frugal budget

Get You Budget Right by Managing Your Personal Finances

March 2, 2014 by illinois

If you wish to stay afloat in your personal finances, it is important to maintain a proper household budget. Without maintaining a proper household budget it will become very difficult to efficiently manage where your money is spent. In order to make sure you stay away from a misguided budget, you might want to follow a few general guidelines in order to get your budget right.

In Home Expenses

Housing expenses are the biggest and most costly part of any budget. Thing that you should make sure to include while writing out this budget are your:

Rent/Mortgage
Home Insurance
Taxes
Home Modifications
Utilities, such as, electricity/gas/water/trash/sewer/phone/cable and internet

Of course, the rent/mortgage is the biggest part of this budget and should account for about 25% of your budget. All in all, with everything listed included your budget expense here should be about 30-35% of your monthly income.

Everyday Expenses

Living expenses is a very broad category to try to narrow down into a list. Many people will find themselves overspending in this general budget because there are so many different things to consider. In order to get your budget right, these expenses should only account for 20% of your monthly income. Things to include in this category are:

Groceries
Eating Out
Entertainment
Healthcare
Clothing and other Personal Items
Gifts
Monthly Subscriptions
Cable/Internet

Budgeting your Transportation Expenses

Transportation is a necessity in order to run errands, get to work and travel. It is possible for this section of the budget to become very expensive, especially if you are making payments for your vehicle. While planning for your transportation budget, it is important you try to stay at or below 20% of your monthly income, in order to get your budget right you should account for your:

Loan Payments
Expenses on Gas
Vehicle Insurance
Maintenance and Repairs
Costs for Parking
Toll Roads

If you do not own your vehicle but are using a means of public transportation, you might wish to substitute the loan payments and gas expenses for the fares it costs to use whatever form of transportation you are using, whether it is bus, taxi or subway fares. If you are planning on buying another car in the future, get your budget right in the future by adding your savings as part of this category.

Debt

In order to get your budget right you will wish to make a means of saving some extra money each and every month. This is often a difficult task to accomplish, especially if you are dealing with debt. Once you have focused on and figured out the rest of your budgeting expenses, it is important to turn some of your focus onto your savings account. If you have debt, it is important to focus on paying that off before focusing too much on your savings account. Make sure to try to keep your debt repayments at a minimum of 15% of your overall budget.

Savings

Many people think that having a savings account is unimportant, especially while they are busy paying off other debts, this could not be more wrong. Including a savings system into your budget is very important, especially in dealing with unforeseen emergencies, as well as your investment savings. If you have other forms of investments other than your 401k plan, you should put that in your budget here. Make sure to only use about 10% of your savings plan in this category.

Free of Charge

If you have managed to stay out of debt and are simply looking at getting your budget right. You might want to consider using the 15% of your debt repayment budget and putting it into your savings budget, this would put you at saving 25% of your monthly income. Many people might consider 25% of your monthly income as savings might be too high. But if you think about it, it’s really not that high. Although it is promised, there is no guarantee of receiving your social security benefits after retiring and with the inflation rates the cost of living will only rise throughout the years. If you think about your savings, when you reach retirement, wouldn’t you rather have more than enough money, or not quite enough?

Breaking Down the Budget

Let me break it down for you so it is easier to get your budget right.

35% of your monthly income should go to housing costs
20% is for your everyday expenses
20% is for costs of transportation
15% is for Debt repayment
10% for savings

When deciding on how to get your budget right this categories should be your main point of focus. It is important to balance your ratio in each category, if you have debt and wish to pay it off more quickly, then you might want to consider taking a percentage out of one category and using it in your debt repayment category and so forth.
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Unexpected Ways to Save Money

November 14, 2013 by illinois

There are many unexpected ways to save money that a person to help increase your financial situation. All over the country, people are looking for ways to cut back on the expenses. Everything in the economy seems to be increasing price ways; it also seems that the quantity is reducing. There are many ways that a person can stretch dollars to increase your budget.

Coupons

Coupons are for all different kinds of situations, not just groceries. There are coupon services on the web that can help you to pick out the perfect coupons for just you.

There are coupons that designed for restaurants, business cards, and even buying tea. A person can even find coupons for services that they receive. Before making, any changes to services you have be sure check out the web and see if you can find any coupons. There are many discounts out there for anything from cell phone discounts to lawn care services.

There are special web services like a Chrome extension called Honey that help. This is designed to help you check for discounts and coupons on the things that you are purchasing. This extension is designed to display the valid discounts from anywhere in the world. Out dated coupons is a thing of the past with this Chrome extension.

