All Year Fast and Easy Ways to Save Funds

accountant-1238598_640As we approach the second quarter of the year, let’s try to shy away from the mistakes done and start a clean slate by focusing on what can be done now to improve the financial situation. For most us, a better quality of life translates to more money. Here are few tried and tested tips to share with you:

Create a Budget

Budget can become overwhelming, but if you make a monthly budget and stick to it, you can identify areas where you overspend and save big by controlling spending or simply by using money wisely. Write down monthly income (after taxes) and itemize monthly bills and other expenses. Don’t forget about the “little” things like daily coffee or fast food lunch – they add up.

“Spring Clean” Your Finances

You can dedicate an hour over the weekend to review all your current bills, or, you can thoroughly review bills as you receive them, keeping an eye out for hidden fees and services you don’t need or want. If you find questionable charges, investigate them.

Maximize the Value of Coupons

Learn about the potential savings associated with extreme couponing. Pick up a Sunday paper, browse through all the ads to find coupons on items you regularly buy. But don’t stop there. Keep an eye out for store sales on items you buy the most, and incorporate your coupons to increase the savings.

Reduce Entertainment Expenses

Entertainment is a necessary expense. However, it’s also necessary to avoid overspending in this area, especially because it’s easy to get carried away. Check one of the many daily deal websites and see if you can find discounts on places that you visit or would like to. You can often save 50 percent on dining and local activities simply by planning ahead and printing a voucher.

Commit to Fresh Foods

Buying processed foods is more convenient, but buying fresh will save you money and improve your health. You may need to spend more time in the kitchen, but if you make meals in bulk and freeze for later use, you can enjoy the health benefits and savings of eating fresh without “slaving over the stove” everyday. Visit your local farmers markets and make it a point to visit them weekly. You’ll find the highest quality of fruits and veggies at low prices.

Once you’ve identified and implemented ways to save daily, direct those savings towards paying off debt so you can reduce interest charges and improve your credit. And if you haven’t yet started saving for retirement, now is the time.

When it comes to your finances, a few dollars a day can make all the difference in reducing debt, saving for the future, and improving your overall quality of life. Everyone has the power to change, and saving 50 cents at the grocery store could be your first step to a life of financial freedom.

Read More

Basic Budgeting

Budgeting is simply the act of working out how much money you’ve got coming in (EARNINGS) and then as accurately as possible figuring out how much you have to pay out (EXPENSES) on fixed costs such as rent, bills and so on to then come up with how much you’ve got left to spend on everything else (DISPOSABLE FUNDS/INCOME).

In simple math terms basic budgeting looks like this:

INCOME  +  FIXED COSTS  = DISPOSABLE INCOME

Budgets can be calculated over a variety of time periods, such as a month, term or even a whole year. Most students have very fixed incomes made up from their Maintenance Loan or Grant, plus whatever they may get in the way of parental support or from a part-time job, so calculating income is usually pretty easy.

The trick comes when trying to figure out your expenses, breaking it down into the fixed costs that are known (for example rent is a ‘known fixed cost’), those fixed costs that are estimated (such as utility bills which can be guessed at based on how much was paid in the previous year) and then essential costs but based on educated guesswork. How much you are going to spend on food per month would be an example of an essential cost.

It’s also important to be strict with yourself about what are and what are not ‘essential’ costs. Whatever is left over after covering your essential costs what you are going to have left to pay for everything else.

Everyone is different, the important thing is to take full stock of your personal income and expenditure – being as honest as possible – and seeing if it leaves you with any money left over. If it does then it’s a case of making that remaining disposable income last (i.e. not overspending). However if after drawing up your budget you have more money going out than you have coming in then you only have two responsible alternatives: You can –

  1. Increase your income.
  2. Reduce your expenditure.

It can be difficult to track the small daily expenses (such as cups of coffee, sandwiches, car parking and so on) so here are a couple of tips to help.

1) Pay cash: Debit cards are very easy to use for even small purchases nowadays and you can spend money on them without ever really noticing the total impact on your bank balance. So take out a fixed lump sum of cash each week and commit to only using that cash for your ‘impulse’ spends on a day to day basis. You’ll realize how quickly you’re burning through your disposable income!

2) Cut back: Why pay for coffee when you’ve got a thermos flask or for sandwiches from a shop when you can take in a packed lunch? The simplest way to manage impulse spending is to stop it altogether or reduce it to an absolute minimum. Changing habits can be challenging but the savings can be rewarding.

Read More

Do Your Budget Plan to Resolve Debt Issues

Doing your budget planner accurately should not take too long. It would be easier if you gather all your bank and credit statements from the last 3-months. List all standing orders, direct debits and give you an accurate idea of what you spend.

For your grocery, gather all your receipts from the last 3-months, add up all food spending listed then divide by three to reach average monthly spend.

It’s always surprising to see quite how many things you spend on. Worse still is how much you spend on them. Yet there are always ways to save. It’s worth considering if you’re getting the best value for money, and can you cut costs?

Gather also your pay-slips to establish the exact amount you earn. Once you have the exact picture of your income expenditure, hopefully, you have triggered the end of which tells you the truth of your finances.

Providing you’ve been honest with yourself, it’s time to relax a bit – but it should not stop there. You need to work on reducing, adjust spending habits and create a reasonable spending pattern. Paying less for things means you have more money in your pocket to enjoy life more (and possibly save some for the future too!).

