How to make sure you don’t have to go through debts again
Want to avoid being in debt again now that you have your debt behind you? Even if you can’t totally get out of debt this time around, you can still use these methods to save some money.
One of the ways to you can improve your life in general is to learn better money management. Think this means reusing plastic bags and driving a 15-year old car? Not at all. There are some very simple things you can do in everyday life which can add up to huge savings over the course of a month or year.
The “B” word – budget
Are you one of those people who needs to learn how to manage your money better?
Here are some questions you can ask yourself:
Do you feel really strapped all of the time for money, just barely covering your living expenses?
Do you see your credit cards as the only means to go on vacation, buy Christmas presents, or clothes for you or your family.
Track your expenses
You don’t have to go crazy here, but you would be amazed how many people are unaware of home much money goes in and out of their bank accounts on a regular basis. You don’t need to know your cash flow to the penny, but it helps.
Tools you can use to track your expenses:
Microsoft Money or Quicken.
You could use a spreadsheet program like Excel or Lotus.
You can even track you spending on some notebook paper.
Whatever you choose, write down everything. If you buy a can of soda at the gas station when you pay for gasoline, write down how much you spent for
"gas" and how much you spent on "meals eaten out". I know, a can of soda doesn't sound like a meal; if you don’t like it, then make up your own categories. You'll want to do this for three months, then average the amount spent for each category. Hopefully, your average monthly expenses will be less than your monthly income.
Prioritize
Once you have established your list of categories (and you can’t really be done until you’ve tracked yourself for the three months) is to put them in some kind of priority.
Put the most important on top, but don’t number them yet. For example: your mortgage, groceries, utilities, health insurance, etc. Now above, whatever you have put at the top of your list, put savings and investments. Already there? GOOD! You’re learning. Hopefully, the things you have listed at the bottom of your list will be things like movie rentals, dining out, etc.
Examine what you’ve spent each month on each category
You may be surprised at how much you've spent on items you believe are very frivolous. When I did this, myStarbucks expenditures were startling. Write down what you would like to spend next to what you are actually spending. Remember, the total of what you'd like to spend can't exceed your monthly take-home pay.
Figure out what you’d like to spend next month on each category
Most people can’t stick to a budget because the one they make for themselves is too complicated, is not fully supported by a spouse, does not plan for the unexpected, or is unrealistic, so they stop doing it. Here are some tips to help you come up with a winning formula:
GOALS - Don't make your budget goals something that you've got nothing to strive for. If you are spending $150/month dining out and you budget $125, you'll likely just become a poor tipper.
REALITY - If you're spending $80/month on gas, don't think you'll be able to drop that amount in half. Unless you are changing jobs so you're closer to home or thinking about biking to work, gasoline is a pretty static cost. The same goes with groceries and utility bills. These are fairly fixed costs. Don’t short yourself here or you will find yourself scrambling to find enough each month to pay basic living expenses.
UNITY – Is there a particular goal you are working toward? Maybe the goal is for Momto be able to stay home with the kids or the family paying off all credit cards and gettingout of debt. Budgets work best when everyone in the family understands and agrees on the end goal.
CONSISTENCY - An exercise program won't work if you don't stick with it. Neither will a budget. You have to be consistent, not on-again-off-again. If you spend more than you should one month, it's not the end of the world. Just buckle down and commit to doing better next month.
FLEXIBILITY - It takes time and experimentation to find a system that works for you. Also, things happen all the time that are unplanned. Do you have a little rubber in your budget? Be flexible.
Easy ways to find extra dollars in your current income
Save energy. Deregulation in some states has allowed electric and natural gas suppliers to compete for your business. Shop around for better deals. A more energy-efficient home can also help. There are some services both on line and in person which can give you an analysis of your home and make suggestions.
How about doing the simple things like turning up the thermostat in the summer and down in the winter to save on heating and cooling costs? Shutting down the computer when not in use? Turning off the lights when you leave the room?
Mortgage. Are mortgage rates so favorable right now that you could refinance and get a lower payment? How about getting rid of PMI (mortgage insurance)? Mortgage insurance is very expensive, but you can usually stop paying it once you have 20% equity in your home. If the value of your home has increased, contact your bank to learn how to stop paying this insurance.
