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 2 – Live On A Budget

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 3 – Avoid Paying Credit Card Interest

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 4 – Shop Smart

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

Number 6 – Work Together

A good friend of mine owns a two-person pedal boat.  The last time I got in the boat, my nine year daughter and two of her friends hopped in the boat with me.  As you can imagine, I did most of the pedaling.  By the time we circled my friend’s pond and arrived back at the dock, I was exhausted.

It can be tough trying to go it alone, feeling like you are the only one working to get out of debt and save money.  If you want to succeed, you have to develop a plan which allows you and your family members to work together.

Talk With Your Spouse

Let’s face it.  If you are reading this blog post, then you are, more than likely, the person in the household who handles most of the financial paperwork – paying bills, filing taxes, balancing checkbooks.  As such, you probably feel overwhelmed, from time to time, with all of the responsibility you have.  If so, take a few minutes, maybe over a quiet dinner, to talk with your spouse.  Don’t argue, don’t condemn, don’t blame, just talk.

I’ve actually written a couple of posts about this subject -

How I Avoid Arguing With My Spouse About Money and

Is It Really Possible To Talk To Yur Spouse About Finances Without Getting Into An Argument

Talk With Your Kids

I have three kids, ages 9, 4, and 6 months.  Obviously, I have a different conversation with the 9 year old than I do with the 4 year old, but they both know that we “honor every dollar” that comes into our house.  If you are heavily in debt, and worried, some of that worry is bound to rub off on your kids.  Be reasonable.  Don’t put more on you child than he or she can bare.  At the same time, be as honest as you can and let them know that you – and the whole family – are working hard to save money.  As kids get older, let them in on, little by little, to the realities of family finances.

Here’s a post I wrote a few months ago -

5 Ways To Teach Young Children About Money

Become A Team

As corny as it sounds, when my two older kids get in an argument, I take both of them by the hand, and walk them to a quite place in the house.  Kneeling down, to their eye level, I remind them that we are a team, and that we have to work together.  The same holds true when it comes to managing family finances.  The entire family has to be moving, together, in the same direction, like minded and determined.  As an adult, you can cultivate a good attitude if you celebrate victories, those big and small.  If your daughter receives a twenty dollar bill at Christmas, teach her how to save a portion, give a portion, and spend a portion.  Let her have some freedom, but also teach her some responsibility.

Find Your Role

Do what you do best and let your spouse do what he / she does best.  Support one another.  I like graphs, charts, spread sheets, and calculations.  So, in our family, I do most of the paperwork.  My wife, she’s more of a people person, so she handles a lot of the human interactions – calling doctors, insurance companies, etc.  This works for us.

Here’s a more in depth look at the subject of family roles

How Free Spirits And Money Nerds Can Help Each Other Out

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Top 10 Ways To Save Money – Number 6 – Work Together

Number 7 – Get Fit

About two years ago, I began a search for new term life insurance policies – one for myself and one for my wife.  When the quotes started rolling in, I noticed something.  Her premiums were lower – much lower – than mine.  At first, I thought this might be because she’s a woman and I’m a man.  I called an agent and asked why there was such a discrepancy, and he told me that it had much more to do with the fact that I was overweight, than it did with my wife being a woman.  As a test, I ran a few more quotes, using my ideal weight, instead of my actual, and I was shocked.  The premiums were reduced by more than 50%!  Moral of the story?  It pays to get fit.

Lower Insurance Costs

If you plan to purchase life insurance, disability insurance, or heath insurance, and you are not covered by a group policy from your employer, more than likely, the more in shape you are, the lower you premiums will be.

Lower Gasoline Costs

Back in July, Lazy Man wrote a very interesting post about saving money while driving – and he included a quick tip about how losing weight increases gas mileage.  I’d never really thought about this, but after doing a bit of research, it looks like reducing the weight in an automobile by 100 pounds will reduce fuel costs by 2%.  As some of you know, I also blog about weight loss, over at No. Calories Needed, and my ultimate goal is to lose (about) 80 pounds.

