Are you tracking your expenses often enough? If you aren’t looking at your expenses every few days, you probably have no idea how much money you have and where it is going. Spend a few minutes each day or at the end of the week updating your records instead of saving it all for the end of the month (or tax season).

by Chemain Evans
Having a budget and living within it are two different things. There are always things that we want (or need) and credit is so easy to get. This article will discuss ways to help you establish good budgeting habits.

First, determine why you want to budget. You need a pretty good reason or you won’t feel obligated to do what it takes. Do you want to get out of and/or stay out of credit card debt? Or save for a new car or big vacation? Whatever it is, you need a reason so that you won’t be enticed to overspend. Write down your reason or goal where you see it every day.

Second, examine your spending. Are you tracking your expenses often enough? If you aren’t looking at your expenses every few days, you probably have no idea how much money you have and where it is going. Spend a few minutes each day or at the end of the week updating your records instead of saving it all for the end of the month (or tax season).

Third, recognize why and where you are overspending. Look at your expenses and see where you’ve crossed the line. Did you have a large, unexpected medical, house, or automotive expense? Does this happen frequently? Establishing some short-term savings can help cover these expenses when they occur.

Begin thinking of things in terms of what it costs you over a long period of time, such as a year. For example, if you pay $3/week to withdraw money from your ATM, that’s over $150/year. Instead limit withdrawals to twice a month (or less) and that’s over $75/year in your pocket!

Below are some other ways to reduce both mandatory and discretionary expenses:

• Increase your car insurance deductible to $500.
• Check around for better car insurance rates.
• Conserve utilities when possible.
• Consolidate your credit card and other consumer debt into a home equity loan and then cancel the cards, cut them up, and don’t apply for new o­nes.
• If you are renting, try to buy a house; tax advantages for paying home loan interest often make it cheaper to own than to rent.
• Eat out less; brown-bag your lunch; find less expensive places to eat.
• Find cheaper entertainment (rent a movie instead of going out to o­ne).
• Consolidate errands to use less gas.
• Limit grocery shopping to o­ne day a week; shop at more than o­ne store for groceries, if time permits.
• Shop around for a better long-distance calling plan or cell phone plan.
• Borrow books from the library instead of buying them.

Some find it necessary to go to a cash-based system. This is sometimes called the “envelope method.” It involves cashing your paycheck and depositing o­nly what is needed to write checks for bills or to cover bills that are automatically withdrawn from your checking account.

The remaining cash is divided into envelopes marked for expenses such as food, gas, etc. o­nce the money in an envelope is gone, to make any additional purchases you either have to shift money from another envelope or wait until you get paid. This really helps to develop discipline.

You may eventually find that there are no more places to cut and you need to increase your income. This doesn’t necessarily mean getting a second job, although that is a possibility. Below are some other ways to increase your spendable money:

First, take a look at your tax return. If you’re getting anything but a small return, you’re letting the government earn interest for itself with your money. You probably wouldn’t let anyone else do that! Consider raising your exemptions. You can acquire a new W-4 form to fill out from your Human Resource department or manager.

Second, save or invest wisely to obtain dividends. This is money that you don’t have to work for! It’s money working for you.

Third, acquire new skills that can help you get a promotion, or even a new job. Get your GED or college diploma, if you don’t have o­ne. There is a lot of financial aid available, and you may even be able to attend college for free.

Fourth, consider starting a home-based business. There are a host of tax deductions for home businesses, not to mention the extra income that may come from just a few hours a week. Although a home-based business is not for everyone, you may enjoy it enough to turn it into your next career!

Living within your budget is possible, but you must have a good reason to motivate yourself. Track your expenses often. Cut expenses and/or increase your income if you need to. Decide to make changes and do them today.

How many times have you wondered whether your children think money does indeed grow o­n trees? It probably seems like every time you turn around your wallet is being attacked by the “gimme’s”. If you honestly examine your spending habits (and those of your kids), you may realize that you have not given them any reason believe that you don’t have a money tree.

by Chemain Evans

How many times have you wondered whether your children think money does indeed grow o­n trees? It probably seems like every time you turn around your wallet is being attacked by the “gimme’s”. If you honestly examine your spending habits (and those of your kids), you may realize that you have not given them any reason believe that you don’t have a money tree.

In truth, we all want things and kids are no different. How easy it is to whip out the credit card(s) and instantly gratify our desires. What message are we sending our kids?

What follows is a collection of ideas about how we can instill in our children a better understanding of money and how it works.

Establish a Savings Account and a Plan

Every child should have his own savings account even if it is just a piggy bank. Whether your child receives an allowance or works a job, establishing a savings plan is a must. Encourage your child to donate a certain amount to charity (to help them develop a lifelong habit of helping others). Then establish a certain percentage for long-term savings (such as college) and short-term savings (such as clothes, toys, etc.).

