Short

You can keep your visit to the store brief by creating a list of exactly what you need before you go to the shops. Research has revealed that shoppers who stay longer in shops are more likely to spend more money than those that opt for the shorter stay. Also shoppers that visit the stores without a “list” will be much more susceptible to impulse buying as they do not have a plan to follow.

Saving Cash Tip 7 – Switch Off Unused Appliances

Saving cash on your electricity bill is simple – just turn everything off that you are not using or you are no longer using. How many times have you left your TV set on “Standby” the whole night? Stop this now – it will cost you a fortune over the longer term. Also if your heating and/or air conditioning is controlled by thermostat reduce it to a sensible level. When you are out working or somewhere else program the timer to turn it off and turn it back on again a short time before your planned return time home.

Saving cash is really all about discipline and conditioning your mind to not only keep tabs on your expenditure but also to examine your spending habits and those of others in your household. It can be difficult initially but when you get into the habit it’s pretty easy. A tip that will really help you is just to think to yourself “Do I really need this?” when you are thinking about spending money on an item that is not essential for you. Give it a try it works every time.

Saving money can begin by taking little steps to control unnecessary spending. One of the problems that arises when attempting to control unnecessary spending is that we are not always aware of how much money we actually spend. There are a few things that can be done in order to get a handle on unnecessary spending in order to save money.

1. Set up a monthly budget

We have all been told this at one point in time or another – budget your money. In general, we all know the basic things that need to be in our budget – rent or mortgage, utilities, credit card payments, car payments, insurance payments, gas money, food expenses, clothing allowance, savings allowance and an entertainment or miscellaneous allowance are just some of the major budgeting areas.

When setting up a monthly budget, however, many of us simply are not as detailed as possible and at the end of the month we spend more money than our budget actually allows, usually in the form of credit card expense, which costs us more money in the long run with interest rates.

While some areas of our budget are already predetermined, other areas can be micro-managed. These areas include our food expenses and our entertainment and miscellaneous expenses. Many times we don’t realize just how much we spend on food or other expenses because we don’t take the time to save those receipts and calculate just how much we spend. This is a mistake because without doing so, we cannot see just how much we might be spending unnecessarily.

2. Get Rid of Unnecessary Spending

To get rid of unnecessary spending and start saving more money, take a month and collect the receipts for everything you spend money on, even if it’s as small as a candy bar. Create a spreadsheet that lists each item you spent money on, how much you spent and why you spent that money. Then go through and decide whether that expense was necessary or unnecessary.

Deciding what is necessary and unnecessary can be a difficult task. The way I go about making this decision is based on whether I can change some of my habitual spending in order to save money. For instance, looking back at how much money I spent on food, I realized that I had spent a total of $105 on breakfast last month. Why? Because rather than eat breakfast at home, I decided that it was easier to stop in at some drive-thru and pick up breakfast.

Had I made the same breakfast at home everyday, I would have saved approximately $65. This was just my savings on breakfast alone, when I did the same thing for lunch and dinner, I realized that by changing my habits I could have saved about $300 on my food expenses alone. When I applied the same calculations on my coffee drinking habits, which is not as great an expenditure for me as it is for others, I realized that I could save an additional $50 a month.

This technique may seem like a nickel and dime way to save money, but it adds up. Saving $350 a month just by little changes will end up saving $4200 over the course of the year.

While getting rid of unnecessary expenses takes a little time, effort and commitment to changing habits that contribute to increasing the amount of money you spend every month, the outcome is a saving a significant amount of money over time.

Restaurant discount coupons are easy to come by and with a little time and effort, eating out doesn’t have to be sacrificed.

In today’s economy many consumers are tightening their budgets and seeking out opportunities for savings more than ever. For many this has included cutting out the fun extras, such as eating out or going to the movies. Many retailers and restaurants have responded to the downturn in the economy by offering incentives in an effort to encourage consumers to continue to spend money on the extra things.

As the recession continues and unemployment rates remain high, it is certainly important to be mindful of spending and saving, but it isn’t necessary to cut out everything, nor is it healthy. Eliminating the most simple of things may add to the stress or sadness many people are already experiencing. Eating out, for example, is a special treat for most families, which makes everyone feel good and provides quality time outside the home. Eliminating that experience may discourage family members in addition to having a negative emotional impact on the entire family.

Fortunately, there are a number of restaurants that offer on-line discount coupons to help families avoid making that sacrifice. Discount restaurant coupons are widely available and a great value. Purchased on-line, these coupons are valued at double or triple the purchase price. This helps to stretch that hard earned dollar a little further and to continue to enjoy restaurant meals.