Spending more than what you earn may not immediately give you a negative impact, but it is a disaster waiting to explode! Worst is, you will end up borrowing more! You may feel that this is over-reacting but, when you are caught in spiraling debt – it touches every element of your life. Many people mistakes themselves about this, common thought is, “that doesn’t happen to nice families like us”. Well, I’m afraid even if you’re middle class, you’re not insulated from debt. In fact you’re in the prime category for debt crisis. It’s crucial to take the blinkers off. Far too many people in work with good salaries have bigger debts. If your non-mortgage debts exceed half your after-tax salary, it’s a real issue.

ASSESS YOUR SPENDING!

> Pain-free spending – Spending cut-back ensuring you live the same way but pay less. Don’t just look on the things like, credit cards, bill/mortgages. You can also save on childcare, taxes, etc.

> Re-budgeting adding the expected savings – Check your budget planner and incorporate expected expenditure based on expected pain-free savings.

> Cut-back on painful savings – You need to spend less, do less and sell things until you are living within your means. You need to start slowly to reduce on your spending, run through what you need. And if you have assets but are income burden, then consider flogging things you don’t really use, this will definitely help you afloat.

Working on one’s finances is quite tedious and tiresome. BUT, it is a must! At the end of the day, once you are good with your finances, life should be appreciated and enjoyed!

Happy budgeting!

 

Read More

6 Helpful Budgeting Habits

From my previous blogs, you have been reading various ways on how to save and get out of your financial woes. Once you follow and focus on those tips, it is important to make sure you turn them into habits so that you are assured of better finance handling.

Here are some tips on money mistakes to avoid:

  1. Splurging more than what you actually earn – The root of most financial problems is the inability to control spending. No matter your income level, if you spend more than you earn you will be broke and in debt. Whether you earn big or not, always bear in mind to be frugal about spending. Spend LESS than what you earn!
  2. Review your annual finances – Having money mistakes is “fine” for a certain period of time, if you are not aware of it. Real issues start when the mistakes are not properly address over the years. Taking time out to review your annual finances could help you ward off any problems that may affect your financial stability. They say ignorance is bliss, but it can cost you dearly!
  3. Paying extra for convenience – It may be a breeze to justify spending your funds when it is at your convenience and disposal. Good example is, you don’t plan out your budget for meals; hence, you tend to eat out, at your convenience! Anywhere you go is convenience, even up to your bottled water and coffee on-the-go. Paying for convenience is fine, but do it all the time and in excess and you will always wonder why you never got ahead financially.
  4. Warding-off tough decisions – “Life is unfair” at times. Sometimes your finances go down or just disappear suddenly. In times like this, you can try to finance the gap between what you make and what you spend, start cutting items from the budget. Bottom-line is, you have the basic necessities in life: food, water, shelter, clothing, education, excellent health, and a way to generate income to live by, then you will be fine!
  5. Spending on impulse – Huge mistakes to many people is buying on impulse. You see something that you really fancy and dreaming of having it for yourself could ruin your good judgement on your budget. Then, a few days later, you regret buying it since it is not really needed, such a waste of money! Before making a purchase, sleep on it.
  6. Paying bills without scrutinizing details – You might think it is but normal paying bills without checking the details of your bill. Every bill you receive has a summary of the charges and then a breakdown showing what you were charged. It is easy for companies to have data entry “mistakes” that throw an extra charge in on your account. If you don’t review the bill it can easily slip past you. Be sure to check the actual statement to make sure you were charged the right amount.

 

 

 

Read More

Managing a Low Income Budget

If you are on a low-income budget, you should have a family or household budget. Living on a specific budget may seem to be a bit constricting, but it will definitely work. Having a workable family budget is actually quite liberating and simple. It makes you in charge of your money, than allowing money to control your life.

Monitor Your Expenses – Before you can create a workable household budget you have to know where your money is going. Every member of the family should get a receipt for everything being purchased. Use these receipts to get a clear picture of how and where you spend funds. Create a personal finance tracker can help you monitor your expenditures; you might find some obvious expenses you can cut right away.

Write a Monthly Budget – Implement a workable budget is an important thing in a low-income family, to get control of the funds. Getting a consensus from every member of the family will help in leaving out budget items. Every member of the family is affected by the total family budget, so it should be a family “affair”. Having extra sets of eyes on your budget always helps if everyone has a say in creating the budget, they are more likely to buy into maintaining the budget.

Sufficient Budgeting – Making your household budget work is ensuring it is sufficient for your needs. Be sure to set an amount for each expense, i.e. food, bills, transport/gasoline, loans, etc… This is the time in the budgeting process where you may need to make some tough decisions, particularly if your income isn’t sufficient to meet all of your needs, much less your wants.

Work On Some Adjustments – If your budget exceeds your income, it is important to make some adjustments. You only have two options: cut your expenses or increase your income. Increasing your income might not be an option and cutting your expenses could take some time. You may need to find a cheaper home or apartment but breaking your lease is expensive, so you might be better off moving after your lease is up. You might need to sell your high – gasoline consumption car and buy a more fuel-efficient car.

Emergency Fund – Common wisdom says you need three to six months’ worth of living expenses saved up for a rainy day. When you live on a low income, every day is a rainy day, so saving that kind of money might seem unrealistic. But unexpected expenses come up in everyone’s lives — regardless of income level — and having a few hundred dollars in an emergency fund can meet those needs without wrecking your budget and forcing you into difficult choices. Noel suggests making your emergency fund a top priority, right after creating your budget.

Read More