Budgets are an emotional drain for some people, and just a chore for others. Devising a budget is bad enough. Balancing them is even less fun. But managing the finances of a family is really not that different than managing the finances of a business. It's not easy, but it's a necessity.
While some people prefer good old paper and pencil, I like to use a Microsoft Excel spreadsheet. It's easy to track past expenses, as well as chart changes in total or specific expenses. And the more income and/or family members there are, the more likely you are going to want to track changes in expenditures.
Furthermore, if you plan to save any money at all - part of what this website is about - having a budget is crucial. It's amazing what you can find out about your spending habits when you have a big-picture view. You might just find that you have unnecessary expenses that could be used towards savings.
If you've never written up a budget, you've got some learning to do. My suggestion is to first start by buying 12 large manila envelopes, and 12 standard (#10) letter-sized envelopes. Label 12 of the #10 envelopes with name of each month in the year, as well as the year. Write in pencil so that you can reuse the envelopes. Do the same with the manila envelopes, but label them in pen.
Now, whenever you buy something, place the receipt immediately in the appropriate month's #10 envelope. Do it that day. If you're disciplined, at the end of the day, record all expenditures in your budget book or spreadsheet. If you're not so disciplined, do it at a fixed time, on a fixed day each week for the previous week. For example, if you consider Monday as the first day of the week, do it on Sunday night. Once you've recorded that week's expenses, checkmark each receipt with a red pen and staple them all together. Place them in the corresponding manila envelope for that month.
Repeat the process until the end of the month. Do not mix receipts from different months.
Once you've done this for a couple of months, you'll see a trend developing in your expenses. If you find that you're actually spending a lot more for food than you want to, take a closer look at your receipts. Maybe you're packing on a few pounds because you bought a whole bunch of ice cream, simply because you had some coupons, or it was on sale.
Big box markets know that you're more likely to eat a large box of some food item almost as quickly as a small box. Don't fall into that trap. You'll find that saving money really comes from eliminating the unnecessary expenditures.
Without a budget, saving money is unlikely. Even if you earn a lot of money, expenditures often grow to meet the supply, if you don't control them. The question you have to ask yourself is whether you want to spend money to enjoy several small gratifications now, or save up for a larger gratification later - say a vacation or a new car?
So, you've managed to create a budget and stick to it, and have even saved a little bit. Don't know what to do with the money you're now saving? Don't have time to learn about the stock market or money market mutual funds? Try putting your windfall into an online savings account. They pay high interest, compared to a regular bank account, usually have no minimum deposit, and are protected by the FDIC, just like a regular bank account. They're also liquid, so you can withdraw your money whenever you need to.
If you want to find out more, read the OSAWatch articles Ing Direct, Emigrant Direct, and HSBC Direct.
Oh and by the way. If you want to save money, instead of buying a copy of some money management software or MS Excel, you can download a free copy of OpenOffice, which has a suite of software including a word processor and an Excel-like spreadsheet program.
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