Tuesday, October 29, 2013

Budgeting Part 2--Things Every Goddess Should Know

In part 1, we discussed figuring out where your money goes. Maybe you made a list of what you spent, or maybe you spent the past month tracking where your money went. You should now have a list in front of you of where your money is going.

Most of your fixed expenses are exactly that--fixed. You have very little control over how much you have to spend on insurance or your rent. You may be able to bring those down by shopping around. You can do some research and find out.

For things like heat or electrical, you can make an effort to turn off lights and unplug seldom used appliances when not in use. If something is plugged in, it still draws some electricity out even when not in use.  Maybe you can turn the thermostat down a couple of degrees and wear a sweater. (Never turn your heat below 55 degrees. You need to be aware that going too cold could be a danger if your water pipes are not insulated. Check with an expert.) You can take shorter showers to reduce the water bill. 

Chances are the most room for change is going to be in your other expenses. Many people have no idea how much they spend on coffee or going out for drinks.  It can be hundreds of dollars every month.  Maybe you should nurse one drink at the bar instead of having three. Maybe you should make your coffee at home a few times a week.  Do you buy lunch out every day at work?  

Try making small changes to how much you spend on these.   If your entertainment costs are high, try checking out a free show or getting passes from your local library. Many libraries have free or discounted passes to museums, aquariums and local spots.  Libraries are also a great source of free DVD and CD rentals. Do you need to see that movie in the theater or can you wait a few months and borrow it for free?   I save hundreds of dollars every year by borrowing books, magazines, movies, CDs and video games from the library.

Groceries are a non fixed expense that usually has room to decrease. Are you throwing out food because it is going bad in the fridge? Do you toss leftovers instead of saving them for the next day?  Most people throw out a lot of food because they don't eat what is in their fridge. Eat leftovers every couple of days. Check out what is for sale at the grocery store and buy what is cheap.  Look into coupons.  Check out store brands; many of them are just as good as the big names.

Use the money you save to pay down debt--see my earlier post on the debt snowball--or put it in savings to work towards something better. The down payment on a house or buying a car are a couple of examples of things you should save towards.

Sunday, October 20, 2013

Budgeting Part 1--Things Every Goddess Should Know

Money is a tough subject. It is a huge part of our daily lives. We need it to eat, to have a roof over our heads and to do any number of things. Yes the best things in life are free but we often need money to have the chance to enjoy the rest.

Because money is so important, it is something we need to consider in how we live our lives.   One way to do this is to keep a budget.

The first thing to do is to figure out where your money is going.   Make a list of all of your necessary expenses. For instance,

Car payment
Cell phone
Cable bill
Gas or bus pass
Student Loan

Next make a list of your other expenses. For instance,

Eating out
Coffee -takeout

If you spend a lot in the Entertainment category, you may want to break it down further. Such as movies, going to the bar/club, books, etc.

Use your credit card statements or checking account to figure out where your money is going. If it is not obvious, then it is time to do some tracking.  For the next month, write down every penny you spend. Keep your receipts in an envelope. If you don't get a receipt, write what you spend, where and what it was on, on a piece of paper and put that in the envelope. At the end of the month, add it all up and write out what you spent in each category.

Once you know where your money is going, you can figure out where you need to cut back. You will be surprised where some of your money goes.