Category Archive: Top 10

Top 10 Ways To Save Money – Number 2 – Live On A Budget

Let’s take ten minutes and create your new budget for December.

Write down your expected monthly income.  (Use your take-home pay.)

Write down your expected monthly expenses.

Include everything – gasoline, groceries, rent, mortgage, insurance, food, clothing, gifts, miscellaneous, cell phones, credit card payments, etc.  Need help?  Look over your bank statements from the past couple of months.  These should help you compile a pretty accurate list.

Subtract expenses from income.  Did you get a positive number?  Good!  This is the amount that you can budget for extra savings or extra debt reduction payments.  Did you get a negative number?  Not so good!  This is the amount that you need to earn (in the form of more income) or reduce (in the form of cutting expenses)

Creating a budget takes about ten minutes.  Learning to live on a budget takes a little longer.  If you are struggling, now is the time to sit down and take stock of your financial situation.  When I created my first budget, I immediately realized two things –

I was spending a lot of money on things I did not need AND I was making enough money, if I managed it wisely, to begin to reduce my debts.

I have written several articles about creating a budget, including –

Creating A Budget If You Have Irregular Income (Do you live on commission?  This budget is for you!)

I Pay Myself First, Last, And All Along The Way (Here’s how budgeting helps me save month, at the beginning, end, and middle of each month.)

Annual Expenses – (Here’s how to handle annual expenses, things like life insurance premiums or car tags.)

After you get into the swing of things, living on a budget becomes second nature.  For 2009, I plan to create one budget, have it set up by January 1st, and use it for an entire year.  I can do this because I have worked hard to fine tune my budget for almost four years.  Starting out, you will want to focus on one or two months at a time.

Personally, I use the You Need A Budget software to manage my finances.  I’ve been using it for more than two years, and I highly recommend it.

Remember, you can write down all of the numbers you want, but you must FOLLOW THROUGH WITH YOUR PLAN.  You budget has to mean something.  You can’t just write down a bunch of numbers and then ignore them.  Treat your budget with respect, and stick to it, and you will save money.

Click here to read the Top 10 Ways To Save Money.

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Top 10 Ways To Save Money – Number 3 – Avoid Paying Credit Card Interest

On February 6, 2006, I made the final debt reduction payment and finished paying off all of my debt.  Since then, I’ve been living debt free.

I do not make monthly payments to creditors.

I do not pay interest to credit card companies.

I am free to do what I want to do, when I want to do it, with my money.  Life is good.

I loathe the thought of paying interest.  I spent 15 years of my life paying interest – on cars, trucks, furniture, appliances, clothes, food, and dozens of other silly things.  Now, however, if I don’t have the money to pay for an item, well, I just don’t buy that item.  I have to wait until I can actually afford it and then I buy it, with cash.

(This is a novel concept, I realize, and one that has been soundly rejected by both our federal government and both major political parties, but I digress.)

Do you want to save some real money?  Then, get out of debt (especially credit card debt), learn to live debt free (with a long-term plan for remaining debt free), and stop borrowing money (and paying interest).

Now, there are those who will reject my idea of paying cash and they will extol the virtues of credit cards, with low interest rates, and the power of using other people’s money.  Hey, I’m cool.  If others want to borrow money, that’s fine by me, but I don’t want to use other people’s money, I want to use my own.  And yes, I am aware of the thirty-day float afforded to those who use credit cards… and the five percent back that you can get with each transaction… and the security features.  I still don’t like them, I don’t want to use them, and I’m convinced that most people spend more when using a credit card than they would if they had to live on a cash only budget (with no wiggle-room for going over).  I am very open to the idea that I am wrong, and I know that many of my personal finance blogging brothers and sisters love their credit cards, but I’m just not going to use them.  (Not to belabor the point, but let me say this.  With credit cards, I was in debt, I was paying interest, I lived month-to-month, and I was fiscally irresponsible.  Without them, I’m debt free, I’m funding 5 retirement accounts, 3 education savings accounts, and I have six months’ worth of expenses saved in the bank.  I think I’ll stick with what’s working for me.)

If, however, you must use a credit card, please, pay if off in full at the end of each month.  Credit card interest rates can be very high and credit card companies are constantly looking for ways to improve their bottom lines.  Be careful.  Make your payments on time, always open notice letters from your creditors, and keep tabs on your interest rates.  Credit card companies are constantly changing their policies and procedures!

