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Adjusting Your Budget for Changes in Your Life

These days more than ever everyone is trying to find ways to cut back and trim their expenses. Whether you are expecting a new baby or planning to retire within the next few years, the most painful part about adjusting to your new lifestyle is often changing your spending habits. Because we are creatures of habit new spending habits may take a long time to get used to, but once you can accomplish this, the rewards are endless.

Start in the Fridge
If you want a “quick fix” you should start by looking in your refrigerator. If you use what’s in there more you can save yourself a bundle almost immediately. First, bring a lunch to work. So many of us are in the habit of grabbing something at a cafeteria or fast food joint instead of making a sandwich or bringing something from home for lunch. While this in itself is keeping the local businesses going, your wallet is suffering the most. You can also try having more meals at home. While a meal out once in a while is not too bad for your budget, eating out or ordering in more than a few times a month can add up to the tune of hundreds of dollars every month. You would be in for a big surprise if you tracked your eating out expenses for a month.

Turn It into a Game
Turn your food shopping into a game. Challenge yourself to see how much money you can save each week. Set aside a sufficient amount for the groceries needed and then see how far under this amount you can achieve. Get that newspaper, clip those coupons and check the stores and the sales that are going on. There is a lot of competition going on right now – take advantage of it. Be careful though not to waste precious gas and time running from store to store. Find the stores where you will get the biggest bang for your buck and shop at those.

Keep to the List
One of the most important things to remember before going out to the store is to have a grocery list of the items you need and stick to the list. You can so much time and money by avoiding all those isles and items you don’t need to see and be tempted by. Usually, if you go out without a plan you are likely to pick up items that you could have done without. Also try and plan your meals ahead because this will reduce waste. Whatever you spend under your allotted amount, put in a jar and save it to see how it can pile up. You might even want to save it up for a special purchase. This way it is not coming out of any other money. And make sure you don’t do your grocery shopping when you are hungry!

Reduce Your Utility Bills
Your utility bills are places where a lot of money can be saved. It can be easily achieved by simply turning off lights when you are not using them, using the dishwasher only when it is full, lowering the thermostat, or buying a programmable one. Programmable thermostats allow for regulation of the temperature in your home and can reduce your bills greatly. The same can be said for air conditioning. Using these tips will help to lower your utilities a great deal over the year.

Your TV and Cell Phone Bills
Another way to save is to reduce your TV and cell phone bills. It seems like there are endless channels available on cable today. However, most premium channels replay the same movies so look into your current package to see what can be removed. As far as cell phones go, if you have minutes left over each month, chances are pretty good that you are over paying.

Achieving Peace of Mind
Cutting back requires a lot of determination and willpower. Adjusting our spending habits is not always easy, but when approaching a life change, it may be necessary. The peace of mind and wallet you gain will be well worth it.

Additional Resources:
Household Budget Manual
Budget and Personal Finance Ebooks
Success Magazine : What Achievers Read
Books by Dave Ramsey
The Difference: How Anyone Can Prosper in Even The Toughest Times

Tags: how to budget monthly, how to budget a household, cellular telephone, how to home budget, new additions, life changes, personal finance, if you, fast food, new life

Filed Under: Finances

Setting Financial Goals

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Everyone can agree on the value of financial security. In today’s economy, it is important to do all that you can to help secure your financial future. Once you know where your finances stand today with a basic personal budget, you can begin to implement some goal-setting strategies towards your financial future.

Why Set Goals?
Just like with anything else in your life, goals give you a focus for your efforts. Without financial goals, it is hard to plan anything. In financial situations, lack of goals can lead to short-sightedness and inadequate funds for important things like college, retirement and vacations. Now, let’s think about this some more. What are the goals you have in your life? Don’t only think about right now or next month but think about the long term; what do you want your money to do for you? It’s a good place to start.

Various Federal Reserve Notes, c.1995. Only th...

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Financial Goal Setting: Nuts and Bolts

Make a budget – You won’t know how much extra money you may have, or how much extra money you will need unless you know the present details about your income and expenses. Try to make a budget as detailed as you can to give you an accurate picture. Track your expenses for a few months and look back in your bank account and on your credit card statements to see how much money you are spending on different things.

Write your goals down – When you just have the details in your mind, they can easily get forgotten and unclear from time to time and that leads you nowhere. It is wise to use a pencil so that you can change and modify your goals as you need to while you are writing. List them in no particular order but just get them down so you can proceed to the next step.

Prioritize your goals – Now you need to focus on your most important goals. Rank them in order of importance and focus on working with the most important ones first. You will also find out through this exercise what is more important for you and which are your most pressing financial obligations.

Make your goals specific – What have you written down? If you wrote something like “I want to buy a new car,” this is too vague. We all would like a new car. How can you turn that into a strategy that you can actually implement in a timeline? Instead say, “I would like to save $6,000 towards a new car by this time next year.” Now, you have a timeline and a specific money goal.

Break them down – The above goal can even be dissected into smaller, more manageable goals. If you are having trouble making ends meet now, saving $6,000 might as well be like saving a million dollars. But, if you set a short, medium and long-term goal to reach the ultimate financial goal, you can get your head around it. Now you can figure out how much money you need to set aside each month until then to achieve your goal. You will need to decide how to adjust your budget; cut expenses and increase income to match this amount. So, here goes: “I want to save $500 every month. I also want to meet a goal of $3,000 by mid-year. At the end of the year, I project that I will have saved $6,000 towards my new car.” This is just an example. You may find many places in your budget where you can cut back and you may be surprised at how much extra money you can find.

Evaluate and re-evaluate – Every couple of months, take another look at your goals. Have they changed? Do you need to adjust them? Are you still on track to meet them by your set deadlines? If not, you can readjust the timeline to account for changes in your financial circumstances.

Work smarter not harder to achieve your financial dreams. With a little strategy you can enjoy a life full of endless possibilities. You can take charge of your finances with a little bit of planning instead of living from pay check to pay check.