Money Makeover Mondays Part I: Start With a Good Foundation
Written by Jessica Swesey of LifeTuner
Just as all beauty makeovers start with a good foundation (and a great haircut, of course!), your money makeover needs a solid leg to stand on. For finances, this means figuring out your monthly budget.
Hey wait! Don't go running away just at the site of the word, budget. It sounds painful, but it's so worth it—just like all the hours you put in at the gym or cleaning the garage. Let's just all say it together once for reassurance: buuuudget. Better, right?
The reality here is that you can't start making changes with your money until you look under the hood and figure out what needs to be changed. Figuring out where your money goes can be a really enlightening experience. We spend how much on cable every month?! I really spend that on coffee and lunch each week?! Sheesh!
Monitoring Your Spending
There are two ways you can keep track of where your money goes every month:
- The old-school way—this is where you literally write down every bill and keep receipts for one month so that you get a working tally of all money going out the door. Don't forget to include a portion of annual or twice-annual payments here.
- The new-school way—this is where you find a free online program to do this for you. The most well-known free site for getting a picture of your finances is Mint.com. The site aggregates all of your banking and brokerage accounts and spits out fun charts and graphs to show you what's going on. In addition, many banks that offer online banking also have platforms where you can see your monthly expenses laid out and get a big picture of where it's all going. (Source: beste Aktien Apps)
So choose your style: old school or new school. It really doesn't matter so long as you gain an accurate understanding of what's coming in and what's going out every month. Once you get that, then you can pull out the scissors and figure out where you can cut or move stuff around.
Making Budget Cuts
I realize this is mostly common sense up to this point. But some of us need a nice kick in the behind sometimes to remind us that making changes really can be this simple.
Need ideas for how to make those budget cuts? Here are three:
- Insurance: Check your deductible. This is the amount that you must pay when you make a claim in order for your coverage to kick in. Generally, the equation goes like this: the higher your deductible, the lower your monthly bill. But keep in mind that if you do raise your deductible, thereby lowering the monthly hit, you will need to have that amount available when it's time to make a claim.
- Everyone's got a cell phone? Snip the landline: This is definitely something to consider if you find that no one in your house is using the landline except to answer those annoying telemarketing and political propaganda calls.
- Meal plan: If you're not already doing this, you will be amazed at how much you can save at the grocery store each week by simply planning your meals ahead. Writing down the week's menu makes it a lot easier to not overbuy and also to reuse ingredients and leftovers for the week.
Got any budget tips that work for you and your family? Share the love!
Part one of a four-part guest post series by Jessica Swesey who is the Managing Editor of LifeTuner.org, a place to get financial tools, tips and direct access to financial experts who answer your questions online.