Household Budget Tips

If you know where every penny of your money goes and has plenty of spare cash lying around then you’re too rich or too smart.

For the rest of us struggling through budgets and stretching the paycheck to pay off the vast amount of bills, a way to save more money is important. Making that dollar go a long way isn’t a hard thing to do. Here are some practical tips for the penny pinching household.

Add up all your necessities

By this we mean your very basic needs like water, electricity, food and housing. There should be some money left over for the rest of your monthly expenditures. Listing all your basic needs will help you figure out how much you spend for other items

Look for items to cut back on without affecting your basic needs

There are always ways to cut corners when it comes to your household budget. A lot of people spend more than they should and they spend it on their miscellaneous expenses.

Make a grocery list and stick with it

We usually spend too much when we go grocery shopping. Buy in bulk to benefit from the bulk discount. It is generally cheaper to go to the store on Monday because prices are lower.

Check the store with the lowest prices and shop there. Go for the bargain carts. And there are always coupons to collect to get the best discounts possible.

Bring your lunch to work instead of eating out

Save money by not eating out every week but only for special occasions.

Use cash as much as possible

Avoid using your credit cards, unless using plastic will give you a better deal.

Pay off your credit card debts as soon as possible

You can avoid the high interest rates as well as generate some extra income.

Avoid impulse shopping

If you find something you think you need, go home and think about it. Consult your budget and soon that urge to buy that item will pass. More often than not looking at the amount of bills you still need to pay will deter any impulse buying.

Fore go the big name brands when you’re buying clothes

Yes, they may look smashing on you but you could get knock offs at any bargain store. You could even try shopping at garage sales or the Salvation Army.

You would be amazed at the clothes that are available. Because many wealthy people give their clothes away at this thrift stores, you’ll find designer clothes, evening gowns and leather jackets.

Rent a movie instead of going out for a movie

You’ll save on popcorn and soda costs. Or if you are going out for a movie bring your own snacks. The cost of sodas and snacks are 25% higher in movie houses. Plus, homemade popcorn is healthier. You can choose the low fat variety.

Cancel the cable, newspapers and magazine subscriptions

This may cause a blood curdling howl among the kids but try to explain the importance of cutting back on the budget. The whole family could probably live without HBO or Cinemax.

Clean out the attic and have a garage sale

You never know what treasures you may have hidden in those moldy old closets. Try selling your old toys at specialty stores.

Saving money is a creative act in itself

There are many ways to cut corners when it comes to saving money and all you have to do is have the self-discipline to follow through on them. It may take a while for your finances to straighten out but until then a general belt tightening is in order.

Avoiding Financial Black Holes

Have you been saving money incessantly and still find yourself a bit short? Aside from the usual spending on clothes and food there are other necessities that you can cut back on. This may seem the height of cheapness but finding ways to cut back on your basic needs will go a long to way to stretch your limited budget. Here are some ways to cut back on spending on your basic needs.

House

This is probably your largest money black hole. Whether you’re renting or your paying the mortgage, the roof over your head sucks a large percentage of your income. Have you ever considered alternative ways of living?

Utility bills

Paying for your utility bills are a great expense. Save on your heating bills by turning down the thermostat every winter.

In the summer use the drapes to keep the house cool. Adjust the thermostat in rooms that aren’t in use. Why are you paying the money for nothing? Switch to compact fluorescent lighting to save on your energy bills.

Cut down your long distance telephone calls. Choose the right telephone plan and internet service provider for your needs. Do you really need that super speed internet or can you be content with something that is less fast but cheaper? There are many ways to save money on your main utilities.

Decorating

Everyone wants to live in a beautiful house. But you don’t have to go overboard to have an aesthetically pleasing house. Second hand shopping will be your most effective method of having an elegant interior decorating.

You can also look at your old furniture and find ways to make it new again. You can paint that old cabinet and use it as an entertainment center. Your style doesn’t have to be hampered by steep prices.

You can still have that modern living room but without the obscene price tag. Just look for the bargain pieces and be patient in collecting. You may not have your ideal living room in one go.

Appliances

Your large appliance are expensive to repair or replace. Will the energy savings from buying a new refrigerator unit cover the cost of buying a new unit? If you can fix the problem yourself do so. You would be surprised at how many seemingly technical problems are relatively easy to fix.

