Family Bailout Plan
Family Finances. I know it’s something we don’t want to think about in the midst of government bailouts, bank closings, layoffs and the dreaded “r” word, but, sadly, we must.
This week I want to touch on the topic of family finances and help you develop your own effective family budgeting plan- d.i.y. crea|tivi|ty style.
Trust me, I know how tough the past few (or not-so-few months) were on the average family’s purse-strings, but it’s time for a change. And despite how many times we heard the theme “change” last year, I think it’s what we need in order to survive in the current economic “crisis.”
A change in the way we budget our money is needed to stretch our dollars a little further this year- so maybe we’ll have more than change in the end.
Now I’m a firm believer in the power of writing things down. So grab a pen and paper and get started working on your budget! Here are a few helpful steps and examples of how I budget.
Step 1: Expenses
I always start by writing down my expenses:
I usually keep a monthly budget (rather than a primarily weekly or bi-weekly budget) because my bills and paychecks come on a monthly basis.
Categorize expenses: Firm bills (the same each month), variable bills (may vary each month) and misc expenses (things like gas, eating out, etc.)
Write it all down. Think about what you spend money on each month. Sometimes I have to break certain things down by week and add up to get the monthly amount.
Example: If I eat out for lunch about 3 times per week and at about $10 a time, times 4.5 weeks in a month. I spend about $135 per month eating.
I always round my expenses up to the nearest hundred, just to be safe. Here’s a sample.
Once I add up everything, I discover I have $3200 in monthly expenses,
-$2600 for monthly bills.
-$600 for miscellaneous expenses.
Step 2: Income
I outline my income.
Tip: Always calculate your income using the amount you get after taxes are taken out.
Obviously, if your expenses outweigh your income you have a problem. But it’s not the end of the world.
Think of some ways you can cut costs or earn extra income. See my tips below.
Step 3: Track Spending
The trick to maintaining a good budget is being vigilant. For most people, gone are the days of balancing a checkbook- but it’s definitely a skill every family needs.
I use my “income vs. expenses” information tokeep a weekly/daily account of my budget/money on a calendar/planner.
What helps me too is that on my calendar I keep an account of when all my bills are due, how much they are and how much money I have available on any given day.
As you can see, I may sometimes go over my weekly allowed “misc budget” but I usually try to make up for it other weeks. It’s really important to budget for miscellaneous expenses and then some.
Obviously this sample is a pretty tight budget, but it’s always better to budget with a tight grip and have more left over. In the end you want to be able to save as much as you can.
My way may not work for you, but I promise it will get you on the right track.
I’ve included a worksheet you can download to help you with your budget.
DOWNLOAD MONTHLY BUDGETING CALENDAR
d.i.y crea|tivi|ty financial tips & tricks:
Ways to cut costs:
1. Get your interest rate reduced on credit cards. Try to work out a better agreement with your bill collectors. Contrary to popular belief, most are willing to work with you. And if that doesn’t work you can always try my husband’s favorite trick “If you don’t give me a lower rate, I’m going to cancel my service.”- Oddly enough, it works every time.
2. Avoid late fees by paying your bills on time.
3. Cut the unnecessary stuff. Do you really need to eat out so much?
4. Don’t be afraid to use (or ask for) discounts. Taking classes at a local university or college? Have a student ID card? A lot of places give student discounts. Also find out if your current employer gets a discount for any services you use. For example, my husband and I get 15% off our cellular service bill because of his employer.
Ways to earn extra income:
1. (Obviously) Another job or work extra hours
2. Sell things you don’t use. That elliptical machine in your garage that you keep saying you’re going to start using, sell it.
3. Sell yourself. Not what you think, I promise. If you have any special skills that you can market or even just extra time on your hands, think of ways you can use those skills to make money on the side. Keep it legal, people.
Extra tips to save some green:
1. Sign up for a grocery store discount card wherever you shop. Saving an extra $.10 here and there really adds up. Also be sure to do your research on grocery store prices.
2. Buy seasonal items after the season. I saw a woman buying a Christmas tree on December 29 for 60% off. Also keep in mind when stores start getting rid of their seasonal clothes. Target recently had gloves and hats for 50% off as they made room for the bathing suits.
3. If you pay for electricity, unplug your computer and phone chargers when you’re not using them. Many AC adapters still pull electricity when they are not in use.
What are some budgeting tips and tricks you use to keep your finances in order?
Note: This does not reflect my actual salary, expenses, etc. -just an example. 🙂
— Written by Tivi Jones, Marketing Coordinator for Carolina Parent, writer, author and founder of d.i.y. crea|tivi|ty, a new blog that offers Triangle residents information and how-to’s on the coolest d.i.y. trends.