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Archive for December, 2011

Budgeting after the Holidays

December 22nd, 2011 at 10:33 am

So the holidays are over. You've bought everything from baby dolls to power tools and your wallet is begging for mercy. Your credit cards have been worn to a nub. Sound familiar?

If you find yourself in dire financial straits and would like to remedy the situation, follow these ten steps to make your wish a reality:

1. Stop spending. I know this may seem overly simplistic, but sometimes, when you get in the habit of spending money, it's not an easy habit to break. Because you were out and about, you may have become accustomed to picking up a latte in the afternoon to rejuvenate yourself, and that's all well and good, but you will not be able to achieve your goal if you nickel and dime your money away.

2. Find out the full extent of the damage. Go through all of your receipts and credit card statements, and try to organize everything in one place—in the form of a list, on a spreadsheet, whatever strikes your fancy. The key here is to be honest with yourself, and to organize everything as efficiently as you can, so you have the most accurate picture of your finances.

3. Look at what you owe. Instead of thinking of these as several small bills, look at the overall amount, and divide it by however many months you think you can reasonably have your debt paid down. The key word there is "reasonably".

4. Pull out your current budget. If you don't have one, make one. This can be done by simply taking note of your income, then noting all of your expenditures (separated into various categories), then doing a little math. Once you have your budget in front of you, take the monthly amount that you calculated in step 3 and plug it into your existing budget.

5. Don't panic. You will undoubtedly notice that you suddenly have a lot less disposable income, but surely you saw this one coming. The only way you will be able to keep your head above water is if you learn how to tighten your belt and need/want less.

6. Start to brainstorm on ways to save money. Clip coupons, seek out sales, hit the discount bins…whatever it takes. Just refer to step #1, and when you must spend, do it as frugally and wisely as you can.

7. Learn to enjoy your frugal lifestyle. Don't think of this as a momentary lull in your spending before the holidays roll around again. Embrace frugality! There are plenty of places you can go that are free or almost free, and there are many things that you simply don't need. By reprioritizing your spending, you won't have to do this again next year.

8. Allow yourself a tiny treat here and there. While I staunchly advocate living a thrifty lifestyle, there are occasions when you deserve to treat yourself. Go for it! Be wise about your "treat"—don't let it be anything more than $20 unless it's for a really special occasion—and don't allow yourself too many of them, but all work and no play makes Jack a dull boy. By treating yourself on occasion, you will better able to maintain your penny-pinching ways.

9. Start saving and shopping for the holidays early. Always look at discount and dollar bins, and any sale that you come across, in order to make small purchases throughout the year (rather than waiting until the last minute and doing panic-shopping). If you can, pay for these gifts with cash, and set a limit on how much you will spend on each person.

10. Maintain your resolve. There will undoubtedly be moments when you are tempted to slip back into your old spending ways, but be strong and resist the urge. Remember how horrified you felt when you saw how deeply in debt you were, and how good it felt to slowly climb out of your financial morass. Don't get caught back up in the spend-owe cycle. Open a savings account instead, and place any money you were tempted to spend in it instead.

Budget and Reality: Combining Both

December 21st, 2011 at 08:20 am

When you're managing the budget for a family of four, it's tricky enough. You have to know precisely how much you and your significant other are bringing in and when, and you have to be able to make this income stretch to meet all of your family's needs. Now, imagine that you are a family of three – that is, a single parent with two children relying on you for all of their needs.

This is where it starts to get really tricky. Whereas before, you have two breadwinners pitching in, and there was sometimes money left over for "fun things", those days are long gone. Now you understand what it feels like to be the end-all-be-all for everything—judo classes, ballet lessons, schoolbooks, a wardrobe that must keep up with ever-growing children—plus have enough left over every month for those pesky bills and your mortgage payment.

So what should I do?

If you find yourself in a situation like this, the first thing to do is try to take it easy on yourself. Avoid comparing your finances to anyone else's, even another single parent. Instead, encourage yourself at every turn, even—especially—when things seem to be going to roughest. By keeping your confidence high and your optimism intact, you are more likely to stay on track with your intended budget, and avoid behaviors like impulse shopping and overspending.
Yeah, all of that sounds great, but how what should I do next?

After you are confident in yourself and your abilities, then roll your sleeves up and get to work. You should basically start to think of everything that you buy as taking away from possible future purchases. In this way, you can start to see where you are nickel-and-diming your money away, and you will be able to reign in spending. Even simple steps like clipping coupons, packing a lunch, and investing in a reusable water bottle and filling up at the tap can help you save tons of money.

As you're focusing on these "small details", also start to take note of which bills are due when and how much these bills are on average. Once you have a good idea of when all of your bills are due, decide which bills will get paid with which paycheck (for example, electricity, cable, and phone will be paid with first paycheck of the month, rent and car insurance will be paid with the second). If you must, list everything out for the next six months, with your pay dates heading columns that contain which bills are due at that time.

Finally, start looking into a budget worksheet, where you can organize everything into one place and see at a glance where your money is being spent, how much will be left over every month, and so forth. This way, you can be sure that all of your money is being well spent, and the likelihood of actually having extra money every month increases.

And on a final note…

While I may have made this seem very simple and cut-and-dried, the reality is that, depending upon the state of your financial affairs, this process may take weeks, or even months, to fine tune. If you are contending with debt in addition to your everyday expenditures, then it may be daunting to see everything written out on paper.

