Create a Budget or Spending Plan

Most people hate hearing the word budget.  I noticed a few years ago financial books and counselors started calling it a spending plan.  No matter what word you use, it’s still a piece of paper with how much money you should spend every month and hopefully not have a negative at the bottom.

The easiest thing to fill in on a budget form is your expenses that have set amounts such as your mortgage or rent, student loan payments, car payments, cable bill.  The next items are things such as your water bill, electric bill and telephone.  These are items that may vary from month to month but you should still be able to come up with an average amount.  The hardest things to determine are items such as groceries, eating out and recreation, clothing, etc.  If you are tracking your expenses, this is where the tracking will help the most.

Another way to determine amounts is to do research on what the national average is for spending on groceries, housing, clothing, etc.  I have included some links below regarding averages and blank budget forms.   

http://cgi.money.cnn.com/tools/instantbudget/instantbudget_101.jsp

http://www.crown.org/Tools/Calculators/Budgeting_SpendingPlan.asp?frmIncome=50000&frmTithe=4500&frmTax=7000&selection=1&Submit2=Calculate+Budget

http://www.kluth.org/suggestedbudget.htm

http://office.microsoft.com/en-us/templates/TC010233411033.aspx?pid=CT101172321033

I know that budgeting is not fun for most people.  It’s boring and can be disappointing at times when you realize you don’t make or have enough money to budget for the things you want or need.  But if you manage and budget your finances, you will find there will be less stress on your life and marriage. 

I leave you with a great verse:

Luke 16:11
So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches?

If you have any questions or need additional resources, please leave me a note!  Good day – Dana

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How Two Balance the Checkbook

I always like to participate in Frugal Friday sponsored by Biblical Womanhood.  Hop on over to Crystal’s blog for tips.  My tip here is just to say that it is wise that your husband and you know the shape of your bank account at any given point in time.

I must be kidding right? I mean surely I am not suggesting that your husband and you balance the checkbook together. 

I am NOT advocating that both of you balance the checkbook together.  I believe that the husband and wife should pray about how they manage money together. I also believe that the Lord will lead you both to work out what best fits your family. 

I am just telling you that Mike and I ventured to do this about oh a year ago.  I tell you that it’s a work in progress and one that is not perfect at that.  We just like to know at any one point what the balance is in our bank account.

I just feel that it’s good for both of us to know the true shape of our checking account. So how does it work for us?

1) We have a central location for our bills.  We file our bills in a tray in the computer room.  I try to make sure that every bill gets to that location.  Yes, it’s not a perfect process. One or two bills occasionally find a home elsewhere somehow.

2) We have a central location for the checkbook.  If it’s not on our person, I know where to locate it in the home.

3)We use online banking.  We check our account online consistently. You get a daily listing of transactions such as purchases and withdrawals made on your account. This just helps us to double check what we have written down in the check register. Or it helps to locate reasons for the discrepancies. 

4) We sit down together when we are going over the bills and we balance the checkbook together. I just want to say at first it wasn’t easy. Two different perspectives here.  However, we have done well to work together over the months.

5) We are honest about our purchases.  Mike and I have made it a policy to tell each other about our purchases whether big or small.  I really believe that honesty here is the best policy.

Charlotte 

Are you tracking?

Just a wanted to check in and see if any of you took the challenge to track your expenses for 30 days…..

Unless you know where your money is going, you can’t create a realistic budget.

Check out my previous post on tracking:  https://practicalfinances.wordpress.com/2008/06/09/track-expenses/

My TOP 10 ways to cut EXPENSES!

1.  Cut cable or satellite (Yes, we have done this and currently use an $20 antenna that picks up all the major networks and some other channels)

2.  Increase your house insurance deductible (Yes, we have done this also – it really does not help your insurance rate to make small claims – it’s better to pay them out of pocket unless you have extensive damage).

3.  Take the extras off your telephone service (call waiting, caller ID).  If our line is busy, most people have my cell phone and call it.

4.  Commit to not buying anything decorative or electronics for the house for 3 months.

5.  For credit card debt:  Call your company and negotiate a lower APR.  This does work in most cases.  If you have received a solicitation in the mail from another credit card company with a lower APR, ask your company to at least match it.

6.  Increase your car insurance deductible (some companies such as Progressive, offer a coupon for $250 or $500 off on your deductible).  If your deductible is $500 and you have a coupon, technically you have a $0 deductible so perhaps raise your deductible to $1,000.

7.  Commit to spending a certain amount on groceries.  I know several families of 4 that are spending on average $100 a week.  If you are over this amount, try to make a goal for 3 months to reduce your grocery spending.

8.  Commit to only eating out once a week or sharing a dish with your spouse when you go out.  Another thing is to only order water.  Soda and tea at restaurants can cost up to $3 each.

9.  If you have a house phone and cell phone, consider cutting back your cell phone minutes/billing plan.

10.  Okay this is going to bother some of the women out there…consider not getting your nails done or hair colored in a salon for 3 months.  Ask your hair stylist what color she uses for your hair and go do it yourself.

11.  Sorry I have to add one more…If your vacation is draining all your savings or being put on a credit card, then skip it.  It will not ruin your child(s)childhood if you don’t have a vacation this year.  There are MANY MANY things you can do with your child(ren) or as a couple that don’t cost as much as a weekly beach or mountain vacation.  Go for a weekend instead.  Take a vacation day but splurge on a water park one week and a museum another week.   

