Beating Broke

Personal Finance from the Broke Perspective

How to Create a Budget for Smart Spending Money

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Creating a budget is an essential skill for managing your finances effectively. By planning your spending and saving strategically, you can ensure that your money works for you and not the other way around. Here’s a comprehensive guide to help you create a budget for smart spending.

Understand Your Income

The first step in creating a budget is understanding your total income. This includes your salary, any side hustles, investments, or other sources of revenue. Knowing your total income allows you to plan your expenditures without overestimating your financial capabilities.

Track Your Expenses

Before you can set a realistic budget, you need to know where your money is currently going. Track all your expenses for a month, including small purchases that might seem insignificant. This will give you a clear picture of your spending habits and highlight areas where you can cut back.

Categorize Your Spending

Once you have tracked your expenses, categorize them into groups such as housing, food, transportation, entertainment, and savings. Categorizing your spending helps you identify which areas take up most of your income and where adjustments can be made. This step is crucial for creating a balanced budget.

Set Financial Goals

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Setting clear financial goals provides direction and motivation for sticking to your budget. Your goals can be short-term, like saving for a vacation, or long-term, such as buying a house or retiring early. Having specific objectives helps you prioritize your spending and saving habits.

Create a Budget Plan

With your income, expenses, and financial goals in mind, create a budget plan that allocates your income to different categories. Ensure that your plan includes a portion for savings and emergency funds. A well-structured budget should leave room for both essential expenses and discretionary spending.

Monitor and Adjust Your Budget

A budget is not a set-it-and-forget-it tool; it requires regular monitoring and adjustments. Review your budget monthly to compare your actual spending against your planned budget. If you find discrepancies, adjust your spending or revise your budget to make it more realistic.

Use Budgeting Tools

There are numerous budgeting tools and apps available that can simplify the process of tracking expenses and managing your budget. Tools like Mint, YNAB (You Need a Budget), and PocketGuard can help you stay on top of your finances with minimal effort. Leveraging technology can make budgeting less tedious and more accurate.

Benefits of Smart Spending

Smart spending goes beyond just saving money; it improves your overall financial health. By spending wisely, you can avoid debt, build a savings cushion, and invest in your future. Smart spending habits lead to financial stability and peace of mind.

Tips for Sticking to Your Budget

Sticking to a budget can be challenging, but certain strategies can help. Set up automatic transfers to your savings account, avoid impulse purchases by making a shopping list, and review your financial goals regularly to stay motivated. These small steps can reinforce your commitment to smart spending.

Final Thoughts on Budgeting for Smart Spending

Creating a budget for smart spending requires effort and discipline, but the rewards are well worth it. By understanding your income, tracking your expenses, and setting realistic goals, you can manage your finances effectively. Regularly monitoring and adjusting your budget ensures it remains a useful tool in achieving your financial objectives.

Save Money and Eat Healthy: Rent an Apple Tree

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When my health began to suffer a few years ago thanks to stress, being overweight, and having some intestinal issues, I started taking much better care of myself.  That meant eating organic foods, following a Paleo diet, and losing over 70 pounds.

I used to always say I didn’t have money to buy organic foods, but my health issues weren’t cheap, so I decided in the long run, eating the best food I could was a priority, even if it was more expensive.  Over the years, though, I’ve found ways to cut costs on eating organic.  One way is renting an organic apple tree.

How Does Renting an Apple Tree Work?

I simply Googled “rent an apple tree” to find one near us.  Then, I rented one apple tree for $55.  All the apples on that tree were mine.  I paid in the spring, and the Paula Red apples were ready in August.

Rent an Apple Tree

The farm called me to tell me when the apples were ripe, and then I and my family headed out to the orchard to pick the apples.  It took less than 45 minutes, and we left with 94 pounds of organic apples.

What Did We Do With All Those Apples?

Paula Reds don’t stay good for long, so we turned them into applesauce.  (And we ate a lot of them fresh.)  We ended up with 28 quarts of applesauce, which I stored in the freezer.  It took me, my husband and son working together 7 hours to process all of the apples.