Before buying a new appliance, you should take into consideration the cost of such a move. Repairing the unit might be cheaper. Take a while on your decision. There’s no rush when it comes to saving money.

Repairs

Calling for the repairman or the plumber can eat a lot into your savings. The cost of the service alone is expensive without even adding the cost of the materials. Ask for references and ask for an estimate. And like going to a doctor, ask for a second opinion.

Don’t settle for cheaper labor. It may not cost you as much but it will when you have to do the repair over again. References are very important.

Teach Your Teen How to Budget

There are several important things teens need to know as they grow up. While some things they have learned the easy way, others they might have to learn the hard way. One of them is budgeting.

Budgeting poses a challenge to everyone, especially to the uninitiated. So it is best that we teach teens the proper ways to budget to minimize the surprises they will get when their bills arrive.

Below are helpful steps on how teens can learn to budget:

• Help your teen child in itemizing expenses every month.
• Make a list of their total income, scholarships and allowances. Include the money they have set aside.
• Subtract the total expenses from their total income.
• If the expenses are higher than that of the total income, teach them on how they can trim down their expenses.
• In their budgeting strategy, let them create a savings account where they can save for future expenses like an apartment, student loan or even a car.

You can do it together in a place comfortable and convenient for you. Make sure they understand why you have to teach them to budget. This will make them debt-free and avoid too much overspending.

If they want to buy something, they have to cut some of their expenses for a month and save some money for the thing they fancy.

Credit Cards for College Kids

Emergencies are bound to arise in your college life. This is inevitable, but that doesn’t mean you have to be unprepared for it. In fact, you should be well aware of one of the things that can aid you during emergencies, especially those that involve cash: credit cards. Yes, that reliable plastic can save you when you’re in deep cash trouble. Ironically, it may also be the cause of your cash troubles.

Should a college freshman apply for a credit card? Are college kids mature enough to handle this responsibility? These two questions are probably plaguing your parents’ minds. A credit card is a quick way to create a long-lasting debt, and that possibility might be what is keeping your parents from allowing you to apply for a credit card.

On a more positive note, though, credit cards can help you establish a credit card history, can assure you of some sort of security, and can teach you a thing or two about independence and maturity.

So which is which? Are you going to apply for a credit card or not? You’re probably bouncing off the walls to hear your parents say yes, but before you immerse yourself in credit card hullabaloos, make sure you are aware of these key points:

• A credit card isn’t free money.
• Each time you swipe your credit card to make a purchase, you are, in effect, borrowing money from the credit card company.
• You eventually have to pay for all the purchases you make.
• Do not charge your credit card for something you know you cannot pay back.
• Delaying the payment for credit card bills increases interest charges so make it a point to pay up on time.

Once you ttake note of these things and you think you’re ready to have your own credit card, then the next thing for you to do is to convince your parents to give you one.

When Your Teen Wants a Car

Your 16-year-old son catches you off guard during dinner: "Dad, I want my own car." You know it’s inevitable, that sooner or later, your son will want to drive his own car. But still, what your teenager just said makes you choke. Will you let him have one? You know that a lot of teenagers own cars, but what good will it do yo your son? When thinking about whether or not your teen should own a car, consider the following points:

What is your child’s motivation?

The first consideration is to know whether your teen needs or wants a car. Does he really need it, or just want one since all his friends have cars? If he goes from school right on to his part-time job, and straight to his soccer practice after work on a daily basis, then giving him a car makes good sense. However, if his primary motivation is to cruise around with friends on Saturday nights, then he doesn’t need a car.

Is he ready?

If you think that your teen is well prepared and responsible enough to drive his own car, then it is OK to buy him one. Create a driving contract between you and your teen. For example, if he violates a traffic rule and gets a ticket, he must agree to pay the cost of the traffic ticket. Your teen should not drink and drive, or even carry alcohol in his car.

Also, your teen must pay for damages he causes to his car not covered by insurance. It must also be his responsibility to keep his car clean all the time, check the oil, refill the gas tank, and so forth. He must also agree that he will always buckle up and never load up more passengers in his car than there are seat belts.

Is it practical for you and your child?

As mentioned, having a car will be very practical for your teen if he is busy with school, work, and extracurricular activities. But, how about you? Will letting him get a car makes your life bliss? You are spending significant amount of time if your teenager’s school is about 30 minutes from home and you have to make two round trips daily. This, of course, does not include the travel time from school to his work and to his soccer practice. Letting him drive could take tons of pressure off your shoulder.