My point in all this is to list all your extra expenses (meaning anything not necessary).  Cable and caller ID are not necessities.  These things may make our lives more enjoyable but they are not required for us to live unless your job requires it.  List these items and pick 2-5 to get rid of for at least 3 months.  PLEASE note that these are things I have experienced.  Each of you may have your own personal extra things you feel you can live with and without.

If you have other things to add, please post it.  I love hearing from you!   Have a great Monday – Dana

Lack of Communication: A Budget Buster?

Can lack of communication be a budget buster? Well, let’s talk it over. Communication with your spouse I believe gets better over time. Though we may wish that we could just snap our fingers and magically become the best communicators with our husbands. Wouldn’t that be nice? How about just snapping our fingers and we would magically be on the same page. Oh, if it were that easy!!!

Genesis Chapter 2:24

Therefore shall a man leave his father and his mother, and shall cleave unto his wife: and they shall be one flesh.

Communication with your spouse is definitely a process that the Lord brings about over time. Yes, it can affect finances. And hopefully, over time your marriage will reflect the husband and the wife working together as one in finances. But let me remind you that it is a process and if it is an area of concern for you, please turn it over to the Lord and ask for His wisdom and guidance.

Here’s our life experience in the area of spending particularly on groceries. I always make it a point to call my husband BEFORE I go to the grocery store. That way I pick up whatever he needs. Also I can plan to adjust my grocery list according to the amount I planned to spend. That way we keep ourselves from making that extra grocery trip as well.

Secondly, Mike makes a point to ask me where a particular product is located in the house. Or if I see him searching for something, I immediately ask him what he needs. Lots of times I do locate what he needs. That is far better than Mike thinking that he needs to go buy something and then we end up with two products because we really had the product in the house in the first place.

So that’s our policy to talk to one another before going to the grocery store or buying something. Or checking with one another about where a product is located in the house before buying another one. That way we keep from spending gas on extra trips to the grocery store or buying something that we already had.

I hope this was helpful to you. There are so many areas to communicate about when it comes to finances. I picked this area on spending because I felt it was easiest to relate.

Charlotte

Preapproval from spouse!

This week our focus will be on COMMUNICATION.  Charlotte has a great perspective on this later in the week.  For today, I’m posting something my husband and I have done since we married.  We made a commitment to one another that we would not make a purchase over $50 unless we asked the other one first.

We’ve been married for over 12 years and never had a disagreement when we followed this rule we made with each other (have I mentioned the rule has only been broken once in our marriage?).

Before you say that’s impossible, let me explain.  This does not apply when buying groceries, major school shopping or celebrations like anniversaries.  It applies in situations when one of us are out and come across a piece of furniture or electronic item or shoes that are not on the needed list.  By having this rule, it has kept us from impulse buying and respected one another in our JOINT finances.  There are times when I missed a good deal on something because I was unable to talk with my husband BUT it has prevented bounced checks and arguments over money. 

I mentioned this rule was broken once…a couple of years ago I was scheduled to photograph a music event and really needed a larger lens for my camera.  We usually save purchases like this for special events but my husband went ahead and bought the lens and presented it to me as a “just because” gift.  I was so SHOCKED! (and overjoyed!)  Please let me stress that my husband is aware of our finances although I do the day to day bills and tracking.  He knew what we could afford and gave a great gift!

Come up with a finance rule for your household or post an agreement you have with your spouse.  I would love to hear from you!    Have a great day!  Dana 

Careful planning before purchasing: Part II

Yesterday, I talked about tips for careful planning before purchasing.  Today we have five more tips yet to go!

3.  Make a price comparison. A good resource to use for price comparisons is the Internet.  Many stores will list the prices of items they sell on their websites.  Calling the store and its competitors for prices is just as efficient.

As you shop around for the best price, inquire about the upcoming weekly or holiday sales.  Significant savings can be gained during this time.  When it comes to items with digital technology, sometimes you can wait a few months or six months or a year and notice the price come down significantly.

4.  Beware of snares at the purchasing point. On several occasions, I have called the store to confirm that an item I wanted was in stock.  But when I finally arrived at the store, a clerk would tell me that the product was in fact not in stock.  Yet there would be another item comparable to the one I needed, but it would be at least $10 more.

At the purchasing point, it is easy to fall into the snare of buying a higher-priced item.

5.  Pray for God’s wisdom before purchasing.  I like to pray to the Lord about my purchases however big or small they are and ask God to lead me to the item I NEED to purchase.  The Bible says to walk wise and not as unwise. Ask the Lord to give you wisdom regarding your purchases.

6.  Read God’s Word.  It’s so easy to buy impulsively.  I like to face up to impulse buying by quoting scripture.  Here’s a verse for you to ease the pressure of this temptation  “Cast your burden upon the Lord and He will sustain you; He will never allow the righteous to be shaken”  (Psalm 55:22) Ask the Lord to give you the scripture verse you need to avoid impulse buying.

7.  Observing elderly Christians. I tend to observe the godly purchasing habits of elderly Christian women or Christian couples.  It’s amazing how they tend to do with out or wait lengthy periods of time before purchasing things. 

Well, friend, I hope I have been an encouragment to you today. Thanks for stopping by.

Charlotte