Simply Delicious: The How To's; Budgeting and Saving Money

Wednesday, August 22, 2012

The How To's; Budgeting and Saving Money

Cutting back on things you need the least and giving up things that you desire most is a good starting point if you are at a total loss as to what and how to give something up. Like most of us, we don't want to give things up at all. Why? Well, we get used to what we have,...believe me, I know this all so well. After my divorce I had to start over and I was used to having credit cards everywhere with high limits, and access to cash always...that came to a screeching halt, then add two kids in private high school, and onto college for degrees along with the rent, car payments tagging two kids on an insurance policy and all the other bills....Oh yeah, I learned that I needed to add a new line into my budget or plan for the future better for inevitability's so that they would not get the best of me, or sneak up on me. I needed to make sure that I was totally prepared and well on my way to a better future. Are you well on your way in the family budgeting process? I thought I was, but there were times where there just wasn't enough to cut it. What do you do then besides cry? Well, I was thankful that my lights were never shut off, my water always ran, the heat always kept us warm, there was always gas in the car, but gee, beck then I complained when it jumped up to $1.50 a gallon back in 2004. The main thing was that we had food to eat and we were all healthy for the most part.

How can you be certain that you are saving and still making ends meet? Try to consolidate and re-visit your budget often – it is a dynamic process and ‘living’ document or tools so to speak to help you keep your fingers on the pulse of your financial situation.

Another very useful strategy is to set up a bill-paying plan and process that will protect your interest. This helped me a lot. When, how and how much you get paid will all influence your course of action. Creative and innovative allocation of your paycheck is the key. If you get paid once a month, the amounts in your budget will have to be paid monthly as is.

If you get paid twice a month, divide each budget item by two.

If paid bi-weekly (as is mostly the practice these days), still divide the monthly amount by two – it will not be the exact amount to plan for, but a rough and close estimate. In the end better than nothing! If you are paid weekly, divide each budget item into 4. Cash flow management will form a big part of your fiscal strategy, once you have put your budget pen to paper and mapped out the needs and requirements. Utilize your cash, checking and savings account (if applicable) to pay for expenses. Do not pay your bills with your credit card!

Keep track of all your discretionary spending. A financial diary (so to speak) for a week is always a good idea to scribble down in every time you withdraw money, pay for something or open your purse without thinking.

This will provide you with insights you did not have before on where the money actually goes. It will also carry within it, clues to adjust budget lines if actual cost is higher on certain items. Spending patterns and behaviors will emerge that might surprise or ever shock you!

Always have some wriggle-room and discretionary spending...this will be your motivation! The occasional treat and indulgence, special night out or other activity is that more enjoyable, if you know you have worked hard to earn it and deserve a pat on the back for all your fiscal responsibility and discipline! Don't leave yourself short...trust me, this I have done also. It sucks.

Always keep one eye on the future… budgets might need to change again and again for a variety of reasons. You can never feel you have “arrived” completely and that your budget is set in stone. Family and life often throws us a curve ball or two, banks, service providers, government and fate sometimes do too! Don't let this frustrate you though, just continue doing what you are and save, save, save! It's always best for the future if you save for that rainy day today! If you wonder if this works or not the answer is YES. I managed to save for the future even with the financial ups and downs and hurdles in between. I started a business, then another then another. If I can take what little I had and make it stretch doing without everything that I was accustom to, you surely can too!