Frugal Living

Budget Cutting Tips for the New Year

Budget Cutting Tips for the New YearCutting your budget and controlling your expenses is not as hard as it seems.  The key is diligence and pursing it as a priority.  Budget Cutting Tips for the New Year is a great way to get this started.

Budget Cutting Tips for the New Year: A Few Ground Rules

  1. Monitor your expenses for several weeks, journal where your money goes, make a budget (it surprises most people that around 40% of your food budget is spent in restaurants. If you start to track this it will help you identify where it is easiest to cut. Switching to compact florescent bulbs, turning off the lights when you are not in a room, and using plants in the yard that don’t need to be watered all summer start to make real sense. Cutting is almost always easier than increasing how much you make; that 10 or 12 hour day can be a real back breaker. Once the budget is made, post it. It is so tempting to stop tracking your expenses. You’ll be less likely to overspend if you realize how much money has actually gone through your hands.
  2. Create a balance sheet of your debts-household expenses and your income. It is amazing how few households operate with knowledge of how much the electricity or water costs and how much is really left over after the bills are paid.
  3. Determine the amount you can afford to save each month. Have it direct-deposited to your savings account, or to your mutual fund. Wherever you decide to keep your savings, make sure you put money into it every month…There will be a time when that savings will be a life line.
  4. Take out enough cash to last one week at a time. Make up your mind that the cash you have is all you get for discretionary expenses or things that you could live without, each week. It’s much easier to turn down a $60 pair of shoes when it will take the last of your week’s cash than it is when you just have to swipe a credit card.
  5. Make sure you’re not the only member of your household concerned about your budget. If you’re working hard to save money, but your partner is not bought into the process, you’re fighting a losing battle. Sit down together and make a plan to determine how much spending money you should each have. Check in every week to see how well you’re doing. If the entire family shares the responsibility for the budget, everyone can cut back just a little and make a big difference. One person can’t possibly shoulder the entire burden alone.
  6. You can get ahead of credit card debt by identifying the one with the highest interest rate and paying it down first, pay as much as you can on it every month. If you have other cards, pay the minimum balance on those until you’ve paid off the first card. Then, choose the next card and pay extra on it while you pay minimums on the others. Be stingy when you use credit or this will be a very up-hill battle
  7. Your bank or credit union has your statement online, make a habit to look at it regularly.
  8. Create a target list of where you can cut and how much you want to save in each category. Restaurant launches, trips in the car that have a single purpose, bottled water, lights that are burning when no one is in the room-a TV that runs when no one is watching it are all soft targets. Reading the ads for the grocery store before shopping (I regularly get a 35% to 50% discount on groceries) by creating meals around the items on sale. There are ways to cut your living expenses without reducing your lifestyle.
  9. Know your rights…The CARD Act of 2009 severely restricts or prohibits credit card issuers from  raising your interest rate retroactively, charging you over-the-limit fees without first warning you that you’ve reached the end of your credit line, applying your payments to the portion of the bill with the lowest interest rate, charging you a late fee for a payment received before 5 p.m. on the due date, or if they fail to send you your statement at least 21 days before the due date, or jacking up rates on your credit card because you made an unrelated financial misstep (like paying your electric bill late).  You have rights.

Shopping Can Be a Soft Target To Cut Your Budget

  1. Learn the sales cycle at your favorite stores (every six weeks, every Wednesday, etc.). The sales clerk will tell you when the ideal time is to buy, or buy in larger quantity so you can save. Toilet tissue and laundry soap is not going to go bad over the next six months…Never pay list price. Join the buyers’ clubs at your grocery store and they will offer you specials not available to non-club members.
  2. Stock up on grocery staples right after Thanksgiving. Its prime time: More food coupons are issued in November and December than in any other season. Sugar, flower, spices are all at the lowest prices of the year.
  3. Do not make impulse items. Make your own treats.
  4. Check drugstores, warehouse stores, clubs, and dollar stores for great deals on milk, granola bars, cereal, and juice.
  5. Shop liquidation sales.
  6. Hit the swankiest neighborhoods for top bargains on thrift-store goods. Ask what day they put out newly donated items, or stop by early in the week (most people drop off duds on the weekend, and it can take a day or two for them to hit the racks). Thrift stores have sales that may give you as much as 50% off. Use the websites of these organizations to stay informed. This is a great place to buy and repurpose furniture.
  7. Dollar stores can help you save big, but be wary of time-sensitive products like over-the-counter medicines and food.
  8. Don’t buy premixed: You can pay up to 50 percent more for foods with sugar, spices, or sauces already mixed in. Juice in cartons can cost a hefty 60 percent more than frozen concentrate.
  9. If you know a competitor is offering a product you are purchasing as for the sale price of the competitor…Be your own best advocate.

Budget Cutting Tips for the New Year: Additional Sites With Information

Suze Orman: To really save money, do this…

Making a Budget: How to Start a Personal Budget

Tips for Cutting Your Thanksgiving Dinner Budget

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