Search Results for: budget

Couponing Doesn’t Need to be Extreme

November 7, 2011 By Shane Ede 13 Comments

Every day, I hear people say that they don’t use coupons because they don’t have the time to go through the papers and mailers and clip the coupons. “It just takes too much time” they say. Those same people, will spend hours budgeting and finding ways to save themselves money, but they don’t see couponing as a viable use of their time and efforts. While coupons may not be as important to your financial health as a budget, they can be just as good as many of the other saving methods that you will employ.

With the popularity of extreme couponing, it’s no wonder that people feel that they need to spend hours each week pouring over newspaper inserts, clipping coupons, then sorting them all into categories and then making plans for where they’ll shop and what they’ll buy. In their mind, they see piles and piles of inserts, and closets full of extra supplies that they’ll need years to use up.

Couponing doesn’t need to be extreme, though. If skipping your daily latte can be a good strategy for saving a few dollars a day, so can clipping a few coupons. Taking a few minutes each week to flip through the inserts in your paper and clipping the few coupons that you find for the things that you buy regularly can easily save you a few dollars a week. Signing up for manufacturer email newsletters can often result in an electronic coupon to print out once or twice a month. A few extra emails a month is a small price to pay to save a dollar or two.

Now, the thing to remember here is that you aren’t going to retire off of the money you’ll save. And, you certainly won’t be sending your kids to college with it either. But, saving money is saving money. A few dollars here, and a few dollars there all adds up in the grand scheme of things. Heck, maybe you clip coupons so that you can treat yourself once a week to that latte that you’re currently skipping.

Anything that can be done, has been done to an extreme. But, just because the extreme version of something is popular, doesn’t mean that it has to be the only way. Just like there are people who run extreme marathons of 100 miles or more, doesn’t mean that you can’t be a runner. Just because there are hyper-milers who squeeze every extra bit of MPG out of their cars, doesn’t mean that you can’t employ a few of the same methods to save a bit on gas. And, just because there are people who spend hours each week clipping, sorting, and analyzing coupons, doesn’t mean that you can’t spend a few minutes each Sunday to save a few bucks.

photo credit: sdc2027

Create Your Own Layaway Plan

October 31, 2011 By MelissaB 9 Comments

The stores are already starting to advertise for the holidays, and several major retails are pushing the option of layaway as an option to finance your gift giving. While layaway was not offered in stores for years, it is making a comeback due to the current economy. You can choose to use layaway or not this year, though it is certainly a better option than financing gifts on credit cards, but why not also start your own layaway program?

One idea that revolutionized the way I budget is to set aside money each month for recurring expenses. I used to be a teacher, and I could choose to teach classes in the summer or not. Sometimes I did teach the classes, but a few summers I chose to take off, which also meant that I was choosing not to get a paycheck for three months of the year. Considering I was the sole breadwinner at that time, summers could pack a painful punch.

However, I began to enjoy my summers off and not suffer financially when I began setting aside money for monthly expenses. At the time, we required on average $2,500 a month to live, so that was $7,500 I needed during the summer months to survive without a paycheck. I received a paycheck nine months of the year, so I automatically deducted $833 a month into a special account to live off of during the summer.

Even if you have a regular paycheck coming in all year long, you can benefit from this plan. For instance, I know that over the course of a year I would like to spend $500 on gifts. Some months I may not spend anything, and other months I may spend $100 or more. To make sure I have the money set aside, I would take $500 and divide it by 12. Then I would put aside $42 a month for gifts. It would be its own little gift fund, and I would draw from it when I needed to purchase gifts.

Likewise, my energy bill is very low in the winter because my landlord pays for the heat, but the electric bill is high in the summer because I have to pay to air condition or drafty apartment. I set aside $50 a month for electricity. During the winter months, my electric bill may only be $25. The remainder of the $50 after I pay the monthly bill goes in savings in a special fund to help cover the high summer electric bills.

If you set your monthly budget up based not just on your exact expenses for that particular month but for the average you will spend all year long divided by 12, you essentially create your own layaway plan. On months that may have higher expenses, you simply dip into the money you have already put aside. This type of budget makes your monthly outflow much more stable and protects you from the highs and lows of creating a budget based on each month’s actual monthly expenses.

photo credit: robertstinnett

A Simple Technique to Help Parents Meet Their Savings Goals

October 12, 2011 By MelissaB 15 Comments

Having kids is not cheap. There are many expenses that are associated with small children that are hard to get around no matter how frugal you are. For instance, if you are a dual income family, you must pay for daycare and disposable diapers as most daycare centers will not accept cloth diapers. In our area, daycare for an infant can run a family $1000 a month. You may rejoice when your child enters preschool because you will find an extra $1000 a month in your pocket. Instead of just absorbing that money back into your budget, why not earmark it for something else?

Imagine if you took that $1000 a month and invested it? That is $12,000 a year! You could continue to pay it to yourself, perhaps setting up a college fund for your child with the money you used to pay in daycare. In five years, you would have $60,000. After that, just let it sit and earn interest for the next eight years, and your child’s college education would be largely paid for.

What if one of the parents decides to stay home to care for the children, in part to avoid expensive daycare? They may not have the $1000 a month to put away. While this is true, there are still plenty of other expenses associated with young children that you eventually won’t have to pay. For instance, we are paying roughly $75 a month to diaper our two girls, and I anticipate within the next 6 to 8 months, both girls will be out of diapers. It would be very easy to just absorb that $75 back into the budget, but that isn’t what I plan to do. Instead, I plan to set up a college education fund for my kids and invest that $75 a month. Yes, $75 a month will not add up very quickly, and it certainly won’t put even one of my children through college. But it is a start, and it is more than we are putting away right now.

Likewise, if you have a monthly car payment, when the car is paid off, use that money to pay yourself a car payment so you can pay for your next car in cash. If you bought a car 7 years ago, and had a monthly payment of $475, and you paid off the loan in four years and continued to make that monthly payment, you would now have $17,100 set aside for a new car, which would be enough to buy a nice, one to two year old car for cash.

You may argue that the car payment or the daycare payment was a hardship and that now that you no longer need to pay those payments, you need the money to pay for other things. This might be true, but if your child was still younger than preschool age, you would find a way to make the payments because you would have to. Or, if you now have other expenses for your child such as after school care for $300 a month, deduct that from the $1000 you used to pay for daycare and save the remainder. If you can maintain that mindset, you will find yourself reaching your financial goals quicker than you imagined, simply by not seeing that money as “free money” to now spend as you will but rather as money to continue to invest in your and your child’s future.

photo credit: Pink Sherbet Photography