Simply Junior

In order to begin budgeting money successfully, a mindset change is needed. This is one of the integral keys to financial planning. Swing your concentration from spending money to saving money. To influence this shift, it takes a greater consciousness of how you are earning, spending, and saving your income.

It is vital to set reasonable financial objectives for yourself and your family that you can reach individually and in a group effort. You must stick the spending limits you set. Remember, however, that budgeting money is a trial and error process. In the beginning, you will have to adjust your goals; keep them reasonable and do not get carried away.

One of the goals to achieve in order to develop a debt-free lifestyle is to eliminate credit card debt. Stay away from the ATM; it is not your friend when you are budgeting money.

Begin by keeping an accurate track of all your expenses. Count every penny, whether it goes out on a regular or irregular basis and work it into your monthly expense accounting. Get to know your spending habits and keep the good ones, while eliminating the bad ones.

Understand your income by setting up your income plan. It is vital to know what is coming in, where it is coming from and the amount as you adjust it in terms of a monthly record. Next, know your expenses. Determine which expenses are compulsory and which can be reduced, or even altogether eliminated when budgeting your money.

Discuss ways to reduce the necessary expenditures. Make allowances for each individual’s incidental expenses. Put yourself and your children on weekly allowances. Have a group allowance to cover family fun activities. Start living below your means, rather than beyond your means.

Too many American families are in financial trouble today because they bought into the credit card company’s and bank’s tactics to convince them to live above their means. When you live below your means, you spend less than you take in. This type of budgeting results in savings, elimination of debt, and the ability to live debt free.

As you start budgeting your money, it will not take long for you to see which expenses are vital and which are unnecessary. Once you have determined the necessities and targeted the overspending, you can begin to reduce debt and increase savings. All the money you once spent on impulse buys or just plain wasted can be applied to eliminating credit card debt, paying down your mortgage, and building your savings.

Remember, this is not an overnight fix. It probably took you years to get where you are financially and, depending where that is, it may take nearly as long until you can truly say that you are living debt free. You will, however, begin to see the practical application of what we are discussing almost immediately and you will feel the noose of your debt burden loosening, all by simply taking these first steps of budgeting money.

Everyone I’m sure has a dream of going out on a shopping spree after winning the lottery, and just buying everything they ever imagined. Even if you know you will never be in that situation, it is fun to think about, and I bet most people think about how happy that would make them. The facts are though, that a large number of people who do win the lottery report spending a bulk of the money within the first few years, and at the end not being all that much more happier than they were before winning.

Money can make us happier, but buying things won’t keep us happy over a long period of time. Sure, you may go out and buy that sports car you always wanted, but after a couple months of driving it, the happiness will likely wear off. I’m here to argue that money can make us a lot happier, but spending money will not. Most people’s happiness comes with the knowledge of them knowing they can spend time with the people they care about, and not have to worry about anything else. This is where money can play a major role in happiness. It is those people who save their money, rather then spend it, who have been shown to be the happiest, the longest. Someone who has $5 million in the bank, and lives off the interest will have the peace of mind knowing that they are set for the rest of their life. They can spend time with their friends and family whenever they want, do not have to get up at 6am for work every morning, and can travel wherever they wish. On the other hand, the people who use that $5 million and buy sports cars, mansions, expensive suits and large boats may get happiness initially but after the initial fun wears off, they will likely feel empty inside.

Save your money, spend it, but not too liberally, and you will find that you are happier, and less stressed in your daily life. Money can not “buy” happiness, but it can certainly give you the tools to live a happier less stressful, more fulfilling life. Most of what we buy are to impress other people, rather then to fulfill our own needs or wants. Care less about what others think about you, and more about the daily peace of mind you will have with a larger nest egg.

Getting smart with your money is a bit like going on a diet. If you eat nothing but carrots, you will lose weight, but you can’t sustain that for long. The same thing goes with spending money – you can go for a short time without spending it, but you won’t be able to keep it up.

One of the best places to start becoming a savvy spender is at the grocery store. We have to spend money on groceries, and getting into the habit of controlling your shopping habits at the grocery store will help improve your spending habits when you hit the mall or the electronics store and even in the rest of your spending.

How do you find savings at the grocery store? Here are some tips for finding areas to save:

Make a list. You’ve probably already heard that you should make a list before you hit the store so you’re not tempted to buy items randomly (only to overspend.) Having a list will keep you accountable and focused when you’re shopping so you are less likely to overspend.

Don’t shop around. If you’re driving around town to big-box warehouse stores and discount grocery stores, visiting five stores a week searching out the best deals, don’t bother. If you’re strategic and just buy things on sale at your local grocery store, you can save as much as if you spent your whole day running around to different stores.

Get smart about sales and coupons. Sure, buying things on sale and with coupons is a great way to save money. But to truly find savings, the key is making sure you’re only buying it if you need it. For example, if you don’t eat white bread, don’t stock up on it just because it’s on sale – it’s a waste of money. Instead, keep an eye on your staples and stock up on those when they go on sale. Same goes for coupons: contact the companies that make your staples and ask them to e-mail you coupons directly. You’ll save time clipping coupons for things you don’t need, and save money on things you do need.