Crafty

When people think of crafty, many think of those things of those projects and DIY endeavors. However, being crafty can be as simple as making your favorite food at home rather than buying it in the store. Making your own foods can be an unexpected way to save money.

For example, hummus is a food that is simple to make from home but can be costly to purchase in the store readymade. Hummus is putting garbanzo beans into a blender with some garlic and tahini paste. Blend the ingredients together and you will begin to have a wonderful hummus. If you find it to crumbly, all you have to do is drizzle a little olive oil into the mixture.

Barbeque sauce is another simple thing to make at home. All you need to do is combine a teaspoon of soy sauce, garlic powder, and just a small amount of pepper.

There are many places online that you can find videos that can help you to make some of the best dinners you have ever made. You are able to create a beautiful atmosphere within your home that can be better than any restaurant.

Negotiations Are Allowed

One of the unexpected ways to save money is through negotiation. There is nothing wrong with negotiating with someone to decrease how much you will be paying. When you are trying to purchase a floor model, you can also haggle for a lower price.

It is also common for places to offer price matching. This is a service that isn’t always advertised, so you might want to ask a manager to see it they will let it happen. Another part of price matching is searching out the better prices. Some of the companies even offer the ability to use online pricing as part of the price matching.

Maintenance

It is important that a person maintain the things that they do already own. Keep up the maintenance on the cars that you have. Be sure to change the oil when you are supposed to. This can extend the life of your care for thousands of miles.

Preserve your desktop computer by running a can of air through it, blowing out the particles from inside the fan as well as in the keyboard. This can help to properly ventilate your computer and even increase the speed that your computer is working at.

Refurbish

Whenever you are searching for something new, remember that you should be able to buy a refurbished version of what you are wanting. If you are in search of a cell phone, do not be ashamed of getting last year’s model. Many models of phones and tablets have not changed recently. The latest model will run smoothly, however unless you are an addicted user a refurbished device will do.

Refurbished computers will also be cheaper than those brand new versions. Many people get new computers just because and that offers the opportunity for you to get one refurbished.

Renovate, Don’t Move

When you are looking into moving because you are in need of a bigger space think about renovating the home you are in. Many times the cost of building a new home can be cheaper that purchasing a new property. Sometimes it can even be more cost-effective to rent a bigger home while you save for the perfect home to fit your family.

When you are needing to replace parts in your car use the cheapest parts first. Also, it is important to know when you have invested all you can into something.

How Can A Frugal Budget Be Partnered With Debt Consolidation

June 4, 2013 by illinois

Frugality is something that people must adapt if they want to get out of debt – at least temporarily. In fact, there are some debt relief options that require a frugal budget to make it work.

Debt freedom requires some sacrifices and to be able to get out of it faster, you may want to maximize your debt payments. That could mean making a few severe cutbacks on your budget to compensate for your limited resources.

A frugal budget means you are living on bare necessities only. This means all of your entertainment activities will have to be cut off (or at least only one or two of the cheapest will remain). It also means you will keep yourself from spending on new clothes, new shoes and from dining out. Since you will be living this way, it is best to only apply this type of budget for a short period.

This is why a frugal budget is best partnered with one kind of debt consolidation – balance transfers. As a debt solution, this involves getting a new card where you can transfer your high interest balances to. You have to pay 3% of the debt amount as a balance transfer fee to make this debt solution possible.

These balance transfer cards usually come with an introductory promo period that provides the cardholder a low or zero interest rate. The debtor enjoys 6 – 12 months of this interest arrangement wherein every payment that they make will be towards the principal debt. It allows them to maximize their income so that they debts will be lowered significantly.

This is where a frugal budget can be of great help. By living on a frugal budget while going through this period, the debtor can maximize their debt payments. Despite the strict regulations on your spending, you should be able to survive this because at the back of your mind, you know that it will only be for a short time.

Some people cannot implement this type of budget because the restriction is too much. Most of them may start using it but they falter in the midst of it. You can say that it is similar to a crash diet. Very few really come out successful and sometimes, they end up worse than when they started. This same concept is applicable to a frugal budget.

You want to make sure that if you apply this in your life, you know when it is going to end. Sometimes, knowing how long we have to make the sacrifice helps us complete that painful period. This is the main premise why a frugal budget is best partnered with a balance transfer debt solution.

After the promo period of the balance transfer card, high interest rates usually take effect. Make sure that you are ready for this. You can actually opt to live on a frugal budget even after the promo is over or you can start to loosen the restrictions. In any case, you should keep the budgeting habit with you. That will help keep you from accumulating any more debt that could threaten your financial security once more.