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Posts Tagged Spending

5 Ways to Save Money During the Holidays

Christmas is just weeks away, but if you’re unprepared, there are still ways to save money this holiday season. It just take a little planning, honestly and self control Here are five ways to cut costs last minute.

1: Make a Budget

Whether you have $100 or $1,000 to spend on the holidays, you need to make a plan on how to spend it. If you don’t, you’ll inevitably overspend in one area or have unplanned expenses pop up and bust your budget. Learn how to set a budget here.

The way you make one for the holidays is exactly like you would for the month. Simply make lines for each person and planned expenses like food, travel, décor and events. Don’t forget stocking stuffers (like I did one year!) Allocate how much you want to spend in each category and shuffle until your budget is spent. If this is your first year making a holiday budget, make sure to have a miscellaneous category for things you might not think of.

Remember to reconcile your budget by either using cash envelopes for each area or tracking your spending in your phone or spreadsheet. A budget doesn’t work unless you follow it.

2: Cull your gift list

At this point, you may realize that you have too many people to gift for and not enough cash. It might be time to decide that you don’t have to spent $5-10 on every neighbor, teacher, coworker and friend.

Remember that gifts aren’t the only way to make someone feel appreciated. For years now, I’ve only gifted to an “elite” list of my family and friends who are closest to me. Everyone else gets handwritten cards, hugs and bags of homemade cookies, chocolate-covered pretzels and other yummy treats. Consumables are always appreciated, especially when made with love.

Don’t give into the temptation to buy cheap or gag gifts. Every woman has enough cheap perfumed lotion sets and probably shoves them into a closet or drawer as she buys herself the lotion she prefers. If you wouldn’t enjoy the item yourself, don’t give it to someone else.

3: Potluck it up

Christmas is about spending time with loved ones, not putting on the perfect Martha Stewart event single handedl, so if you’re feeding more than one person this holiday season, request help with meals. Too often we stress out about making our homes, food and décor perfect (guilty) and it ends up at least partially ruining how much we are able to enjoy the moment.

Tell people what to bring and if someone volunteers to help in the kitchen, hand them a whisk. Enjoy the time cooking with them and reject the stress that comes with trying to do it all yourself.

4: Tone down décor

It can be so tempting to decorate every nook and cranny of your home for the holidays and even easier to spend hundreds of dollars doing it.

Christmas décor is incredibly overpriced and the companies who produce it play completely into it, jacking up prices because they know you’ll be distracted by all the glitter and holiday cheer. It may not feel like it, but adding a few things for you or your home to your cart definitely adds up money-wise.

There are also fairly simple do-it-yourself décor options like holiday pillow covers, ornaments, wreaths and more that can be frugal alternatives to store-bought goods, just be mindful of material costs. Stores that sell trees often give away cutting

s that can be made into garlands, wreaths, tablescapes and more while also making your home smell incredibly Christmas-y.

5: Know when to stop spending

Once you start shopping, it’s hard to stop. We get a natural high when buying and the holidays are the perfect excuse to shop since we are obligated to purchase gifts for other people. Remember what is really valuable about the holiday and stop yourself. Once you’ve hit your budget, it shouldn’t matter if you find the holy grail of presents, you need to stop (or return the other stuff). Holidays are about family and love, not finding the ultimate gift or spending more than another person.

Whatever you do, don’t go into debt for the holidays- you don’t want to start 2018 paying off 2017. It’s okay to have a smaller Christmas you can afford.

 

Your Turn!

  • What is the best gift you’ve ever received?
  • What’s your favorite holiday memory?

Why you need an emergency budget

Money experts have long recommended emergency funds, a money buffer to allow for the unexpected to happen, as one of the most important keys to a healthy money life. This money practice is important, but you also need an emergency budget, a plan to go along with your savings to be best prepared when a crisis strikes.

What happens to your hard-earned savings when an emergency arises and you need to dip into those funds? How do you know how long your money will last? What should you spend it on and what should you stop spending on?

In the middle of a crisis, no one is the best at managing their money. We spend emotionally. We panic. We don’t have the stability and guidelines that our budgets normally provide us.

The Emergency Budget

– your new favorite tool for peace of mind –

Building one is simple and does something that can’t be bought.  It lets you know exactly how much money you need to live off in an emergency situation.

Our regular monthly budgets account for a lot of things: paying bills, putting money in savings, debt repayment (for some), sinking funds, eating out, etc. In an emergency, many of those things won’t have a place in your budget anymore.