Lower Health Care Costs

When I write “get fit” – I usually mean “lose weight”.  The truth is, obviously, that getting fit is about much more than simply losing weight.  Here are two big time health issues that cost billions each year -

Smoking - If the fact that it causes cancer doesn’t deter you, perhaps the fact that it’s a very expensive habit will?  At $3 a pack, per day, your habit costs you more than $1000 per year.

Type 2 Diabetes – From WebMD: Anyone can get type 2 diabetes. However, those at highest risk for the disease are those who are obese or overweight… My grandmother had diabetes.  She had to learn to give herself shots, she was constantly checking her “sugar”, and she dealt with terrible pain in her joints and limbs.  Diabetes is a debilitating, expensive disease.

Lower Clothing Costs

This one might be stretching it – (get it? stretching it) – but, as a big dude, I pay more for clothes than a skinny dude does.  Well, I did, until last week when I moved down from 2X to XL shirts.  That’s write, after losing more than 8 pounds, I bought a new shirt in the regular sizes department.  Larger sizes, of the same style garment, cost more (at certain retailers).  Losing weight not only reduces the cost of new clothes, it also makes those “one day I’m going to get back into these” clothes in the closet into “wow, these fit” clothes.

I’m sure that there are other benefits that I’m forgetting.  Can you think of some more ways that losing weight helps us save money?

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Top 10 Ways To Save Money – Number 7 – Get Fit

Number 8 – Buy Fresh Produce

When you purchase a item from the grocery store, you’re paying for more than the item itself.  You’re paying for the cost to advertise, package, ship, store, and sell the item.  If you want to save money, consider skipping the traditional grocery store – and look for inexpensive shopping alternatives.

Start A Garden

If you have the space, grow your own food.  I’m going to do this next year, especially now that I’m eating only lean meats, fresh vegetables, and fruits.  (JD and Kris from over at Get Rich Slowly have been tracking their time in the garden this year.  There results have been very interesting.)

Depending on your level of green thumb-ed-ness, having your own garden can be a great way to save money – and it might give you a brand new, profitable, hobby.  If you have room in your freezer or pantry, learn how to freeze or can foods, for those long winter months.

Find A Farmers Market

Not interested in growing your own, but you’d still like to save some money and enjoy fresh food?  Consider a farmers market.  If you’ve never been to a farmers market, you need to go!  You’ll be amazed by how much better (in my opinion) the vegetables taste than the ones you find at the grocery store!

Here are some online tools to help you find a farmers market in your area -

USDA Farmers Market Search

The National Directory of Farmers Markets

If you can’t find a market using one of these online resources, don’t give up!  Just ask around – I’m sure that there is a “hidden gem” in your area, just waiting to be discovered.

Parenthetically, since we live in the rural south, it’s easy to find fresh fruits and vegetables, especially during summer and early fall.  Nearly every little town has a roadside booth, where one can buy fresh peaches, watermelons, squashes, turnips, and onions.  Last month, I bought a big, beautiful bag of peaches for $3.00!

Coordinate With Friends

I don’t know if this is a southern thing, or a rural thing, or both – but, where I live, people love to share goodies from their gardens with each other.  Last year, a friend brought us a “mess” of corn, several quart bags of green peas, and several 5-gallon buckets of potatoes.  If you’ve got friend with a garden, you’ve got a great friend!

Taking things a bit further, if you have a friend who is into gardening, it would be a great idea to work with them, coordinating the foods you grow.  For instance, maybe your friend really likes to grow potatoes, but isn’t interested in planting corn.  Well, you plant the corn, the friend plants the potatoes, and when harvest time comes, you share.

Growing up, my dad and our next door neighbor, Mr. Terry, used to do this.  I remember one warm day when I helped Mr. Terry pick strawberries.  As he picked them, I was supposed to put them in a bucket.  Instead, I just ate them, standing right there in the garden.  When he stood and turned around, and asked for the strawberries, all he got was an empty bucket.

