Budget---where to start?

[Miss Phode]

OK, so you've given me many great tips about saving, but now...how do I do a budget? Do you have a budget? What is your advise? There must be guidelines or some sort of game plan I need to follow.

[not2late]

Re: Budget---where to start?

First sit down and figure out what your monthly vital expenditures are. Vital expenditures are things like rent, car payments, and utility bills. These things are typically stable (you pay a set fee or a similar fee every month).

Next figure out your weekly food bill<----it's also a vital expenditure, but many times we buy 'extras' or 'treats' along with the basic food.

Then figure out your extras: cable bill, entertainment (movie tickets, dvd rentals, etc.)

Then you figure out what things you can cut back on. For example, you can cut back on the electric bill by being more energy-conscious (only using lights when you are in the room, using energy saving appliances, etc.) For example, you cut back your DVD rental to 1 or 2 DVDs per week rather than 10.

Don't use your credit card or debt card: use cash to pay store purchases. Knowing you only have $30 in your wallet will prevent you from spending it on something frivolous or using them unwisely. Credit and debt cards give you the impression that your money supply is endless---which it ain't...unless you're Bill Gates or Oprah.

[not2late]

Re: Budget---where to start?

A few more things....

You know how much you take home per pay period. And you know how much of that will go to paying utilities, etc. For example, you make $100 per month (I'm keeping the numbers simple for my pea-sized brain.) Rent, utilities and other bills comes to $30 per month. Food is about $20 per month. That leaves you with $50 right? Okay, get into your mind that you only have half of that 50 to use as spending money for the month. Forget entirely about the $25 that is in your bank account---it doesn't exist. You only have $25 in your wallet. That's it. Nothing more. If you only spend $10 of that $25, put the remaining $15 in the bank and forget about it.

The more you get in the habit of putting 'leftover' money in the bank and forgetting what's in the bank, the more your bank account/savings will grow.

[Miss Phode]

Re: Budget---where to start?

OK, my first goal is to spend less money eating out. In January we spent $407.85 eating out at restaurants. I want to reduce that at least by half. I want to put the money I save into a savings account. I'm thinking about opening a savings account at a bank different from where we have our current checking and savings, that way it won't be so easy to transfer money into the checking account.

I only want to eat out on the weekends. Sometimes in the middle of the week, I come home exhausted from working long hours, and don't feel like cooking (and I don't really like hubby's cooking) so we end up going out to eat. I need to start having foods that don't need much work in the house for days like that. Like rotisserie chicken, a bag of romaine, and caesar dress = instant dinner!

I also don't want to cut back so much that I start feeling sorry for myself and take myself on a shopping trip to reward myself for being deprived.

[biogeek]

Re: Budget---where to start?

What Meg said is spot on!

As far as cooking goes, how about setting up a slow cooker the night before, storing the crock in the fridge, and then turn it on in the morning before work? OR, make some larger meals on Sunday that you can store in the freezer or the fridge. Pull out as necessary.

I know you can do it!!! At least you're not resorting to living with your mother in law like a couple I know from church. That kind of overspending is depressing!

[staziaw]

Re: Budget---where to start?

I agree with Biogeek! I cook like crazy on Sundays. Something in the oven for dinner for the next few nights. Something in the slow cooker for lunches. Then some bran muffin for . . . well, you know. And then some ice cream or panne cotta for desserts or snacks. I spend a few hours every Sunday prepping for the majority of the week, so that I only really have to worry about the veggies and salads!

I only eat out once a week - either with my roommate and/or friends. That's my weekly food treat -- good food and great company.

I feel like I'm hijacking all your threads!

XO
Stacy

[biogeek]

Re: Budget---where to start?

Me, too, Stacy! If there's one thing that I love to chat about, it's finances and how to be a saavy spender while saving like crazy!

[Miss Phode]

Re: Budget---where to start?

Hijack away. I need all the help I can get.

[biogeek]

Re: Budget---where to start?

OK, I told you about those other programs that had info on personal finances on your other thread. Here's a link to an article on MSNBC about the shrinking nest egg. Furtherdown the article, there's a couple of links with related articles about saving & spending.

http://www.msnbc.msn.com/id/16922582/

I'll see if I can find links to the programs on Oprah and 20/20.

[Miss Phode]

Re: Budget---where to start?

Thanks Bio

[boonie stomper]

Re: Budget---where to start?

The best way to save money is spend as little as necessary for everything. You can buy and cook a dozen eggs for a fraction of that same dozen served at a diner. Covenience store purchases should be avoided, in favor of the larger market much lower priced identical goods. Better yet, look for the market's brand of an item versus the commercially advertised version. If you use something often and it can be stored awhile, buy larger more economical size packages. For instance, instead of a $5 bag of cat food a week, get 2 months worth for $20. Scan super clearance sales, closeouts, markdowns, damaged packaging discouts, etc. for things you can use before you run out of it and have to buy it when not on sale. Close doors & windows quickly when there's a big difference in the indoor-outdoor temperatures and turn off unused lights and taps to save on utility costs. Avoid long calls which charge you by the minute. Repair an item if you can rather than replace it. As you save, apply the cash leftover to the debts with the highest interest rate first, continue until debt-free.


Do these things and you may not need a "budget".

[biogeek]

Re: Budget---where to start?

Here's the Oprah link.
http://www2.oprah.com/money/jeanchat...rea_main.jhtml

There's a tab called "where to get started," "real life stories," and other good links.

Ok, on to find the 20/20 article.

EDIT: There's a myriad of finance articles on the 20/20 (ABC news) website. I couldn't find exactly what I was looking for, but many of these articles would be helpful.

As far as having a budget vs. no budget...it depends on your goals. Do you wish to have $200, $2000, or $20,000+ saved by years end?

[not2late]

Re: Budget---where to start?

Don't transfer savings account monies into checking account monies---unless it's absolutely positively necessary (like if the hot water heater breaks and you need a new one ASAP.)

Look at your savings account money as extreme emergency money only---like if that hot water heater needs to be replaced or if the car is totalled and you need to put a down payment on another one.

Use your checking account money to pay off your monthly expenditures: that will also limit the amount of money you are spending, if you know you can't raid the savings account.

When your savings account reaches a certain amount, use half of the money to invest, like in a money market account or in a savings bond. Investing your money makes more money for you.

[jroche5998]

Re: Budget---where to start?

First thing to do before anything is write down ever single think you spend money on for a couple of weeks. I mean everything, down to the last penny. Then categorrize it and see where you can make easy improvements.

Second I have nothing more to add from what everyone else has said.

[boonie stomper]

Re: Budget---where to start?

Have your paycheck automatically deposited only part into your checking, say, the minimum amount you should need to spend plus an acceptable amount of extra for unecessary splurges such as eating out, and the rest into the savings. Out of sight, out of mind. Your paystub should list the net deposit to the primary accout, and the amount split off to your savings will be listed in the deductions part.