We’ve all read the budgeting tips given to us by the experts. Stuff like, “make and take your lunch to work instead of going out to eat,” or “dry clean your clothes at home rather than take it to the cleaners.” But what about those of us who don’t dry clean or eat out? What tips are there for us?
Well, if you’re already doing everything the experts tell you to do and it’s still not enough, here are some tips for you.
First, we have to start with the basics. All experts agree (and I’m no different), you need to know your finances. As hard as it may be to face them square in the eye, you need to know how much money is coming in each month and how much is going out.
Most of us would rather have our teeth pulled than have to confront this ugly monster. But it is best to just get it out of the way. (See the Resources for some great worksheets to help you figure out your monthly income and debt.) Once you know this, you can come up with a budget that puts you in control of your finances, not the other way around.
Now that you have figured out your budget, you need to know how to work with what you’ve got. If, you find, there’s not enough money coming in each month to cover all of the expenses, you can do one of two things (neither of which is easy): You can eliminate some of your expenses (i.e. If you have cable, cut back to basic cable, or cancel it all together and make do with fuzzy network television), or make more money (find a second, third, or fourth job to help supplement the income).
For some people this won’t be a big deal, for the rest of us, it is down right painful. Figure out which of your expenses are unwavering (stuff like the gas or electric bill, credit cards, rent or mortgage payments, insurance, etc), and which are “luxuries.” This can be difficult, because we like our luxuries and tend to rationalize their necessity. These are things that we like an awful lot, but don’t truly need, cable TV being a prime example (but not the only one).
Luxuries include anything but the basics. Luxury costs can be found on your phone bill (the call waiting, call forwarding, answering services, etc.), cable bill, Internet bill, or grocery receipts (name brand vs. generic). It is up to you to decide what you truly need, not what makes your life easier. If you find yourself over-rationalizing an expense, chances are you don’t need it. (See the Resource links for help figuring out what you need and don’t need.)
I found that most of my extra expense each month went to groceries and gas. With the rising cost of gas, there wasn’t much I could do to stem that expenditure. When possible, I walk instead of drive, or carpool. I make sure my tires are inflated to the correct pressure, and have maintenance done as regularly as I can afford it. As for groceries, well, we’ve all heard the basic tips: make a list and don’t deviate from it (easier said than done), know the specials each week, use coupons, buy in bulk, etc.
Even after I followed all of the rules, it felt like I still wasn’t saving a tremendous amount on groceries. I tried everything. I even wasted a great portion of an afternoon scouring the web for coupons (unless you have a lot of time on your hands, I wouldn’t recommend filling out web surveys or visiting product site after product site to find discounts or coupons. Your time is your most precious commodity and you need it to work for you). Besides, they don’t make coupons for Generic brands.
Instead, take a look at your family’s diet. What foods do you like the most? Do you like variety or consistency? Are there special diet needs? Are there certain products you can’t get around buying? For example, I have a friend whose son is allergic to certain additives in detergents, so she must buy allergen free soaps.
Make a list of your staples (milk, eggs, butter, pasta, etc) and, eliminate the Doritos and Oreos. Look for recipes that might incorporate your staple ingredients. You’d be surprised how creative you can get with a potato, a couple of eggs, and some spices. (See the Resource links to find a great site for quick, easy, and inexpensive meal ideas.)
Next, shop around. Your grocery store may not be the most cost saving. The grocery store closest to me is awfully convenient, but the prices are a bit steeper than the store across town. Once a month, with my list of staples in hand, I will venture across town and load up on 50¢ cans of black beans, tuna, cream of mushroom soup, etc. I also try to eliminate those quick stops to the grocery store on the way home from work.
Whenever possible, I visit the local farmer’s market, where I usually find better produce at an equal or lower cost than at my grocer. (AND I feel better about myself because I’m supporting the local farmers).
OR, you can always consider growing your own food. There once was a time that every household had a kitchen garden. Green thumb or no, simple vegetable and herb gardens can be grown easily in the smallest of spaces and they allow you to reap the benefits. (Gardening is also an inexpensive hobby that has been shown to help balance out daily stressors). If this interests you but you don’t know where to start, check out the Resource links.
Hidden expenses can usually be found on things like banking, credit card, and utility statements. They usually come in the guise of maintenance or late fees or higher interest rates.
When I opened my checking account several years back, there was no such thing as absolutely “free” checking. Because of this, I’ve endured a $10 maintenance fee each month, for years.
Tired of the fee, I went to a competing bank and got information on their free checking account, then walked across the parking lot to my bank and asked them why I shouldn’t just close out my account and open a free account with their competitor. After a very polite conversation, my bank agreed to wave the monthly maintenance fee. It took a little extra leg work on my part, but the $120/yr I saved meant that I could apply an extra $10 to my student loan payment each month. That $10/month cut my loan term from 18 years to 15 years, in essence, saving me almost $500 in interest payments, and eliminating my debt 3 years earlier than planned. It’s the little things like this that can make the biggest difference.
Credit cards are probably the most egregious offenders, and the most difficult with which to deal. No one likes calling up the credit card company and arguing about payments or lack thereof (That is, if you can even get a hold of an actual human being).
What you have to understand is, they make it hard for a reason. The harder it is, the more people simply do not want to deal with it, and the easier it is to continually charge higher interest rates and fees.
This is another one of those instances where you just have to deal with it. As Nike would say, “just do it.”
Experts agree, that once you get your credit card people on the phone, don’t let them go until they give you something. You may have to speak to several people (always making sure to get their names). If the first person can’t help you, ask for their supervisor. If that supervisor can’t help you, ask for their manager, and so on. Sometimes they may only be willing to wave your yearly fee, but at least that’s something.
Making more money
In theory, this sounds like a great idea. “Of course! Why didn’t I think of that? Just go out and make more money!”
Well, it may not be as difficult as pulling out the want ads or hitting the pavement in search of another job. But if you have the extra time, and could stomach another job, you might just check out businesses close to where you live or shop. A 10 -20 hour a week job could bring in an extra $100 per week. Don’t think that sounds like much? Consider that $100/wk equals $400/month, or $4800/year. Think how much debt that could eliminate.
Do what you love
Is there something that you enjoy doing? Teaching? Gardening? Drinking Coffee? Shopping? Working on cars? With a little creativity, you can parlay your interests into an income by offering your services to friends, neighbors, or coworkers. You could also seek out businesses that speak to your interests to see if they need part time help. Who knows, you may even get bonuses from the job (i.e. Working in a coffee shop might get you a free pound of coffee a week).
If that’s not feasible, then you have to be a bit more creative. The Internet provides a lot of opportunities, depending on your time, resources, and interests. If you have a Web site or a Blog, you can become part of an “affiliates” program for companies like Amazon.com, A&E home video, etc. wherein you can place a link or an ad on your site. If anyone clicks on that link and buys something from the site, you get a percentage of that sale. And then, of course, there’s always eBay.
No matter what your situation, budgeting starts by getting to know your finances and your spending habits. Once you are familiar with this, you can begin regain control of it. The simplest way to do this is to get back to basics. Figure out what your necessities are and simplify.