If you click any of the links in this article, you will be directed to other articles about how I got out of debt and how I live debt free.

Click here to view all of the articles in the Top 10 Ways To Save Money series.  Rock on.

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Top 10 Ways To Save Money – Number 4 – Shop Smart

Number 4 – Shop Smart

If you want to save money – and prevent those end-of-the-month how-are-we-gonna-make-it-worries – learn how to shop smart.  Times are tough and money is scarce.  Now is the time to become a conscious consumer.

  1. Use lists.  When you go to the grocery store, make a list.  When you prepare for Christmas shopping, make a list.  When you are getting ready to go on vacation, make a list.  Take out a sheet of paper, write what you plan to buy, and when you go shopping, follow the list.
  2. Use coupons.  I use coupons at the grocery store – but only for items that I would have bought had I not had any coupons.  Be careful when using coupons, or you will end up buying stuff that you don’t need, just because you have coupons.  Also, be on the lookout for coupons that you can use at restaurants, gas stations, dry cleaners, etc.  If you don’t want to buy the Sunday paper, search eBay.  There you can find coupons for all sorts of items.
  3. Use a grocery store price book. If you really want to save money on groceries, you’ll want to stock up on items when they go on sale.  To do that, you’ll want to know rock bottom prices.  Click here to check out my free, printable grocery price book, which will help you track the prices of your favorite grocery store items.
  4. Use the internet.  This might sound like a no-brainer, but I know people who spend hours online, and then, when they want to buy something, just head to the nearest Wal-Mart, Target, Best Buy, or Sears.  Instead, they should first research – products and prices – using the web.  There are literally hundreds of sites which will help you compare prices, evaluate products, and find deals.  Here are my three favorite sites –
    1. Fatwallet – Has lists of great deals, coupons for online purchases, and awesome forums.
    2. SalesCircular – See what’s on sale, in stores, at major retailers.
    3. Pricewatch – For those who love technology – and saving a few bucks.
  5. Use common sense.  Never make a major purchase without doing some research.  Never buy something that’s not in your budget.  Never buy something that you can’t be proud of owning.  I use the $100-A-Day-Rule, which helps to prevent impulse buying.  Never shop for food on an empty stomach.  Never shop for a new car while your old one is being repaired.  Never buy something just because your neighbor has one.  Choose to be the smartest consumer in your neighborhood.
  6. Use cash.  This one might be a little counter-intuitive, but hear me out.  If you were to plan to use cash – and cash only – for the next six months, and promise not to allow yourself a credit card safety net, could you do it?  If the answer is no, then you have a problem.  I’m not saying that living the No Credit Needed life is for everyone, but I am saying that anyone who has his/her financial house in order should be able to live on cash – and cash only – if they chose to.  Many people say that they spend more when they use cash, but that’s only because they allow themselves a credit card safety net.  If you knew, without a shadow of a doubt, that when your cash ran out, that that was it, I’ll be you could learn, very quickly, to be responsible with cash.  (By cash, I mean paper money, checks, or debit cards.  In other words, funds you already have.)

Being a better, smarter shopper will help you keep more of your paycheck.  As times get tough, the days of frivolous spending are over.  It’s time for all of us to buckle down, use our brains, and make smart buying decisions.

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Top 10 Ways To Save Money – Number 5 – Follow Through

Number 5 – Follow Through

Okay.  You’ve finally decided to get your financial house in order.  You’ve worked through the numbers and sorted out your bills.  You’ve filled out your budget – (My favorite? You Need A Budget) – and you and your spouse on the same page.  There’s just one more thing you need to do — Follow Through.

How many times have you said that you were going to focus on debt reduction, only to put it off for “one more month”?

How many times have you “thought” about creating a will or buying more life insurance?

How many times have you “really meant to” fund a Roth IRA?

How many times have you talked about saving for kids’ college, or a newer car, or new appliances?

Don’t just think about making a change – Make a change!

It doesn’t matter how many times you rework your spreadsheets or retool your debt reduction plan.  If you don’t implement your plan, the plan becomes useless.  So, turn of the TV, grab that stack of bills, get started – and keep going!

You rock!

This post was written twenty minutes after Interval Training Thursday – if it reads a little coach-like, that’s why!  :)

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