Do you have the money?

If you think buying a car for your teenager will strain your finances and if your child does not have the means to pay for the maintenance of the car, it is best to postpone the purchase. That is, until your financial status improves or until your teenager can buy it himself.

Coping with Financial Stress

Disaster can strike an individual sometimes at a time that he or she didn’t expects it. When it comes to one’s financial status, a disaster can indeed cause a lot of stress. A job layoff, a stock market crash, a house fire, a medical emergency can lead to a financial crises which can bring quite considerable stress. Being able to cope with the stress can help one stay sane and with the feet still standing firmly on the ground.

Prompt Action

The effects of a financial crisis can be immediate. That is why prompt action is needed. There is no need to react to the situation in shock. It will only delay the inevitable and would lead to worse situations. Whenever a financial crisis is to be expected, one should look upon it from a constructive point of view.

One should try to look at what can be done to remedy the situation instead of wallowing in the crisis, seemingly helpless. When one is being laid off from a job, it won’t help the situation by just sitting by and thinking about what happened. The best approach would be to take the opportunity to look for other available employment opportunities out there.

Keep Everyone Involved

In an event of a financial crisis, it would be good to involve the family in terms of finding solutions. Since in a family setting, a financial crisis can affect every member, they should also be called upon to contribute in whatever way they can.

Children can try to help around the house if the parents need to work more hours to cope up with the crisis. They can even take jobs if they are already old enough to do so. It would help getting over the crisis easier, knowing that everyone is doing their best to contribute.

Maintain a Sense of Normalcy

It makes no sense trying to think of the crisis and its effect on life all the time. People should try to detach themselves sometimes from the problems engulfing them just to stay sane. One way to do this is by trying to maintain routines. One can still try to meet up with friends on the usual Saturday to have fun.

Families can still find time to get together and talk regularly, even if it is just on the dining table. Maintaining that routine that one has grown accustomed to even before the crisis can help bring a sense of normalcy into one’s life. It can help prevent getting too overwhelmed by the problems.

Financial Therapy for Money Disorder

After amassing a great deal of fortune from her career, country music sensation Wynonna Judd said in The New York Times interview she threw much of it away, spending ridiculous amount of money at her children out of guilt for not having much quality time with them. She also bought more cars than she needed. Having grown up in an underprivileged family in Appalachia, she said she found herself with "everything and nothing at all."

Money disorders

With the battered American economy, compounded by the inability to manage spending effectively, more and more people are suffering from the so-called "money disorders." Money disorders are those heaps of self-destructive and unhealthy behaviors. While they’re not as extreme as compulsive shopping, kleptomania, or pathological gambling, they nevertheless affect significant numbers of people.

People with money disorders have the following problems: overspending, underspending, serial borrowing, workaholism, financial infidelity (spending without the knowledge of a spouse or a partner), financial enabling (giving huge amount of money to people who are not motivated to fend themselves), financial incest (giving money to relatives to have some control over them), and hoarding.

Workshops, programs, and money rehabs

Judd and many people like her who have money problems can be "treated" by workshops, programs, and money rehabs. In a money rehab, Judd dug really deep into the root cause of her money disorder.

Onsite in Nashville is one of the workshops and programs devoted to treating money disorders. It involves financial counseling and group therapy. Judd attended this program in 2004 and said it helped her transform her self-destructive financial behaviors. She said in an interview, "If I can do it, anyone can. I’m in absolute financial recovery. I live by cash only, by cash budget."

The role of therapists

The American Psychological Association’s (APA) professional code of ethics holds that therapists must not have outside relationships with clients; this includes business arrangements such as financial planning. However, the financial therapy field is still young. Many therapists say that the ethics are still murky when it comes to therapists who are also financial planners.

The role of financial planners

Many financial planners team up with therapists in helping clients who have money problems. This combination can be highly effective. As financial planner Rick Kahler out it, "I’ve never seen clients make progress faster than when they are working with me and a psychologist, preferably in the same meeting."

However, many financial planners don’t see the need to have therapists on their team because therapists have the tendency to give the clients life advice. According to Morris Armstrong, a financial planner based in Danbury, Connecticut, "I don’t necessarily think that everybody needs to have the Dr. Phil of financial planning."