Look up – and down. The people who plan grocery stores are smart marketers, Hanna says, and what you might not know is that the most expensive items tend to be placed on the shelves at eye level. If you train yourself to look at the bottom level, that’s often where some of the best deals are.

Be smart about produce. One of the biggest expenses at the grocery store is the fresh fruit and veggies. But if you’re buying out-of-season or pre-packaged produce, you could wind up paying 30 to 50 per cent more for your healthy staples. Instead, buy whole, seasonal fruits and vegetables and saving a bit of money.

Have you ever thought about the process of spending money? If you do the research before you spend on big ticket items by comparison shopping, looking for sales, searching for on-line coupons, and checking with consumer report websites for knowledgeable recommendations; then you are a savvy spender, and your money is working for you.

How Most People Spend

What most people don’t factor into the process of spending money is the emotional aspect of this action. Often people make purchases because they have been influenced and persuaded by advertising and other subtle but effective types of manipulation. Marketing experts, for example are masters of psychological manipulation, which is why advertisements always show happy, beautiful people using specific consumer goods to attain their state of well-being.

Our Parents Influence

Most of us have feelings that are both positive and negative about spending our hard-earned dollars. Many of our perceptions about spending, saving, and even earning money, come from learned experiences we received during our formative years. Our parents’ behaviors with money were often our first exposure to the process. If they budgeted, coupon clipped, saved and lived within their means, we probably will too. If earning a six figure income was a focal point, or living pay check to pay check played a big role in daily life; those memories had an influence on us, as well. Studies suggest that a large part of our emotional ties to money are directly correlated with our acceptance or rejection of our parents’ financial decisions.

Money Personalities

Money personalities vary greatly. Compulsive shopping, gambling and over-spending consumers usually end up with large credit card debt. The other end of the personality spectrum includes people who live frugally because they fear poverty. This fear keeps them from spending to the degree that they deny themselves things that they need for a better quality of life. Others try to avoid money issues by refusing to focus on how they spend or why. Often, busy people who make a good income don’t manage their money well because they lack the time to do so. All of these people miss the opportunities to put their money to work for them, even if it just means moving it to a different account to get a higher interest rate.

Thinking about Why We Spend

It is very important, now more than ever in this sluggish economy, to start thinking about how and why we spend money and how to get the most for every dollar we spend. The all important bottom line is preserving financial solvency. Knowing why we spend will help us manage our money more wisely.

Five Steps to Managing Money

1) Track where money is being spent and the amount
2) Set specific long term goals for your money
3) Pay cash, or use your debit card
4) Think before you buy to curb Impulse Shopping
5) Prepare for periods of unemployment by putting aside savings and purchasing Disability Insurance, and Death Benefit Insurance for yourself and your family.

If we decide to focus on where the money is going, and why, and put a plan in place in case our earning potential is lost, either temporarily or long term, we will be smart money managers and not victims of our own emotional spending.

Today’s modern society is becoming more pricey and extravagant by the day. Many people are feeling the pinch and have to pull in the purse-strings. It is common to now be in debt and it is very difficult to lift yourself out of this situation. Luckily, there are ways you can deal with your finances and having some good strategies to save money can be very important.

It is recommended that you look at your finances in detail first so that you are familiarized with the areas that need changed. Saving and spending money is a mindset, and in order to save money, you need to adjust that mindset. It is common to believe that money can buy you love and happiness- this is truly a myth. Happiness comes from the simple things in life, like the love of a child or having perfect health.

Some people are stuck in a rut and so they go and spend money to make themselves feel better; this inevitably turns into a fierce cycle which is hard to break. Many people know they are on a tight budget and feel guilty after buying luxuries, but it is too late by then. It is essential that you learn to control the urge to impulse buy.

Finding the root cause of your financial problems is the first action you must take. Then you have to learn to control your spending. One of the tried and true strategies to save money is to concentrate on only buying the items you need, not what you would like to have. The basics such as clothing, rent and food should be covered and everything else should be deemed as a luxury. Buying that new lipstick or computer game will have to be put on hold.

If you do find yourself buying additional items then that money has to be taken from an area of the basics needed. For example, you may have to cut back on food or put off buying that new jacket to make way for the other purchase. It is essential that you have a budget and stick to it.

Your finances have to be controlled well in order to start saving money. It is best to get into the habit of not spending money before you have earned it. If you are buying anything with credit cards, make sure that the funds are available for the payment to be made. Falling into the trap of spending money you don’t yet have can lead to financial complications and increase stress.

If you are not careful then your accounts could end up with a negative balance- this leads to steep charges and higher interest payments, which can add to your stress. Making this mistake can lead to financial trouble and will lessen your chances of being able to save money successfully.

Keeping track of your spending is essential and one of the best strategies to save money. Try and use cash to make payments as much as possible and avoid using credit and debit cards. It is enticing to just buy an item with plastic but this can lead to a muddle of what you paid, where and when. Keep all information up to date and detailed so that mistakes are limited. Record keeping is recommended to help you save money.