March 2, 2011

If you don't have a budget...

If you don't have a budget... consider your efforts to save an EPIC FAIL. That's right. I said it. I know "epic fail" was on the list of sayings we hope die in 2011, but really. If you don't have a budget, you don't know where your money is going. If you don't know where your money is going, how do you know where you can save? I use Excel to keep track of everything I spend money on. Here's an example of some categories to include in your budget.

Car 1
Car 2
Car Insurance
Cell phone bill
Lady Maintenance

My spending category is eating out, the movies, drinks, etc. whatever I want to spend extra money on that isn't in my budget. I have a budgeted amount I can play with.

Now, let's go through each one and see if/how we can save.
  • House - can you refinance to a lower rate? Can you get different homeowners insurance with the same coverage for a cheaper price? Can you move to a smaller apartment or a cheaper location?
  • Car 1 and/or 2 - can you get a cheaper car? Can you up your payments to get it paid off sooner? Can you refinance?
  • Insurance - Can you get the same coverage with a different company for less? Can you decrease your limits?
  • Gas - Do you HAVE to buy the premium grade gas? Get a Shell Saver Card. It saves 2 cents on every gallon, sometimes up to 10 cents. Hey, money saved is money earned!
  • Electricity - if you're in the GREAT state of Texas (Happy Independence Day Texas!!), you can go to Texas Power To Choose to find the right electric company for you. Pick the cheapest price per kwh for the longest contract and the least/lowest fees. Also, turn the lights off, do laundry one day a week to cut down on too-small loads, and get a programmable thermostat and set it and forget it. Lastly, get energy efficient appliances and make sure that all windows and doors don't let your "bought air" out of the house!
  • Water - well, there's not much you can do about this if you live in a MUD district. BUT you can get low flow toilets, a high efficiency washer, water saving shower heads, etc. Also, make sure you don't waste water while you wash dishes, brush your teeth, or take a shower. One more thing... make sure you don't have any leaks anywhere.
  • Cable/Internet - can you switch to a cheaper provider? Can you do without one or both altogether? Can you get rid of a box or two? (seriously, do your kids NEED the Cartoon Network in their room or does it dumb them down like it does mine?) Can you decrease the # of channels?
  • Groceries - COUPON!
  • Cell phones - can you decrease the minutes? can you decrease the amount of upgrades you have? can you switch to a cheaper company? why do you NEED a $300-600 phone? Um, no. It's for calling and facebooking. You can do that on a free or cheap phone. Come on people. Don't be that guy that can't afford to pay your electric bill but you have a million dollar phone with all the bells and whistles and unlimited data and texting! Ok... I'm off my soap box. Also see if your employer gets a discount with your service provider.
  • Lady maintenance - can you pluck your own brows? I can't either, so, reducing this one is lost on me. I do, however, dye my own hair and only allow myself highlights about 2-3 times a year.
  • Clothes - shop at a resale or consignment shop. Or TJ Maxx, Marshall's, or Ross. Really, you don't NEED $100 jeans.
  • Savings - use SmartyPig. I covered this in my blog, Save Like A Pig.
  • Miscellaneous - when you have an emergency savings fund, you can really reduce the need for this category.
Once you have your total of the payments you'll be making from your checking account each month, total your income and subtract your payments from your expected income. Whatever is left, put it in savings!

And my final advice: Get online banking. Most banks offer online banking which comes with monthly analysis of your spending. DO ONE EVERY MONTH. It really puts your spending into persepective. For instance, I noticed I spend close to $60 on fast food lunch every month. This could either go to savings or one nice meal out for my whole family rather than a few crappy hamburgers!

Let me know if you have any suggestions or tips, too!

Happy budgeting!

Oh... I almost forgot: once you make a budget, make another column next to it and track every time you pay a bill or spend money from a category. Also, set up automatic bill pay. It'll save you time and brainpower when it comes out of your account all on it's own. We ALL can use something that makes our life easier, right?


  1. Spreadsheets are fantastic! One of the things I did to help save money was open a savings account completely separate from my checking account. I use online banking and while having a savings account linked to my checking account it nice, it is next to impossible for me to save money. I opened up a new savings account and turned down the ATM card that came with the account. Instead of the convenience of driving up to the ATM, I have to actually go to the bank to get money out. That doesn't seem like a big deal, but I think a lot longer and harder about whether or not I really need to withdraw any money.

  2. We have had to get creative these last few months with my husbands job being slow...slow as in only worked one week since Christmas! When he was working steadily, we had money automatically going into two savings accounts every week, $25 in one for my daughter, and $175 into ours. We were also contributing 10% to his 401k. So we had a nice cushion for "Just in case," which became a reality. Since Christmas, with only my small income, we have not had to pull ANY money from our savings account! We cut out all unnecessary expenses and only kept what we really needed. For the first time in my life, I began using coupons! My first trip to the store with a handful of coupons, I saved $77!!! We have been humbled and enlightened on ways to save more and really stretch your money as much as possible. We had to buy a washer last week and were actually able to pay cash. I can't stress enough how very important it is to save! Material items are not more important than peace of mind!

  3. Oh yeah, and 3 years ago we purchase a bank owned home that was $30k below appraised value, this is a great way to save ALOT of money! we have a 4 bedroom, 3 bath house for less than it would cost to rent a one bedroom apartment, yes, I am serious.

  4. I love these tips ladies!! Thanks!
    Andria - I also pay less than I could rent a small apartment for since I bought a smaller home. My mortgage is only $818 a month and includes taxes and insurance. I love saving a minimum of $300 on my rent every month just because I bought the house! Renting is such a waste of money.