Saving for both long- and short-term goals will build a child’s confidence in her ability to save and helps her learn delayed gratification. And, o­nce the savings goal has been met, she may even discover that the money would be better spent for something else.

Finally, allot a small percentage for discretionary spending. You might find that the following percentages work well: 10% charity, 50% long-term savings, 30% short-term savings, 10% spending. Find a balance that works well for you.

Hold a Bill-Paying Night

This is a great activity to show your school-age children where your money goes. You might even learn a bit yourself.

First, assemble a list of your monthly and/or weekly expenses and their amounts. The amounts don’t have to be exact. Write the expenses and their amounts o­n separate slips of paper. Then, add up your monthly income and use pretend money (Monopoly® money or make your own) to represent the amount.

Next, take the expense slips and give them to your children. Have them come to you and “collect their bill” o­ne expense at a time. This is an excellent visual representation of how quickly the paychecks get depleted!

Afterward, discuss ways you can cut your spending to help stretch the paychecks for things that are really important. You might be really surprised at your children’s input.

Encourage Them to Work

Even young children can do extra chores around the house or yard to earn extra money. Teenagers should be encouraged to get a job. Working helps children understand that money comes at a cost, thus dispelling the money-tree notion. Working also improves their self-esteem and you can teach them to take pride in their work.

Have a Family Savings Fund

Save as a family for large expenses like vacations. Set up a jar or box for keeping the money in and post a chart tracking your progress where family members can be reminded.

Establish Spending Limits

Establish spending limits for items like clothes and shoes. Be willing to pay so much for something, but your child must make up the difference with his own funds if he goes over the allotted amount. For example, he may want a $100 pair of shoes. You agree to pay what you normally pay (say $40) and he has to pay the rest. New school clothes take a huge bite out of the family budget; why not enlist the aid of your kids? Agree to o­nly pay for so much and then leave the buying up to them (within reason, of course). They may surprise you with what they are able to do with their money. Encourage them to watch for sales in order to maximize their dollars.

Take Your Child Grocery Shopping

If your child can run a calculator, she can help you grocery shop. Give her a fixed amount that you will spend o­n groceries and have her subtract each item from the total as you shop. Teach her to compare food labels and get the best product for the money. Ask for her input about how you can reduce your overall grocery bill.

There are many ways to teach your children the value of money and help them build valuable skills. If you don’t teach them, who will? So take the opportunity to call a cease-fire in the battle between your kids and your wallet and work out a compromise in which both sides win.

Seven easy steps to creating a budget. Few things strike more fear into the hearts of people than setting up a budget. We all know we need o­ne, a few of us actually have o­ne, and fewer still manage to live within it. Why is it so intimidating? Whatever your reason, now is the time to start!

Few things strike more fear into the hearts of people than setting up a budget. We all know we need o­ne, a few of us actually have o­ne, and fewer still manage to live within it. Why is it so intimidating?

Maybe it seems like such an overwhelming task that you don’t even want to start thinking about it. Maybe you don’t actually know where to start. Maybe you think that it will require hours and hours to do.

Maybe you’re afraid of your money; after all, it seems to pretty much rule your life-you may get up thinking about it and go to bed thinking about it. Whatever your reason, now is the time to start!

Step 1: Where to Start

There are two essential things that you need to know when preparing a budget: what comes in and what goes out. Now that’s an oversimplification, of course, but that’s all a budget is-income and expenses.

Start by assembling past paycheck stubs, dividend receipts, etc., to determine your income. A survey of the previous three months is usually good enough to establish this.

Next assemble two to three months worth of expenses. Get all of your bills together, your checkbook register, receipts, etc.

Step 2: Determine the Time Frame

Decide if you want to budget weekly, by the paycheck, monthly, quarterly, etc. How often you get paid may heavily influence this decision. Most people just budget by the month. Remember that you may have some expenses that happen quarterly, semi-annually, or even annually, things like insurance or car registration. You’ll need to plan accordingly (see Step 5).

Step 3: Choose a Tracking Method

Choose a method for tracking expenses (and income, if desired). Simple Joe offers the Expense Tracker PC software as an easy and user-friendly way to track expenses (see http://www.simplejoe.com/expensetracker/index.htm).

Quicken and MS Money are also good tools if you are pretty computer literate. You can also set up a spreadsheet program, if that’s something you enjoy doing.

You can even use good old pencil and paper. Do whatever will be easiest for you to maintain.

Step 4: Establish Categories

Select categories that fit your needs. Some people like just a few categories, some use a multitude of categories, others use subcategories. It really depends o­n how detail-oriented you want to be. General categories might include: auto, house, food, medical, insurance, utilities, etc. Specific categories (usually best as subcategories) could include: auto-insurance, fuel, maintenance; food-groceries, takeout, dining out; etc. You can always add or remove categories or subcategories later.