Lower your long-distance bill. Examine your phone bills to see what you're paying for local, long-distance and wireless service. There are so many choices now to choose from, you are bound to find a better deal. Also, many people are choosing to use their cell phone free long distance minutes rather than the more expensive land-line calls.
Coupons. We all hate ‘em, but they do help to save you money. Do a little homework: can cutting coupons make a difference in your grocery bills?
Use your local library. Do you really need things like cable TV? How about borrowing movies from the library rather than renting them. And while we’re talking about the library, how about borrowing books rather than buying them? I’ve also heard many libraries have computer games for rent as well. Most libraries allow free use of the Internet as well, so you can think about canceling your internet access account.
Cut down on the use of your car. The expenses here are not just gas, but the wear and tear on your car. Can you use public transportation, walk or bike to work, carpool? Not only are these great ways to save money, but you’ll have a better social life and be in better physicalshape to boot?
Pack Your Lunch
Most people spend $5 - $9 each time they go out to lunch while at work. Most packed lunches of an apple, cookies or chips and a sandwich cost about $2 to make. Many micro-wavable lunches cost $1.50 - $2.50. You do the math.
Convenience foods are expensive
Have you heard the one about the frozen peanut butter and jelly sandwiches or the frozen microwavable baked potatoes? It’s not a rumor. A little extra effort in the kitchen can save you large dollars.
Avoid buying coffee in coffee houses
If you stop for coffee each morning on your way to work you're probably spending between $1 and $3. Bringing a thermos of coffee from home to work could save you $5 to $15 per week.
Free Checking
Another no-brainer way to pare expenses is by finding a checking account that's right for you. Don't let bank fees steal your money. Many programs offer reduced or no fees if you keep an account balance above a certain limit.
Avoid recreational shopping
For some people shopping at the mall is a way to unwind and relax. However, this can get very expensive if you’re buying things you don’t need. Find another outlet for yourself or cut down on trips to the mall.
Pay your bills on time to save on fees and penalties.
Credit card companies charge errant customers hefty fees for minor infractions. Pay your bill a day late and you could get slapped with a $29 fee. If the fee pushes you over your credit limit, bang, another $29 can hit your account. That's $58, for nada.
For other tips on saving money, we like the http://www.stretcher.com website.
******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
Want to avoid being in debt again now that you have your debt behind you? Even if you can’t totally get out of debt this time around, you can still use these methods to save some money.
One of the ways to you can improve your life in general is to learn better money management. Think this means reusing plastic bags and driving a 15-year old car? Not at all. There are some very simple things you can do in everyday life which can add up to huge savings over the course of a month or year.
The “B” word – budget
Are you one of those people who needs to learn how to manage your money better?
Here are some questions you can ask yourself:
Do you feel really strapped all of the time for money, just barely covering your living expenses?
Do you see your credit cards as the only means to go on vacation, buy Christmas presents, or clothes for you or your family.
Track your expenses
You don’t have to go crazy here, but you would be amazed how many people are unaware of home much money goes in and out of their bank accounts on a regular basis. You don’t need to know your cash flow to the penny, but it helps.
Tools you can use to track your expenses:
Microsoft Money or Quicken.
You could use a spreadsheet program like Excel or Lotus.
You can even track you spending on some notebook paper.
Whatever you choose, write down everything. If you buy a can of soda at the gas station when you pay for gasoline, write down how much you spent for
"gas" and how much you spent on "meals eaten out". I know, a can of soda doesn't sound like a meal; if you don’t like it, then make up your own categories. You'll want to do this for three months, then average the amount spent for each category. Hopefully, your average monthly expenses will be less than your monthly income.
Prioritize
Once you have established your list of categories (and you can’t really be done until you’ve tracked yourself for the three months) is to put them in some kind of priority.
Put the most important on top, but don’t number them yet. For example: your mortgage, groceries, utilities, health insurance, etc. Now above, whatever you have put at the top of your list, put savings and investments. Already there? GOOD! You’re learning. Hopefully, the things you have listed at the bottom of your list will be things like movie rentals, dining out, etc.
Examine what you’ve spent each month on each category
You may be surprised at how much you've spent on items you believe are very frivolous. When I did this, myStarbucks expenditures were startling. Write down what you would like to spend next to what you are actually spending. Remember, the total of what you'd like to spend can't exceed your monthly take-home pay.