We didn’t have to add any sugar because they were naturally sweet.

How Much Did We Save?

The lowest price I have been able to find for organic applesauce is $2.50 for 16 ounces at Trader Joe’s.   Just like our applesauce, Trader Joe’s applesauce only contains organic apples.  There are 32 ounces in a quart, so one quart of Trader Joe’s applesauce is $5.00.

One quart of our homemade applesauce from apples on our rented tree is approximately $1.96.  Overall, we saved $85 and will have enough applesauce to last us through the winter.

We also signed up for another apple tree in October for apples that are suitable for storage.  We’ll be able to keep them in our refrigerator for several months and eat them fresh.  If we get another 94 pounds, we’ll be paying just 58 cents a pound, which will be a significant savings over the grocery stores where I can never seem to find organic apples for less than $1.99 a pound.

It’s Not Just About the Savings

Still, it’s not just about the savings.  What matters is that we know exactly where the apples came from and how they were processed.  In addition, they are local, in season, and organic, which is the best way to eat food.

If you want to feed your family healthier foods but feel that they are out of your budget, don’t despair.  There are several unique ways to feed your family organic food on a budget.  Renting an apple tree is just one of those ways.  We’ll be sure to do this again next year.

Have you done something like this? Do you buy food direct from the farmer?

Original Photo Credit:MetaphoricalPlatypus, on Flickr.

Capital One 360 Review

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For many years, I was a user of ING Direct and their online banking products.  When word went out a while back that the US branch of their online bank was being sold I began to worry that a good thing was about to be ruined.  When we learned that the company that was buying them was Capital One, it didn’t exactly help me not worry.  I’ve had a credit card from Capital One for longer than I’ve had an account at ING Direct, and while I’ve never had a terrible experience with them, I’ve never really felt that I was anything more than just another cardholder; easily replaced and nothing worth going out of their way for.  If that level of service came to the online bank side after the purchase of ING Direct, I might have had to find something else.

The prospect of having to move my accounts at what was ING Direct to somewhere else upset me a bit.  I’ve tried several of the online bank options, and so far, haven’t found one that was as easy to use as the accounts were with ING Direct.  Now that ING Direct US is no more, and it’s been sold to Capital One, and re-branded to Capital One 360, what has my experience been?

Click here to start saving with Capital One 360Surprisingly, I have no complaints.  I truly expected that they’d start squeezing in some new fees, or making it harder to get things done, but the experience so far has been very similar to what it was with ING Direct.  There’s the obvious rebranding that came with a change of logo and color scheme, but for all intents and purposes, they’ve done a very good job of keeping the function and service levels where they were when it was ING Direct.

I suppose there may be some things behind the scenes that I don’t see that are different.  And they may just be biding their time before they start implementing some new fees and roadblocks, but if so, they are taking their sweet time doing it.  In the mean time, many of the features that I really loved about ING Direct are still resident in the Capital One 360 system.  It’s still super easy to create a new account, making it simple to have an account for each purpose and being able to segment your money by purpose.  Every other place I’ve tried this at, make it much more difficult to create a new account and that process becomes a roadblock to use.

The interface of Capital One 360 is very easy to use, with all of the major functions and features that most bank customers use right at your fingertips (or mouse pointer I suppose).  The rates that they pay on their savings and CD accounts still aren’t the best around, but they remain competitive with most other online banks, and they are double and triple what my local banks and even Credit Unions are paying.

The connection between Capital One 360 and Capital One Sharebuilder remains, making it easy to transfer money to investment accounts and IRAs at Capital One Sharebuilder.  Does that make a huge difference?  Not really, but it is convenient.

Overall, I think Capital One has done a really good job of bringing the Capital One 360 accounts into the fold and not rocking the boat.  I hope that they remain dedicated to keeping the excellent service and system in place.  Even with a new name, Capital One 360 is still my favorite online bank.