5 Tips on Starting a Budget at Home
If you need to save money, it is very important that you start a budget at home. Although you may think that there is no way you can cut corners, the truth is that there are ways you can do it. You can cut corners in areas that range from your utility bills to how much you pay for groceries each month. If you save money in just these two areas alone, you may be pleased to find that you can save quite a bit of money. If you apply this to all areas of your life, you will be amazed that saving money is so easy.
So what are 5 tips that you can use to start your budget at home?
- Organize all of your bills each month and determine what it is you are spending on average each month. It is important for you to determine this so that you can get an idea of how much money is actually going out.
- Make sure you accurately figure how much money is coming into the home on average. By doing this, you are able to compare what it is you have going out and what it is you have coming in. If you do the math, you can then see what it is you have left each month. If not a lot, you may want to consider credit counseling on your unsecured debt.
- After you have determined how much money you have left each month, it is time for you to take a look at your bills and see what you can reduce and what you can’t. For example, you may not need that text messaging package on your cell phone. You may also not need all of those minutes that you’re using. This will save you a significant amount. This also means you need to do things such as not run excessive amounts of water in your home, turn off lights when you leave a room, and turn down the heat and the air conditioning since they result in high heating and cooling bills.
- When it comes to grocery shopping, it is not always necessary to buy the name brand. Sometimes the store brand is just as good, depending on what it is. For example, you may not need to buy the name brand pain killer because the store brand pain killer has the same quantity and the same exact ingredients. The main difference is the price, which usually around $2 or more less than the name brand.
- If you find that you are doing a lot of unnecessary spending, you need to see what is necessary and what isn’t. This means you need to stop buying all of those unnecessary things. You may not need to go out to the movies every week. Every other week may be fine. When you see that new outfit on the Internet, question whether or not you really need it. If you don’t, then you can move on and use the money for something that is necessary.
There are so many small things that you can do to make a difference in your budget. You would be amazed how much money you spend and shouldn’t spend. It is rather amazing, really. We all spend thousands of dollars per year that could be used to reduce other expenses such as credit cards, loans, mortgages, car payments, and so much more.
If you find that you are in a tough financial situation, you may want to try something such as debt counseling to help you with your budget. Credit counseling is another solution that you may wish to look into. If you have a lot of loans, then debt consolidation may be an option. Many individuals go the credit counseling route when they feel that there is nothing they can do to make their budget work.
Amy Nutt is a freelance writer who writes on a variety of financial topics including personal budgeting and debt consolidation. For more information about personal finance and credit counselling, ConsolidatedCredit.ca is a tremendous resource on the topic for Canadians.
Home Budget FAQ:
Question: Terrible credit. It just seems like one thing after the other. Any budget ideas to help me?
I am 25 years old and I am really feeling overwhelmed. When I was a teenager I was a little irresponsible. But since then I obtained a copy of my credit report and got on the track to paying back what I owe. I already paid off my school loan which in itself is a load off my back. I moved onto the next thing which was all my old cell phone bills. Now I’m looking at my credit report and I’m having a hard time moving on to the next. I have about $3000 left on my credit to pay off which I can do. But I just found out I owe my first college $10,000 from early withdrawal and library fees. How will I ever pay these things off? I can have the 3000 paid by the end of the year but the 10,000 is surely going to hinder me from buying a home. Any budget ideas?
Answer: $10,000 just from early withdrawal? That sounds pretty extreme. Contact them and ask for a breakdown of charges. The best way to do it is how you are. One thing at a time. That way, as you pay them off, they’ll come off one at a time. If you try and pay a little at a time to all at once, they’ll all remain on your report until the last payment. Keep your head up and you’ll be ok. You’ll manage. Also, get on some sort of payment plan with the school and that should prevent anymore charges being added to it.
Question: Home budget question?
I’m plugging in my expenses into Quicken to determine my incoming/outgoing balance. Do I input my VISA purchases AND my VISA payments as expenses in the same month? When I get a breakdown of outgoing money, it looks like I’m spending a huge amount of money on VISA. Am I doing this correct?