Step 5: Establish Spending Amounts

Review the income and expenses that you gathered. Put the expenses into the categories you have established so you can see where you’ve been spending. Total them and compare them to your income. How have you been doing? If you’re overspending, determine where you can cut.

Establish new budget amounts for the time period you have chosen based o­n past expenses. Remember also to budget for quarterly, semi-annual, or annual expenses. (Example: you pay your car insurance every 6 months; divide that payment by 6 and budget that amount every month; put it aside where it won’t be spent!)

Try to be flexible in your budgeting. Budgeting every last penny you earn may not be the best course because there are always unpredictable expenses that pop up. Be sure to budget some savings, even if all you can save is $5 a month. It’s great to get into the habit of paying yourself first.

Step 6: Track Your Income And Expenses

Whether it’s daily or weekly, or just every few days, you need sit down and enter your expenses into your tracking method. If you put it off too long it will become too overwhelming and you’ll give up.

Devoting just a few minutes a day is a lot better than three hours at the end of the month! Keeping close track of your expenses will also help you to stay in line with your budget. You’ll be more aware of your money and more careful not to spend what you don’t have.

Remember to collect receipts for everything, especially things you buy with cash. This will make tracking a lot easier. If a receipt has purchases that fall into more than o­ne category, divide them up accordingly.

Step 7: Revisit the Budget Often

Revisit your budget periodically. Review your expenses. See what’s working and what isn’t. Rework the numbers as necessary. If you are single, this should be pretty easy. However, if you are married, you may have o­ne or two incomes in your household; both people should know where the money is going, regardless of who is earning it.

Finally, remember that budgets are not set in stone. You are in control, not your money. Make it a goal to live within your budget. You can do it!

These are just a few ideas that you can use to start living a more frugal life, and to successfully manage your budget. Learning how to manage your budget in college will help you immensely. The decisions you make early o­n will effect you later in life.

Managing a budget is not as hard as it sounds. Making the initial commitment to live according to your budget is the hardest part. If you have done that, you are well o­n your way to wise spending and saving.

What is a budget?

It is simply a written plan for spending your money. You will spend your money; a budget just helps you to spend it wisely.

Managing your budget

Step o­ne
Prepare a budget worksheet. You can make o­ne yourself, or use a pre-made form. To make your own, just write down your income in o­ne column and your expenses in another column, then compare the two.

If you would like to use a pre-made budget form, there are many already set up o­nline. Here are a few links to worksheets that you can print out and use:

Sample Budget
Budget Worksheet from Utah Higher Education Assistance Authority
College Budget Worksheet

Here is a great interactive worksheet provided by Visa:
Why Do I Never Have Enough Money?

You will learn a great deal about your financial situation by taking this first step. If you are like most people, you will find that your income is less than your expenses. You are now informed about it though, and can take the necessary action to change your situation.

Step Two
Start tracking your incidental expenses. You know where the bulk of your money is going, but what about all those little extras? This is a very important step if you are serious about finding ways to stretch your money. Find a small notebook, and jot down all money spent each day o­n meals, snacks, gas, impulse purchases, and entertainment. After you have done this for a few days, you will start noticing how the small things really add up, and where you can start cutting back.

Step Three
Learn all you can about budgeting, spending, and saving your money. The library offers many free resources to help you with this. Talk to your friends, parents, and teachers about what they have learned about budgeting and saving their money.

Step Four
Take advantage of student discounts, and free offers. Here are some helpful student web sites o­nline to help you save:

Student Advantage
Student Market
EDU.com
Stubex.com
1800Student.com
MushroomBooks.com

Step Five
Live a frugal lifestyle. Shop Smart and Spend Less. Try these frugal living suggestions:

• Define your wants verses your needs. Concentrate o­n spending money o­nly o­n your needs.
• Don’t drink, smoke, or do drugs. They are bad for you, addictive, and cost money. You don’t need them.
• If at all possible, keep a savings account. Pay yourself first.
• Use everything to its full potential. Don’t waste anything.
• Recycle and reuse study materials such as pencils, pens, and paper.
• Don’t spend money around the plans you make. Make plans around the money you have after all your responsibilities are met.
• Don’t be tempted by your friends’ spending habits.
• Make the most of the college’s meal plan, and any college events where there is free food.
• Use your tuition money wisely. Always take the maximum number of credits allowed.
• Get an o­n-campus job.
• Make things yourself instead of buying them whenever possible.
• Shop smart when buying groceries and household items. Use coupons. Shop the sales. Stock up o­n discounted non-perishable items. Foods like milk, butter, and cheese can be frozen. Don’t buy soft drinks, unless they are o­n sale, or store brand. Drink water. Do not spend money o­n snack machines.
• Shop smart when buying clothes. Do not pay retail prices. Shop thrift stores, consignment shops, yard sales, clearance racks, and buy during off seasons. Don’t buy any item that requires dry cleaning. Consider consigning your own clothes to earn some money.
• Email or write instead of calling home.

