TIPS TO SKINNY UP YOUR BUDGET

With an effective household budget in place saving money on the things you truly need can be easily accomplished. To start saving, take an inventory of your needs to see where you can shave the dollars. Begin with your most expensive items first…where the most potential for saving is. A moderate savings on one of the “big items” (cars, cell phones) combined with savings on some of the smaller items (food, clothes, etc.) can reap a large reward on your total budget. Below are some ideas to jump starting the process.

General Tips and Ideas…

Distinguish between your wants and needs. Remember needs are necessities: Shelter, food, clothing and transportation are the main categories. Wants are those items that enhance our everyday. If a car is a need, then a then a new Sport Utility Vehicle that costs you anywhere from $450-$700 per month is a want, even if many people don’t see it that way. This is not to suggest that you shouldn’t have the things that you want – just don’t misinterpret a want for a need. An expensive want can be a recipe for financial disaster.

Don’t buy unless you try it first. Trying to avoid the silly purchases of things you rarely or never use can be difficult. Try this…before you buy something, especially “big items”, borrow, rent or try one out before you fork over the cash. For example; most car dealerships will allow you to test drive a car for a few days to see if it’s the right purchase for you.

Can you really afford that? Are you trying to keep up with the Joneses? Don’t let your ego get ahead of your wallet. We often seem to insist on the idea “bigger is better”, no matter what the cost. When a $20,000 new car may have everything we need and will fit into our budget nicely, we opt for spending more. A GPS system already built into the car is nice…but can’t we find it much cheaper elsewhere? Think about where you’re spending money, and then think about where minor changes can put a few extra dollars in your pocket.

The Big Ones that Break the Bank

House/Mortgage/Rent. In most homes this is the largest single expense in your budget. Obviously getting the best deal here is of utmost importance. Not comparing could cost you thousands of dollars over the term of the loan or rental years. Refer to “Do You Realize How Much Rent You Really Pay?”.

Cars/Trucks/SUV’s. For many families the next largest expense is their vehicles(s). Mistakes made in this category can often be just as costly. Take a look at the vehicle(s) you currently own. Do you have too much vehicle for your needs? Could you downsize and save money in your monthly payments? Is public transportation a possible option for one or more family members?

And the all the Small Stuff that Add Up…

Insurance. Make sure to shop around for the best deal for you. There are many companies out there for a reason. Ask your employer if there are group rates available.

1.      Be sure to shop around

2.      Raise your deductible

3.      Take advantage of low mileage discounts

Food and Consumables. We need to eat food to live, however the expense for it can cost you a fortune. Since food is a necessity and a recurring expense, minor savings of just $20 a week on your purchases can convert to over $1000 in savings over the course of a year.

1.      Plan your list in advance – we always tend to pick up a few extra things that look good but don’t really need.

2.      Consider the store brands or generics.

3.      When it’s on sale stock up – this is only good if it’s an item usually on your shopping list.

4.      Shop at the store that’s the cheapest overall…there are many higher end grocery stores that can cost you $10-$20 more each shopping trip.

Clothing. The more fashionable the designer the larger the price tag. It doesn’t help that the cost of clothing has been a continuous upward spiral. With some planning it’s possible to maintain a clothing budget in line with an ever growing family.

1.      Buy separates that coordinate. It’s easy to mix and match to create many different outfits. You can also change the look with accessories.

2.      Buy a season ahead when they’re on sale. No need to buy as soon as the style comes out. Clothing styles don’t change that much. If anything the accessories change more often and can update any look.

3.      If your family is “hard” on clothes, buy quality. You can spend just a bit more on shoes to last a little longer. It’s cheaper in the long run to buy the $80 shoes than having to buy 2 pairs of the $45-$50 shoes. With kids…try a ½ size bigger than they would normally wear.

Cell Phones. Does each person really need their own plan, or can you take advantage of the family plans? This alone can save you hundreds every month!

Traveling in the future? With the cost of air travel constantly on the rise…can you buy your tickets or vacation package a year ahead? Price around on the websites, many have great deals for the off seasons.