Answer: By entering both the Visa expenses and the Visa payment you are in effect entering the same amounts twice and therefore doubling what you have actually spent. The way you need to look at it is, you only spent the money once from your account, i.e. when you made the payment to your Visa. The charges on the Visa were on credit – using the bank’s money not yours.
A couple of suggestions would be to have a separate document for your Visa expenditure, itemising the expenses if necessary, and only entering the actual Visa payments on your original document.
Or, if you pay the Visa in total each month you could enter your Visa charges as per your statement, but not enter the payment as well. For this to calculate properly, your Visa expenditure and your Visa payment must be the exact amount.
Question: What’s a simple and efficient home budgeting software?
Answer: Quicken Personal is my favorite. It’s a check register, but it also does pie charts and graphs of where your money is going. I also believe it has a budgeting tool – just look at the package. I’m not a budgeter, I’m a saver; If I don’t save then I don’t spend. Ex: Easy to see in a pie chart if you are reaching your goals like saving 10%.
I would be lost without it. About 30 or 40 bucks at walmart – it might be by the printer cartridges.
There are fee sites on the net such as Mint.com. But you have to give the site your personal bank ID and your password. Plus sites like mint don’t have the check register that I need to keep track of my checkbook. They just show you the past and where your money went. Give it a try – but I would change your password at your bank after you try it.
Question: Need answers on how to budget my money?
My wife and I just had a our son 7 months ago and had to move back home. Now we have enough to move back out (I think) so I just wanted advice on how to budget my money for us to be able to afford an apartment or house.
Answer: Make a list of every bill you have- rent, utilities, phones, etc. Figure out about how much you spend on groceries and other absolute necessities per month (toilet paper=necessary, new sneakers=probably not). Then add all those numbers together and subtract that number from your total monthly income. Whatever you have left over is what you’re allowed to spend on non-necessities or put into savings. Since you have a kid you should probably build a 3-6 month savings cushion, so severely cut back or completely stop buying non-essential things until you have that safety net.
If your spending is greater than your income, figure out how to reduce it- cheaper apartment? Get rid of the cable TV? Pack your lunch? Find a better-paying job?
Money isn’t for spending- it’s a tool to help us live our lives. If you have $900 in your checking account, that’s not $900 that you can spend if you have a $700 rent payment due next week.
I find it helpful to mark payments on a calendar in red and write in when you get paid and how much in black. I also check my balance online often and have decided that I’m not allowed to spend any money if my checking account balance falls below a certain amount.
Question: When budgeting, how much should I subtract for taxes?
I am trying to make a budget for myself, but when referring to my monthly income, I only know what I make gross. Is there a way to estimate how much I should take from taxes to get a roundabout figure of what I bring home?
Answer: Roughly 30%. And if you’re only collecting gross income (i.e., no taxes withheld), then you must make “quarterly estimated payments” to the CRA. Which is a fancy way of saying “do your own withholding, and mail a check to CRA every three months”.
Question: Budget Baby Blues, How to make it work?
I have a 3 year old son, I am 22 will be 23 in June. Hubby and I are ready for a new addition to the Family. I am stay at home mom, and Hubby works at nights. Money is a little tight, but its always been that way, but we always made it through just fine. Hubby and I have been together for 7 years and married for 3. Any advice you can give to make this happen for me on a budget?
Answer: I know people who make plenty of money at 30 and over who are afraid to jump into starting a family. There is no perfect time to start (or continue) having babies. As long as you can provide a warm home and good food for everybody, go for it.
Question: Free home budget software with charts and graphics?
Please suggest some sites for Free home budget software with charts and graphics. I tried google search but all softwares were just with 30 days validity period or such.
Answer: I know this isn’t exactly a budgeting program, but there is a free checkbook/accounting application called GnuCash. It does come with a budgeting tool built in. You can graph/chart your income/expenses etc. I use GnuCash to track expenses, and compare that to a simple budget spreadsheet in Open Office.
Question: Looking for a very simple home budget planner?
Can anyone recommend a very simple easy to use home budget planner that I could download and use free of charge? Nothing fancy or to dramatic, just enough to keep track of monthly income and monthly expenses?
Answer: If you have office you can setup a monthly budget in excel using a spreadsheet.