Budgeting 101

Budgeting on a Low Income - Money Tips
Here are a few additional money-saving tips that may help you get your budget in order.

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1. Don't keep cash in your wallet if you can help it.

2. Use your cash card, NOT your credit card, for all purchases and keep careful account of how much you spend; and what you spend it on. For those of you who have a hard time holding on to the cash in your wallet and if you have discipline and you have one card, like an American Express for example, use it for your necessities ONLY. I use my American Express for groceries, transportation, weekly lunches, etc...things that I would have to buy ANYWAY. If you are not disciplined, however, this technique may not be the best for you. You may just want to put a specific amount of cash in your wallet for the week; for example $40/week, and just make it last. When you see yourself getting down to the last $15 dollars...slow the spending down.

3. Use your credit card only when you already have the money for the item or service you are purchasing, or at least most of it. Nothing puts people on low incomes into debt as easily as incorrect use of a credit card. You need to be able to pay off the debt WITHOUT PAYING ANY INTEREST, which means the whole amount needs to be paid as soon as it's due. ****If you have are not able to pay your credit card off as it comes due each month, the only solution might be to cut it up and throw it away.

MISCELLANEOUS TIPS

1. Preferably, cut out long-distance phone calls and ask family and friends to ring YOU. If you can't, at least cut down on the number of calls you make. Try to make all such calls when your phone company has a special "bulk" deal that you know you can afford. If you have a "free night and weekend" deal on your cell phone, save your long-distance and other conversations for those time frames...believe me, you will see the difference!

2. If you spend $5 a week on your state lottery, you could save $260 a year--with a 100% chance of winning!

3. If you smoke, make a determined effort to give it up. This may be very hard but it's well worth the trouble: you'll feel better and pocket a huge savings.

4. Concerts, plays, films, video rentals, etc, may also be off budget. Remember, if it's not necessary to survival...Also, go online and checkout some free cultural activities that may be going on in your area. I do hope at least some of these tips help you. They may even lead you to some more ideas of your own to save money. Finally, good luck with your budget! You will find peace of mind in your new found financial freedom!

$$$create GOOD habits$$$

Yes, when it comes to money, we create and maintain habits…the habits you form while managing your own finances will determine your financial future—success or failure. Here are some steps you can take today to plan for financial independence tomorrow.
Become a Saver
You'll want to save for a variety of reasons. Three of the most important are retirement, emergencies, and major purchases.
Retirement
When your parents/grandparents grew up they new they worked hard and just assumed that the company would take care of them in their retirement with a generous benefit retirement pan. It worked—and many people are today benefiting from it. But boy, things have changed. Today, we cannot depend on companies or employers to provide us with retirement…you HAVE to participate…If you haven't already…Wake up now!
Fortunately, the government is beginning to realize that reality and has begun providing vehicles for retirement savings. 401(k) and 401(b) plans are workplace-based programs. IRA's come in a variety of forms. Which variety may be for you depends on your individual circumstances. If you haven't done so already, check at work to see what is available. If no vehicle is available at work, check out IRA's. Discount brokerage firms (like Fidelity) are a great place to start. Don't feel that you need to put in the maximum if you can't afford to. Start with something, however.
Emergency Fund
You're driving along and suddenly your car starts making a new noise. You go into your mechanic and you find out that noise is a symptom of a $500 problem. The more you get into adult life, the more situations like this you will find yourself in. Once you become a homeowner, not only the car, but the water heater can blow as well. You should try to have from 2-6 months in an emergency cash (liquid…aka…accessible…not in the market…in a high yield interest savings account…perhaps a money market) fund to cover any unexpected events and/or expenses. Having such a fund will have you sleep better at night…trust me. Even if you can't build that all up at once, start with a little bit each paycheck.
Goals
Once you've begun putting a little away for retirement and have set up a fund for emergencies, start saving toward a goal. Want a new car? Want to go on a cruise? Start putting away a little each month. This money should not be in stocks, though a short-term bond fund may be okay if your goal is more than four or five years away. Money market funds, CD's, and savings accounts are good vehicles for this type of savings.
Avoid the Debt Habit
Think long and hard about purchases before springing for them. Ask yourself…DO I "need" this or do I "want" this? The answer to that question can make a difference between life or debt :) Only borrow money for purchases that either a) make a difference in the quality of your life or b) you cannot continue to live without it (like a reliable car—common people I am not talking about designer sunglasses!) That's how it often starts. People get in the habit of borrowing thinking that they can pay it off easily. Then they hit a bump in the road and what they thought was going to be a small payment becomes overwhelming.
Cut Costs To Reach Your Financial Goals Faster
It is amazing how quickly money can slip through our fingers…Keep track of those dollars and you will see how that money adds up—FAST!!• Avoid the fast food trap. At my workplace, there are a couple of people who do fast foods almost every day for lunch. When I buy gas early in the morning, I often see people spend $3 or $4 in the convenience store for breakfast. Do this every day and the cost can easily be $120. Eat breakfast at home and bring your lunch and you can easily save half of that leaving more money for eating with friends at real restaurants and saving toward goals.
• Use grocery coupons—you can save a lot of money by doing a little bit of work. Plan ahead—I go shopping once or twice a month and plan ahead with coupons and I also go to stores that do double coupons and price comparison—it saves me 5 trips to different grocery stores and saves me money in the long run.
• Buy when on sale Almost everything in a department store goes on sale. Need clothes or something for the house? It will probably go on sale somewhere in a couple of weeks.
• Consider buying gently used item Experts say that if you buy a 2 or 3 year old car in good condition and keep it through its useful life, you will save 40% on car costs over buying new. As you continue on your financial journey remember these tips…save, stay out of debt and consume wisely. It may be a little more effort and sacrifice but the peace of mind that you will get will be worth it!