Jan 21

Making a Budget You Can Live With

Tried and True Thursdays 2 Comments »


Whether your bottom line has been hurt by the economy or not, chances are your financial future has been on your mind. Many people have made it a priority to get their personal finances back on track.

Today’s post about creating a family budget is the first in a series of several posts about making 2010 a great financial year for your family.

Experts recommend using the 70-20-10 rule to have a successful roadmap for spending. Here’s how they break down your monthly paycheck:

• Living expenses should consume 70 percent of your budget. This includes housing, food, utilities and transportation.

• Twenty percent should split three ways, with the first 10 percent going towards retirement. (See next week’s post for more information on planning for retirement.) The last 10 percent should be split in half, with 5 percent set aside for building up your emergency fund (which ideally covers your living expenses for three to six months) and the other 5 percent going towards a specific savings goal (like buying a new car or saving up for a down payment on a house.

• The final 10 percent of your budget should be allocated towards debt repayment. You begin by paying down the highest interest debts first. Once those debts are paid you add the additional money to lower interest debts and pay those off faster. If you’re lucky enough to not have debt, then you can use that final 10 percent to invest in interest bearing savings accounts, CDs, IRAs, etc. You should consult an accountant or financial advisor to make sure you’re choosing what is best for your financial situation.

Other tips for saving:

1. Keep time on your side. It can be fatal to rip open your 401K statement these days, but things are on the upswing and most people still have plenty of years before retirement to recover their losses.

2. Don’t touch your long-term savings to fix a short-term cash flow problem. It can be tempting to dive into your nest egg to put a band-aid on your current problem. Always try to find another solution first.

3. Budget in some fun. It’s unrealistic to think you’ll never go on another vacation or eat another meal out again. Budget in some fun extras and then you can enjoy them when you pull out your wallet to pay that night out on the town instead of feeling guilty.

4. Consult a pro. Sometimes you have to spend a little to save a lot. Call a professional financial planner and get their opinion about your strategy and goals. They may be able to offer you advice that could save you tons of money.

Question: What was the last thing you bought for yourself?

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Jan 12

5 Tips to Spend Less and Still Eat Like a King

Tidy Up Tuesdays No Comments »

Thanks to the down economy, couponing is cool again. But if you’re not a fan of coupons, how else can you slim down your grocery store spending and keep some extra cash in your pocket?

If holding on to more of your paycheck is on your list of resolutions for 2010 but you don’t want to spend hours clipping and organizing coupons, then here are five tips to help you trim the fat in your food budget. I’ll display 5 new tips each Tuesday for the rest of the month.

1. Create a reasonable budget and then stick to it. What’s reasonable? Keep all of your receipts for a month to know how much you really spend on food (including trips to fast food and other restaurants). Start with that as your budget and then find ways to beat your own budget.

2. Create a meal plan for the week. I only plan meals for Monday through Friday and it always seems to work out well that we are more relaxed on the weekends. We’ll grab leftovers or a treat ourselves to a pizza if the fridge is depleted. Sometimes we’ll just figure out what to make with what we have left over. It’s a good way to make sure nothing gets wasted.

3. Keep a dry erase board on your fridge. I learned this from a friend of mine who is a chef. I keep an ongoing grocery list (which never gets lost because it’s stuck to the fridge). I also post my menu for the week, including breakfast items. Additionally, I use it to remind myself of what foods I need to eat up before they spoil.

4. Plan your meals around the weekly ads. Your weekly ad should be your best friend when you’re deciding when and what you’ll eat for the next 5 to 7 days. Don’t underestimate how much you’ll save. I love nothing more than hearing the woman at the checkout say, “You save 45 percent on your grocery purchases today … and without coupons. Good for you.”

5. Create a stock pile. Take advantage of awesome deals – especially on items you can freeze (like meats) and on canned items you can store for up to a year or more. If you buy these items on sale, you’ll save hundreds of dollars in no time at all. I only buy chicken when it’s on sale at the rock bottom pricing – which comes up every few weeks.

Question: If you had $50 extra dollars each month, what would you do with it?

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