Figure out what you’d like to spend next month on each category
Most people can’t stick to a budget because the one they make for themselves is too complicated, is not fully supported by a spouse, does not plan for the unexpected, or is unrealistic, so they stop doing it. Here are some tips to help you come up with a winning formula:
GOALS - Don't make your budget goals something that you've got nothing to strive for. If you are spending $150/month dining out and you budget $125, you'll likely just become a poor tipper.
REALITY - If you're spending $80/month on gas, don't think you'll be able to drop that amount in half. Unless you are changing jobs so you're closer to home or thinking about biking to work, gasoline is a pretty static cost. The same goes with groceries and utility bills. These are fairly fixed costs. Don’t short yourself here or you will find yourself scrambling to find enough each month to pay basic living expenses.
UNITY – Is there a particular goal you are working toward? Maybe the goal is for Momto be able to stay home with the kids or the family paying off all credit cards and gettingout of debt. Budgets work best when everyone in the family understands and agrees on the end goal.
CONSISTENCY - An exercise program won't work if you don't stick with it. Neither will a budget. You have to be consistent, not on-again-off-again. If you spend more than you should one month, it's not the end of the world. Just buckle down and commit to doing better next month.
FLEXIBILITY - It takes time and experimentation to find a system that works for you. Also, things happen all the time that are unplanned. Do you have a little rubber in your budget? Be flexible.
Easy ways to find extra dollars in your current income
Save energy. Deregulation in some states has allowed electric and natural gas suppliers to compete for your business. Shop around for better deals. A more energy-efficient home can also help. There are some services both on line and in person which can give you an analysis of your home and make suggestions.
How about doing the simple things like turning up the thermostat in the summer and down in the winter to save on heating and cooling costs? Shutting down the computer when not in use? Turning off the lights when you leave the room?
Mortgage. Are mortgage rates so favorable right now that you could refinance and get a lower payment? How about getting rid of PMI (mortgage insurance)? Mortgage insurance is very expensive, but you can usually stop paying it once you have 20% equity in your home. If the value of your home has increased, contact your bank to learn how to stop paying this insurance.
Lower your long-distance bill. Examine your phone bills to see what you're paying for local, long-distance and wireless service. There are so many choices now to choose from, you are bound to find a better deal. Also, many people are choosing to use their cell phone free long distance minutes rather than the more expensive land-line calls.
Coupons. We all hate ‘em, but they do help to save you money. Do a little homework: can cutting coupons make a difference in your grocery bills?
Use your local library. Do you really need things like cable TV? How about borrowing movies from the library rather than renting them. And while we’re talking about the library, how about borrowing books rather than buying them? I’ve also heard many libraries have computer games for rent as well. Most libraries allow free use of the Internet as well, so you can think about canceling your internet access account.
Cut down on the use of your car. The expenses here are not just gas, but the wear and tear on your car. Can you use public transportation, walk or bike to work, carpool? Not only are these great ways to save money, but you’ll have a better social life and be in better physicalshape to boot?
Pack Your Lunch
Most people spend $5 - $9 each time they go out to lunch while at work. Most packed lunches of an apple, cookies or chips and a sandwich cost about $2 to make. Many micro-wavable lunches cost $1.50 - $2.50. You do the math.
Convenience foods are expensive
Have you heard the one about the frozen peanut butter and jelly sandwiches or the frozen microwavable baked potatoes? It’s not a rumor. A little extra effort in the kitchen can save you large dollars.
Avoid buying coffee in coffee houses
If you stop for coffee each morning on your way to work you're probably spending between $1 and $3. Bringing a thermos of coffee from home to work could save you $5 to $15 per week.
Free Checking
Another no-brainer way to pare expenses is by finding a checking account that's right for you. Don't let bank fees steal your money. Many programs offer reduced or no fees if you keep an account balance above a certain limit.
Avoid recreational shopping
For some people shopping at the mall is a way to unwind and relax. However, this can get very expensive if you’re buying things you don’t need. Find another outlet for yourself or cut down on trips to the mall.
Pay your bills on time to save on fees and penalties.
Credit card companies charge errant customers hefty fees for minor infractions. Pay your bill a day late and you could get slapped with a $29 fee. If the fee pushes you over your credit limit, bang, another $29 can hit your account. That's $58, for nada.
For other tips on saving money, we like the http://www.stretcher.com website.
For The User
******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
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