Creating an Effective Budget Via Frugality

Thursday, August 25, 2011

Creating a well-planned budget can help you reach your goals of frugal living and it is essential in keeping finances in check. The following are a variety of useful tips when making a budget:

1.Add Up Your Total Monthly Earnings

Calculate the total amount of money you pull in every month, including income, investments, and residual income. Gather financial statements and keep them organized.

2.Evaluate Your Monthly Expenses

Create a list of all your regularly monthly expenses including mortgage or rent payments, car payments, insurance, utilities, groceries, and minimum payments toward debt. Also include amounts you spend on niceties such as entertainment, eating out, and hobbies.

3.Divide Expenses into Fixed and Variable Categories

Fixed expenses are items that typically stay the same every month and are necessary for your way of life. Examples include mortgage or rent, car payments, utilities, and debt payments. Variable expenses are items that will change on a monthly basis such as groceries, gas, entertainment, and dining out.

4.Deduct Expenses From Earnings

Try out the effectiveness of your current budget by deducting monthly expenses from earnings to see if you have any money left over at the month’s end.

5.Create a Plan for a New Budget

If your current budget ends in a negative amount, rework the numbers by looking over every area and determining where to make cuts.

6.Assess Your Budget

At the end of every month, look over expenses and see if they are matching up to the budget. If they are over, determine if you need to rework the budget or if you need to work harder to reduce unnecessary spending.

Employing a variety of saving strategies on a monthly basis can help you maintain your budget and be on your way to a more fulfilling and thrifty lifestyle. Here are five great ways to stretch the dollar.

Frugal Saving Tips

•Conserve Energy

Check your home and determine if you are wasting energy. Make sure to check windows and weather stripping and turn off lights and electronic equipment when not in use.

•Pay Bills Online

Whenever possible, pay your bills online to reduce the costs of stamps and checks. Online bill pay also reduces the incidence of late fees.

•Clip Coupons

Subscribe to the Sunday paper and take the time to clip coupons for items you use on a regular basis. Many coupon inserts also feature coupons for restaurants, clothing items, and portrait sessions.

•Eat Out Less

Eating out cost much more than eating at home and set up a goal to eat out less or limit it to once a month. A fun alternative is planning theme nights such as breakfast, Mexican, and Italian.

•Recycle Printer Ink Cartridges

When your ink cartridges have run out, recycle them to receive store credit or coupons to be used toward new cartridges. Various stores such as Office Max and Staples offer rewards programs for customers who recycle their used printer cartridges.

•Look for Freebies

Research a variety of online websites to find an array of free offers and samples.

•Become a Library Member

Regularly buying books and movies can get very expensive and an effective solution is checking out books and movies from your local library free of charge.

•Buy Generic Printer Ink and Toner

Many retailers offer a variety of generic ink and toner products such as toner cartridges copier toners, and many different types of printer ink.

•Use Cash
Many studies have shown that when people use cash to make every day purchases they save more than 15 percent versus using a credit or debit card.

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