Women's Guide to Financial Self-Defense by June Mays

Author:June Mays [MAYS, JUNE]
Language: eng
Format: epub
Tags: BUS050000
ISBN: 9780759524989
Publisher: Grand Central Publishing
Published: 2001-06-15T00:00:00+00:00

How to Budget and How to Save

Several references have been made to keeping track of past and present family expenditures. It can seem so overwhelming that the temptation is great to guess at expenses, which can be dangerous. Here’s how to start budgeting.

The computer method makes it easy in the long run. Visit your software dealer and see what he or she has to offer. Ask your computer-oriented friends what financial software they use. If you are recording by hand, ledger paper or a spiral notebook will suffice.

Collect the last six months of canceled checks, receipts, and credit card statements. If you don’t keep these, start today and collect the next six months’ worth. You will need your husband’s help with his out-of-pocket expenses. Categorize your expenses: Charitable Gifts, Savings, Food, Eating Out (includes takeout and pizza delivery), Utilities and Cable, Household Maintenance (includes cleaning and yard services), Home Improvement and Repair, Clothing and Personal Care, Rent/Mortgage, Hobbies, Savings, Vacations, Recreation, Business Expense, Education, Children’s Allowance, Debt Repayment, Books and Magazines, Gifts, Automobile and Maintenance, Medical and Dental, Hobbies, and any other categories appropriate to you.

Figure your totals and percentages. You will be surprised at what you are spending in some of the categories. If you are trying to save money, decide how much and where you might trim. Then decide how you’ll trim. Just saying “We’ll eat out less” will not be helpful. Write down specifically what you and other family members will do to eat out less.

For the next three months post your expenses to categories. This will be easy since you already have everything set up. Since you are recording you may find yourself being more careful. Total your expenses and figure the percentages. How are you doing?

Setting aside a fixed amount of savings each pay period is one of the best ways to start or increase your saving. Other ways include the following:

Contribute as much as you can to your 401(k) and other payroll deduction savings plans. What you don’t see, you don’t spend.

Contribute the maximum to your IRA even if you don’t get a current deduction.

Give appreciated stocks in lieu of cash for your charitable gifts and put the difference in your out-of-pocket expense into savings.

Pay off your highest-interest consumer loans before you try to start saving. The payments you are accustomed to making can then become payments into your savings.

Encourage your teenage and college-age children to cover some of their expenses by having part-time jobs. For instance, some teenagers pay for their own car insurance and gasoline.

Be a thrifty shopper; think before you buy; don’t spend money you don’t have.

Cut back on expenses like personal care that can get out of hand easily. How much better is a $100 haircut than a $50 trim?

Cut back on high-maintenance items like boats and vacation homes.

Move to more affordable housing.

Car pool.

If you are not working, take a part-time job and save your paychecks.

Use the public library.

Use only one credit card.

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