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Top 10 Ways To Save Money – Number 8 – Buy Fresh Produce

Number 9 – Give Up Hobbies

I love to play golf.  If I had the time, and the money, I would play everyday.  But, while getting out of debt, I quit playing golf.  For a year, my clubs sat in a closet, gathering dust.  Sure, my game suffered, but I had to stop playing, and stop spending money, and focus on debt reduction.

Take a look at your life.  Do you have some expense – some unnecessary expense – that is eating away at your financial progress?  If so, get rid of it.

After getting out of debt, I started playing again.  I play two or three times a month, and it feels great to be back on the course.  You can always go back to your hobby – just wait until AFTER you get out of debt and have a increased your emergency savings.

In almost every case, when I take a look at some one’s budget, I can find at least one category that should be reduced – entertainment.  People love their books, DVDs, movies, bowling, golf outings, collecting, hunting, etc.  And, almost as universal, when I suggest decreasing that particular budget category, people will resist.  Why?

It’s natural to feel entitled, especially after a long week of working hard, to reward ourselves.  I had to learn to say NO – to myself, and to my buddies when they asked me to play.  By the way, never underestimate the role that peer / social pressure plays in determining how we spend our money.  It’s amazing how quickly some people can be convinced, by their friends, to make certain purchases or do certain things.  Make up your mind, make the sacrifice now, and in the near future, you can really enjoy your hobby, when you can actually afford it.

If you enjoy the site, and you want to keep up with the Top 10, please consider subscribing to No Credit Needed.  You can subscribe via RSS or via Daily Email.  You’ll always receive the very freshest content, delivered directly to your reader or inbox.  Rock on!

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Top 10 Ways To Save Money – Number 9 – Give Up Hobbies

I like top 10 lists.  There easy to read, easy to write, and they always seem to create a good deal of discussion.  This week, I’m writing my own top 10 list – Top 10 Ways To Save Money.  Expect two or three posts a day, as I want to have the entire list published by the end of the week.

Number 10 – Cook And Eat At Home

Like most families, we live our lives on-the-go.  With work, church, school, kids’ events, and family gatherings to attend and prepare for, life can get hectic.  But, even though we are very busy, we still take the time to prepare food at home.  Why?  It saves us money.

Let’s look at a typical trip to a “sit down” chain restaurant.  For a family of four, two adults and two kids, the average bill will be, what? $35 – $70?  Now, multiply that amount over 3 or 4 or even 6 times a week.  Pretty large number, right?

Now, imagine if both mom and dad eat out for lunch, each day.  What’s that?  $10 per person, per day, five days a week?  Mom and dad are spending $100 a week, just for lunch.  That’s $400 – $500 a month.

Instead of buying lunch, prepare a lunch at home.  Instead of going out to eat, start eating at home.  I can promise you that two things will happen -

1.  You’ll spend more time with your family, sitting around the supper table, actually talking.

2.  You’ll spend less – much less – on food.  Sure, your grocery bill might go up, just a bit – more on that later – but your eating out bill will shrink, dramatically.

If you don’t want to give up eating out entirely, make it a treat.  Instead of eating our 5 times a week, eat out once, maybe on mommy-daddy date night?  Or, take the kids for a special lunch after church.  When you do, splurge a little bit – if your wallet and waist line can handle it.  Remember, we want to sacrifice when appropriate, but we also want to enjoy our lives.

About those higher-than-usual grocery bills – I mentioned a resource a few days ago, my free printable grocery store price book – and I really think it will help reduce your grocery costs, if you’ll use it.  Print one out and give it a try.  See what you think.

By the way, my friend JD from over at Get Rich Slowly recently wrote a very interesting post about grocery shopping – and only doing so once a month!  This is an idea that I find very intriguing.  And, MBHunter has some excellent tips for brown-bagging it.

If you enjoy the site, and you want to keep up with the Top 10, please consider subscribing to No Credit Needed.  You can subscribe via RSS or via Daily Email.  You’ll always receive the very freshest content, delivered directly to your reader or inbox.  Rock on!

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Top 10 Ways To Save Money – Number 10 – Cook And Eat At Home