Saturday, July 21, 2012

Budget friendly living: Plan

Hubby and I do pretty well on a single income. Granted he works in the tech field so he makes more than some, but we still have to budget like crazy to keep things running smoothly. Because hubby is such a wonderful nerd, we operate our household on a fiscal year, from Aug to July, rather than a calendar year. As EOF approaches (end of fiscal) and we set about making our yearly budget, I am reflecting on the ways we save money. I thought maybe I would start sharing some of the strategies we have used over the years that have worked the best. I'll try not to list the commonly cited ones, for example adjusting your thermostat (although we do that too), so you aren't reading the same old tips again.

I started making a list of everything we do and realized that it was WAY too much to handle at once.  So I think maybe I will share them here and there when I am scrambling to get out a new post in a timely manner... Hey, I am being honest here!

So for my FIRST tip:
Before everything, Plan.
Hubby and I are planners by nature and we admittedly take this mantra to the extreme, but having a plan is super important. For everything. Funny, but most of this one ended up about food... Sorry about that :-)

Plan your menu a week or two ahead and make things that use common ingredients. I am notorious for buying a whole quart of buttermilk or opening a carton of chicken stock or a bottle of wine for about 1/2 cup, and then trying desperately not to waste it the day before it is sure to go bad and cooking 1,000 random items just so it doesn't go to waste.  Throwing away food is like throwing away money, so waste as little as possible.

Plan grocery trips for once a week and STICK TO THE LIST to avoid impulse buys. Hubby and I have been slipping on this lately and it shows in our overbudget grocery bill. If you have a REAL list made out from your menu plan, you can really cut down on the time spent in the grocery store, and if you only make one trip a week, you will only be tempted to go off list (and have to resist) once.

Plan your errands and outings so you can do them all at once and in the same area. This saves on time and gas. Just be sure you don't eat out during your string of shopping trips.

Plan on eating your leftovers in your weekly menu, or better yet take them as lunches so you don't have to buy groceries for another meal.  Freeze leftovers to avoid waste if you know you wont eat them in time.

Plan your budget well in advance.  Hubby and I do it yearly, which is pretty weird, but we have been doing it a while and know our spending habits enough to do it that far in advance.  Some people say do it weekly, but I think monthly is the very shortest increment I would advise. That way you aren't tempted to build in splurges, you can plan better for monthly bills like rent/mortgages, and you can start thinking long term about spending and saving.  How do you build a budget? Start off by tracking your spending for a few weeks or months, categorize it, and then figure out how much you need for different things.  This will also show you where you can cut back.  Don't go cold turkey on spending, but adjust it every time you make a new budget until you meet your goals.

Plan for the future.  If you save up a down payment for a house, save up to buy a car in cash, and plan for other large purchases like furniture and appliances, you will save a ton of money in interest.  Don't wait until your dryer dies and then scramble to pay for it.  Keep a budget for replacing large items.  Car paid off? Keep paying yourself the car payment, and then you will have enough in a few years to buy one in cash.  This is a common recommendation, but it is SO important, and most people still don't do it...

Plan for the unexpected.  If you have an emergency, you have to cover it somehow.  Having an emergency category to your budget is critical to saving money, because you will not have to dip in to savings or even worse, borrow.  Get insurance for your car, your property (home owners or renters), your body (health insurance and life insurance), and anything else valuable.  Don't skimp on insurance unless you are starving.  It will come back to bite you! When budgeting for vehicles, make sure to build in maintenance costs so your car doesn't break down.  Take care of your investments so they last longer, and it will cost less in the long run.

Well, that is all I have on my mind today.  I guess this ended up being a lot of silly stuff after all (and I feel ridiculous now that it is all typed out) but I am posting it anyway.  Sigh... :-)

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