By creating an emergency budget NOW, you’ll know the amount of money you really need to survive the month with a roof over your head, clothes on your back and food in your belly.

saving money for emergency

Creating An Emergency Budget

1. Make a copy of your regular monthly budget.

Go through it line by line and cut anything that isn’t absolutely necessary to survival. Rent, electricity, food, car payments, insurance and gas all get to stay. Savings, restaurants, entertainment and “fun” money should all go. Be ruthless.  Read how to make a budget.

2. Add in lines for emergency expenses

Include things that could come up in an emergency situation. If your job covers your family’s medical insurance, COBRA could be a necessary added expense in the case of a job loss. If the potential emergency issue is medical, an increased child care budget may be a need.

3. Total your budget

Fully total your budget out and save it as “My emergency budget.” Put it somewhere safe and update it annually or as your financial situation changes.


You should now have an approximate number of how much money you need for one month. This “bare bones” budget can be used to see how much money you want to save for your fully funded emergency fund or to see how many months your current savings will last.

That number will also give you an idea of how little you need to be bringing in to survive. It is likely much less than your current income and will give you some peace of mind knowing that number when facing a potentially long-term emergency situation.

Doing this now allows hard decisions to be made with a clear head, versus later when you’re in crisis mode.  Armed with an emergency fund and an emergency budget, you will be much better equipped to weather any financial storm.

Your Turn!

  • Do you have an emergency budget in place?
  • Have you ever had an emergency impact your budget?

Save

Save

Determining What You Actually Spend

In 2015, when my husband and I decided that enough was enough and we were ready to take control of our finances, one of our first steps was to determine what we were actually spending. I knew this was going to be scary. We had been spending more than we were earning and because of it, our debt had been increasing.”

What we didn’t know was where that money was going and how much we were actually spending. So it was time to do what I refer to as a “Spending Analysis”.

money leaving hand

 

I gathered up 6 months worth of bank, credit card, and line of credit statements, a few different colors of highlighters, a calculator, and a tall glass of wine and got to work.

How to do a Spending Analysis

  1. Pick Your Color: I first had to determine which highlighter color would represent a different category of my spending. For example, yellow was any food related purchases including dining out, groceries, and those quick trips to the store for a snack or coffee. Blue was designated for fuel purchases. Pink was clothing and kid related expenses (since most of the clothes purchased were for our growing girls), and green was for any miscellaneous purchases (a.k.a. Target, where you are never able to leave with just one thing).

highlight budget

 

  1.  Start Coloring: I carefully went through each statement, highlighting the purchases and debit transactions according to the categories that I had selected initially. As you go through, you may find that there are more categories than you anticipated in which case you add another highlighter or two.
  1. Time to Start Adding It Up: Once my statements were categorized, it was time to begin adding up all of the expenses. For this I would total up all of my food costs (yellow) and divide by that number by 6 (since I was looking at 6 months worth of statements) to determine what my monthly average was. I repeated this for all of my spending categories.

calculate expenses

 

  1. Letting Reality Sink In: When I sat back and stared at the numbers, I quickly realized where the leaks were. We were spending nearly $1000 a month on food for a family of four which seemed higher than it needed to be. More surprising (although not really if I was honest with myself), was the amount that was being spent at Target (darn you Target Dollar Spot!).

Determining where our money was going helped me to see just how much was being wasted by spending $10 here or $20 there. Although they those smaller purchases don’t feel like much at the time, when you add it all up and see in fact how much money is slipping through your fingers, it is an eye-opening experience.

money slipping through fingers

 

This whole process allowed me to see that we really needed to look for ways to cut our spending and consumption.

Your Turn!

  • What are some of your spending weaknesses?
  • What areas of your spending could you cut back on?

 

The Average American

A while ago I wrote a post on being “weird” which was a huge hit and you can check it out here.  I was thinking about what it means to be an average American and started researching some of the numbers.  In particular I was thinking about how a typical American would compare to someone who lived in a Tiny House.   Tomorrow I will write a post on what the average Tiny House person is like to compare.

Average-American-Family-Infographic

how-much-american-save-thumb

Infographic of US Government Budget 2010

Here is a graphical representation on how US tax dollars will be spent in 2010.  Notably is that money to green energy has been increased 92% while nuclear has decreased by 10%.  The largest portion of the budget (62% or 901 Billion), not surprisingly, is going to Defense, this is pretty standard for US spending trends.  National Parks revived a boost of 5%.  Interestingly The Department of State, has also a brand new line item called “Clean Technology Fund” at a half a billion.

Take some time and check it out.  What would you change?  What are your reactions?

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