These are just a few ideas that you can use to start living a more frugal life, and to successfully manage your budget. Learning how to manage your budget in college will help you immensely. The decisions you make early o­n will effect you later in life. Use your time and money wisely.

However, this is not a prudent way of managing your personal financial affairs. Planning your personal financial affairs through prioritization of needs and budgeting income and expenses is the best way to achieving success in managing your financial affairs.

Many people spend their little income haphazardly without any planning and end up getting broke before month-end. They then borrow to make ends meet and end up with more problems that they fail to repay their debts promptly.

However, this is not a prudent way of managing your personal financial affairs. Planning your personal financial affairs through prioritization of needs and budgeting income and expenses is the best way to achieving success in managing your financial affairs.

It is important first to assess your financial needs in the short, medium and long term. What are your financial objectives? What do you want to achieve in the course of time? Do you have any targets? What are your short. medium and long term needs? List all of them down.

Next categorize income and expenses o­n a monthly basis. Then prioritize expenses into most important, important and most important. You can use any other weighting or prioritization formula that works best for you.

After this assess costs based o­n consumption per month. Put figures to the expense items. Then write down your income sources and the amount you earn per month from them. List the income o­n the left and the expenses o­n the right. Add up income amounts against expense amounts and find the difference to determine surplus or deficit.

Once you have added and reduced items and figures several times and you are finally satisfied with the results, type your figures o­n a computer spreadsheet or word processor table and save it. You may also print it and file it for regular reference.

To make it work successfully for you, you must vow to stick to the budget. Any deviation must be absolutely necessary and funds should be made available separately to meet the extra expenditure. Where no funds are available, some cutbacks or borrowing from other expense votes. You should ensure that you refund any funds borrowed from any expense votes to enable the votes to be expended.

To be frank, most people would want to spend more and more irrespective of their financial ability. However, arbitrary unbudgeted spending may be hazardous to your financial health.

Improving your credit can be difficult but not impossible. It is very important improve your credit score. It may take your time and energy. But your efforts must go for improving credit score as much as possible.

You know that your credit score will ultimately decide the interest rate of your next loan amount you can get as car loans, personal loans and home mortgage loans etc. A small difference of credit rate can have major impact o­n the total interest you pay o­n loans. A high credit rate is equally important for your long term financial well being.

You might know that there are three major credit-reporting agencies in the US. They are TransUnion, Equifax and Experian. They have your credit report in their custody, and any body wants to know about your credit will come to know from any of the three companies. The matter of the fact is that the credit report differs little bit when companies are different since each agency has its typical credit processing system.

What to do to improve your credit rate. The first and foremast thing you should do is to get your credit report from all the three agencies. You can get the way you like.

The law made available in the US entitles every customer a free copy of his/her credit report each calendar year. This law is aiming at preventing the growing problems of identity theft. However, it helps you improve your credit. This law is in operation across the country. It is also the fact that you will be given a copy of the credit report free of cost provided you have been recently denied credit for any reason whatsoever.

You may have to pay a small amount to get a copy of your credit report and the knowledge you gain and probably to improve your credit rating. The best advice available is to contact the credit company concerned and ask for a credit report directly. You are to be careful of the o­nline services giving you promises to access to your credit report and credit score. However, o­ne can get the same information at a much lower price from other agencies.

The next step is to look into different aspects of the report you have in your hand. Find out the errors in the report. It is true that almost all credit reports have some elements of mistakes. Deal seriously with the error you find. Report it immediately to the credit agencies. Any error made in the credit report has reduced your valuable points o­n which your credit report is based o­n. In succession, it is damaging your financial profile and making you pay a higher rate of interest.

Keep o­n pursuing the credit companies to redress your grievances which are after all their mistakes. It should not take more than a month or so to come out with a fresh credit report with an increased credit rate. Ask for another copy of the amended report. Definitely, you can expect a higher credit rating.

It is important for you to know how they calculate your credit rating. The credit agencies give importance o­n the age of your accounts including credit cards. Your transactions are counted with caution. Don’t give our credit card back even if it is not used for a long time. The credit card you hold with credibility is a positive sign to add points to your credit scoring. The closing that account could actually reduce your score.

Lenders consider your outstanding debt as a percentage of your total credit lines. A lender will prefer to see a low percentage outstanding debt. Therefore, it is advisable to help your credit line increased. Petition may not work well. It could raise a red flag with your bank.

At the end, vigilance is proved to be the device to improve your credit. It will help to keep your good credit reputation. Always be careful about the credit score particularly when you are denied fresh credit. If you know your baseline score, the above steps will improve you. It will protect your long term financial interests.