However, the more organized you are throughout this process, the easier it will go overall. Additionally, if you are honest with yourself, and cut yourself just a little slack, then what may have seemed hopeless at one point will now seem much more bearable, and you will understand that you are not alone. There are many others who share your frustration, but you can and will make it through this in one piece.

Wedding Budgeting

December 19th, 2011 at 08:45 am

In today's economy it can be difficult to see how you can have the wedding you want without going into massive debt trying to pay for it all. The key to having a wedding you'll be happy with while avoiding an empty wallet is effective budgeting. Effective is the key word there. It doesn't matter how meticulously you've planned your expenses if you don't stick to the plan.

The first step toward working within a reasonable budget is to create your budget in the first place. Figure out who's going to be paying for the wedding; will it be the bride's parents, both sets of parents, you or some other combination? When you figure out how much each contributor can and will put into the wedding, you can start to plan your individual items and look for savings when you need to. Having a hard limit for your wedding is a crucial step because it gives you boundaries and forces you to be creative with your planning.

Discounts

Don't neglect the value of free coupons and bulk discounts. Saving a few cents per wedding favor or invitation could add up to hundreds of dollars in the end. Every time you find a way to save money without sacrificing too much time or compromising your wishes will be worth it in the end.

The Dress

Purchasing a dress from a bridal salon can end up costing more money than you're comfortable spending, but is that the only way? Definitely not! If you have a love for vintage clothing, try looking for classic dresses at consignment shops or antique stores that you can have altered to fit. Though it's not for everyone, if you or a close friend or family member is handy with a sewing machine, you can consider making your dress yourself. Even if you buy your dress at a bridal store, you can take it somewhere else to have it altered if the store is asking too much for alterations.

Favors

Providing wedding favors for your guests is a popular tradition that nearly everyone follows. If you want to provide fun wedding favors but don't want to spend a lot of money on them, consider combining them with your décor. Floral centerpieces, candles and fun thrift store jewelry can make excellent little takeaways from your wedding. Also, consider buying items in bulk and finding stores that are going out of business.

Food

Traditional catering options can be expensive. Even if the caterer only charges $9 per person, with even 100 guests you're looking at close to $1000 just for the food. There are a few methods for dealing with this conundrum, however. Try having your wedding in the early afternoon and serving appetizers and desserts. If your wedding and reception take place between lunch and dinnertime, your guests probably won't be that hungry and you can save some cash on food. Another technique that's certainly not for everyone is asking your guests or a few close friends to contribute to the meal by bringing their favorite dish or baking cupcakes for the guests. Depending on how inclined your guests or friends are to bring food in lieu of a gift, you could end up saving money and sharing in some of your guests' favorite recipes!

Budget and Reality: Combining Both

December 19th, 2011 at 06:59 am

When you're managing the budget for a family of four, it's tricky enough. You have to know precisely how much you and your significant other are bringing in and when, and you have to be able to make this income stretch to meet all of your family's needs. Now, imagine that you are a family of three – that is, a single parent with two children relying on you for all of their needs.

This is where it starts to get really tricky. Whereas before, you have two breadwinners pitching in, and there was sometimes money left over for "fun things", those days are long gone. Now you understand what it feels like to be the end-all-be-all for everything—judo classes, ballet lessons, schoolbooks, a wardrobe that must keep up with ever-growing children—plus have enough left over every month for those pesky bills and your mortgage payment.

So what should I do?

If you find yourself in a situation like this, the first thing to do is try to take it easy on yourself. Avoid comparing your finances to anyone else's, even another single parent. Instead, encourage yourself at every turn, even—especially—when things seem to be going to roughest. By keeping your confidence high and your optimism intact, you are more likely to stay on track with your intended budget, and avoid behaviors like impulse shopping and overspending.

Yeah, all of that sounds great, but how what should I do next?

After you are confident in yourself and your abilities, then roll your sleeves up and get to work. You should basically start to think of everything that you buy as taking away from possible future purchases. In this way, you can start to see where you are nickel-and-diming your money away, and you will be able to reign in spending. Even simple steps like clipping coupons, packing a lunch, and investing in a reusable water bottle and filling up at the tap can help you save tons of money.

As you're focusing on these "small details", also start to take note of which bills are due when and how much these bills are on average. Once you have a good idea of when all of your bills are due, decide which bills will get paid with which paycheck (for example, electricity, cable, and phone will be paid with first paycheck of the month, rent and car insurance will be paid with the second). If you must, list everything out for the next six months, with your pay dates heading columns that contain which bills are due at that time.

Finally, start looking into a budget worksheet, where you can organize everything into one place and see at a glance where your money is being spent, how much will be left over every month, and so forth. This way, you can be sure that all of your money is being well spent, and the likelihood of actually having extra money every month increases.

And on a final note…

While I may have made this seem very simple and cut-and-dried, the reality is that, depending upon the state of your financial affairs, this process may take weeks, or even months, to fine tune. If you are contending with debt in addition to your everyday expenditures, then it may be daunting to see everything written out on paper.

However, the more organized you are throughout this process, the easier it will go overall. Additionally, if you are honest with yourself, and cut yourself just a little slack, then what may have seemed hopeless at one point will now seem much more bearable, and you will understand that you are not alone. There are many others who share your frustration, but you can and will make it through this in one piece