To take advantage of these deals begin by determining a weekly or monthly budget for restaurant spending, including the expense of purchasing the discount coupons. The budget amount will depend on the number of people included and how many restaurant meals are planned. Thinking about the types of restaurants visited will be important too. Fast-food restaurants are generally less expensive than casual dining restaurants, so budget accordingly. If money is so tight that it is difficult to find room in the budget for restaurant outings, take a look at the other household expenses. Check into the telephone, cell phone or television subscriptions. Can they be downgraded? Reducing or cancelling non-essential household expenses may free up enough money to allow for the restaurant budget. Once the budget is set, head for the internet.

Using search engines with keywords such as “restaurant coupons,” “discount restaurant coupons” and “buy restaurant coupons” should return numerous websites offering great deals. The websites should have the option to view restaurant deals available in a specific city or region. This will ensure that you will be able to use the coupons for local deals. As they are sold on-line a credit card will likely be required to purchase the coupons. Be sure the website is secure and be diligent about paying off the charge prior to incurring finance charges. Any savings gained through the use of the coupons will be diminished or lost entirely if credit card debt is increased.

Restaurant discount coupons are easy to come by and with a little time and effort, eating out doesn’t have to be sacrificed.

“I only have a small business, I don’t need a budget.”

“I don’t have enough money to budget.”

For many small business owners, the word “budget” is something for the bigger company – maybe they’ll have one when their business “grows up.”

What is a Budget?

The simple explanation is a budget is a plan for how you will manage all financial resources and all expenses for your business. The basic equation that you want to demonstrate in a budget is as follows:

(estimated )Sales minus (estimated) Expenses = Profit (or loss)

How to create a Budget

If this is your first time to work on a budget for your small business, you might work from the perspective of having to list cost of goods or services plus all of your operating expenses to start the process.

How much does it take to operate your phone line? What is the cost of other utilities? How about the cost of a company vehicle, or what is the cost of transportation if you’re using your personal vehicle to also serve as a company vehicle. Do you need any supplies or inventory to operate your business? How about any employee payroll, payroll taxes or independent product or service providers? Remember to include everything you spend money on to operate your business even if you allocate some of the expenses to “petty cash” expenses, such as parking or bridge tolls while traveling to see clients.

I recommend that you create annual budget, as opposed to a monthly budget, so you can identify any expenses that you may have that come up only once or twice a year such as insurance and include them in your list of expenses. This allows you to amortize or spread the cost of this out over several months so that you can plan ahead for the expense.

As you work on your list of expenses keep in mind that these are the expenses that are necessary to operate your business. These should not be your “wish list” unless you want to budget in some expansion or growth. You may want to create a budget with just the necessities and another version of your budget with expansion expenses listed so that you can see the cost of both separately.

With a dollar figure to work with of your total expenses you are able to set the standard for or evaluate your sales figures. If you are new to your business you may need to use the dollar amount of your expenses to help you determine what your sales need to be in order to cover all costs and show a profit. If you have been in business for a while you can evaluate whether or not you are producing a profit by looking at historical sales figures.

As you conduct business during your budget year you should compare your actual income and spending with what you estimated. This will allow you to manage your spending so that you don’t over spend and cut into or eliminate your profits. You will also be able to see if sales have met expectations in order to cover expenses and still remain profitable.

Who should Budget?

Every small business owner should budget, no matter the size of business. I have heard some small business owners say their business is too small to budget, but that is not true. If you don’t have a written plan for what your financial obligations are and how your revenue will cover those obligations and leave some money unspent, then your business will never grow. In fact, you may out-spend your revenue and put yourself out of business.

Why Budget?

Budgeting for your small business gives you control over your finances. By looking ahead to what you know or can reasonably estimate what your expenses will be, you can then make financial decisions that will keep you from over-spending, or give you the freedom to invest in the growth of your business.

When Budget?

Every small business owner should have a budget to start their business and then review it annually. I recommend that small business owners review their budget several months before the end of their fiscal year. When I say review the budget I’m talking about comparing projected budget with actual. In the comparison you can see if your estimates were realistic. You and your CPA can also plan for last minute tax strategies, or plan to implement strategies in the up coming year’s budget.

The Goal in Budgeting

Remember, the goal of having a budget is to stay in control of your finances in advance. Setting the standard for your spending and revenue and having a tool to compare with actual will give you the control that you need to stay profitable. At the very least it will give you an indication of whether or not your business is actually profitable and not just busy.

Copyright 2005 Melody Campbell