Budget Your Way to a Fresh Start

 The fastest way that I know of to get a real fresh start on your financial life is to build a realistic budget and then stick to it!

  • Housing (rent or mortgage)
  • Insurance premiums
  • Car payment
  • Utilities
  • Child care costs
  • Debt payments (credit cards, personal loans, etc.)
  • Car and home maintenance

Then, list the expenses that you have some control over, that may change from month to month:

  • Groceries
  • Savings
  • Medical costs
  • Monthly fees and subscriptions
  • Gifts  (Christmas, birthday, etc.)
  • Entertainment

For those expenses that fall outside your normal weekly or monthly budget, you’ll want to be sure to set some money aside so that you are able to pay them when the time comes.  For example, if you pay your homeowner’s insurance annually, you’ll need to save a certain amount of money each time that you get paid for your homeowner’s premium.  (Don’t make the mistake of thinking you’ll save for it later or that you’ll come up with it somewhere – you won’t!)

Now, you’ve listed your income and your expenses.  The difference between your income and your expenses is your net gain or loss.  If your income is greater than your expenses, then you can probably save a little more or have a little extra spending money.  But, if your expenses outweigh your income, then you need to be looking for ways to cut corners.  Clip coupons on groceries, cancel the upper tier cable channels, skip dinner out once or twice a month, or if you’re seriously in the hole, you may decide that you need to find a second job or an additional source of income.  Whatever your financial situation – you cannot do anything about it until you’re aware of it!

Don’t just stop with the budget!

Now that you’ve made a budget, and you’re well aware of your true financial situation, don’t just walk away from it.  Pay attention to your spending.  Sit down each and every month and study your receipts.  How does your actual spending compare to your budget?  Are there places where you can cut corners?  And are there places where you underestimated the expenses and need to readjust your numbers?  The more you begin to pay attention to your spending, the more that you’ll notice when you overspend, and you’ll find that you will subconsciously start to live within your means very quickly.

Fortunately, with so many free tools available today, you can easily keep track of your budget on your phone, your laptop, or even with an old fashioned pen and paper.  Whichever way you choose, just be consistent.  Sit down, study your income and your expenses, pay your bills, and start putting back any excess for that emergency fund.  You’ll be surprised by how quickly you can get your finances under control if you just work at it!

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Breaking the Cycle of Living Paycheck-to-Paycheck

Do you make a decent living yet see yourself counting on that next paycheck to survive? A recent study (PDF document) conducted shows that 47 percent of Americans are living paycheck to paycheck. Whether it is due to poor budgeting skills, or perhaps not knowing how much to save a month, people are finding it hard to break out of that cycle.

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If you are looking for ways to stretch your pay and break that cycle, here are some things to pay attention to.

Pay attention to where your money is going.

I’ve written about our family’s journey of overcoming debt. One thing I learned, absolutely nothing will change if you aren’t keeping track of where your money is going each payday. You should have a budget set as well as a method of tracking your spending. You will not be in control and break the cycle without both of these working together.

Pay attention to what your budget says.

Your budget shouldn’t be flexible; this mentality makes it awfully hard to save. Once you make your budget, you should not be changing it unless you have to add to it, or adjust the numbers based on the amount of the bill. This skill was also something me and my spouse had to learn. Also, don’t skip out on paying a bill one month so that you have a little extra spending cash. If you have no disposable income at the end of the month, what are some things you can do to fix this? Perhaps you can pick up some more hours at work, or a part time job? You can also get rid of unnecessary bills and spending, using the money saved, open a separate bank account. A great way to reduce the chances of using this money is to either not request a debit card, or never carrying it with you. This will help with the temptation of spending.

Pay attention to what your spending says.

Going back to what was said above; tracking your spending will be helpful in determining how much you are spending monthly on things that are not in your budget. Are there any areas where you can reduce spending? Perhaps you like to eat out frequently, or like to go to the movies. If you are seeing a frequent spending pattern, consider cutting down or going without completely until your spending is under control. This can be harder to do, but once you see the money saved at the end of the month, it will be a sacrifice well worth it.

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‎04-10-2017 07:10 AM

Content provided courtesy of USAA.

By Angela Caban

Creating a Realistic Budget

It’s February; shouldn’t we already have our 2017 budgets created? If you don’t, please don’t beat yourself up about it. It is never too late to start planning and budgeting for the year. If you already have your budget created, perhaps there is something that you missed or need to change?

How do you create a budget and keep it realistically flexible enough to meet the needs of you and your family?

First Progress Platinum Elite MasterCard® Secured Credit CardI have seen my budget fail four times. Why? Because it wasn’t realistic. We all want to be in a place where we are saving as much as we can and have little to no debt. It’s easy to sit down and write numbers down, such as “I want to put $1,000 a month into savings”, but what if that isn’t realistic. What do you do?

Here are 3 Ways to Create a Realistic Budget

Analyze Your Spending

You need to know what you have coming in and going out each month. Step one is to review all bank accounts and credit cards statements for at least three months. This will give you a good picture of where you stand for the month.

Categorize

Using the Zero-based budgeting method (which is my favorite), list all your expenses for the month. Zero-based budgeting is a method in which you count all the money coming in, every single penny.

Once you have the amount of all the money coming in, you then make categories for all your expenses. By the time you add your budget for each expense, you should have a total of zero dollars at the end of the month. All the money is accounted for, but again, be realistic with what you are spending so that there are no surprises at the end of the month.

Track Your Spending

Even though you have your budget, you should always monitor what you spend. Because life happens and there will be moments when you may have to move some of the numbers around. Try to only do this during those emergency situations (car troubles, medical issues, etc.). Using an app on your phone may be helpful; I currently use Every Dollar and Money Manager.

Maintaining your budget is hard work, so reward yourself. If you stay well within or below your budget, treat yourself out for dinner or a movie. It is a nice reminder that while you are saving, you are also working hard and deserve a treat for a job well done.

 

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‎02-13-2017 07:20 AM

Content provided courtesy of USAA.

By Angela Caban