No matter how much you try to budget and watch your spending, there are always unexpected emergencies that you have to pay for. Whether it’s a broken tail pipe or a emergency trip to the veterinarian, these financial obligations that come out of left field can wreak havoc on your spending plan. That is, of course, unless you follow the 5 budgeting tips in this article.
Even though it seems counterintuitive, you can plan for emergencies. It’s all about saving in specific ways so that you’ll always have a money cushion to rely on. Your “in case of emergency” funds will be there to cover your expenses, no matter what form they come in.
- The first step to saving for emergencies is to track your expenses. You can’t develop a saving plan if you don’t know how much you have to save each month. Begin by writing down all of your expenses. Save your receipts and invest in a personal financial program that will help you track what you spend. Once you take a look at how much of your income is available each month you’ll be able to develop a spending plan.
- If your expenses are very close to, or exceed, your income, then you have some decisions to make. Are there any expenses that you can cut back on in order to make way for savings? Try evaluating your spending so you can cut back on the extras. For example, if you spend $5 at the coffee shop every morning you’ll have $150 by the end of the month for your savings account.
- The next step is to determine how much you’ll save each month. While it’s definitely beneficial to save as much as possible each month, it’s not always possible. Try to set a goal of saving at least 10% of your income to your general savings account. After a few months, you’ll have a nice cushion to rely on. It’s up to you to decide how much you’ll need to save in the long run. Most financial experts advise that you save up three to six months worth of income.
- Make sure that your monthly savings plan includes room for out of the ordinary, but somewhat regular expenses like oil changes and clothes shopping trips. If you can work these expenses into your savings plan in a regular way, they won’t impact your budget as much. For example, if you know that you’ll need to spend $300 every six months on a new work wardrobe, you’ll be able to save just $50 per month and be on track. Although clothes or regular car repairs aren’t technically emergencies, they are expenses that can get your budget off kilter.
- Finally, you need to make sure that your emergency savings is reserved for emergencies only. Avoid the temptation to dip into your savings for non-necessary expenses, like to take advantage of a sale. Saving your money only to blow it all on something you don’t really need is bad money management.
When you follow these five simple steps, you won’t have to worry if you have an emergency. You’ll be able to develop a savings plan from a workable budget and build the cushion that you need when you need it.
What would it mean to your financial picture to have an extra $100 each month in your bank account? You could pay down your high interest credit cards, start a savings account or begin investing. If you saved just $100 per month, that’s an extra $1200 each year. It’s like giving yourself a $1200 raise, without having to negotiate with your boss!
Here are three simple ways that you can start saving $100 or more per month. What are you going to spend all that extra cash on?
1. Brown Bag it!
If you work outside the home, you’ve got a major money drain in the form of your daily lunch. Eating out everyday, even if you try to go the “cheap” route, adds up quickly. For example, if you go to a fast food joint and pay $6 for a value meal, you’re spending $30 per week minimum. Over the course of a month, you’ve thrown away $120 on food that isn’t good for you to begin with. The costs are even higher if you go to a real restaurant for lunch. You could be looking at a savings of $300 or more.
Plan your meals ahead of time and bring your lunch with you to work. You can make extra servings when you prepare dinner the night before, and then you can take the leftovers to work the next day. This way you won’t have to take any extra time to prepare your lunch, and you won’t get tired of eating the same type of lunch each day.
The same goes for coffee or soft drinks. Paying $4 for a latte when a whole gallon of milk only costs $3.50 doesn’t make any sense at all. Bypass the trendy coffee shops and make your own fancy brews at home. If you are used to paying $4 a day on a drink, you’ll save $120 each month by making your own. The same goes for soft drinks. A six pack of most drinks costs $4 at most, or .60 per can. When you purchase a soft drink from a vending machine or restaurant, you’re spending almost twice as much if not more. Bring your own drinks and you’ll save.
2. Read the Fine Print
Do you know exactly how much you are being charged to use your bank’s debit card? How long has it been since you read your phone bill in detail? There are a lot of hidden charges that may drive up the cost of your monthly necessities. Pull out your cellphone bill or bank statement and see if there is anyway to reduce your charges.
Do the same with your credit card companies. Get on the phone and haggle with them if you need to. Many credit card companies will reduce your interest rate if you’ve been a customer with them for a long time. It never hurts to ask, and you may be able to save $100 or more in interest payments.
3. Share a Ride
It’s no secret that gas prices are higher than they’ve ever been, and things don’t look like they’ll be getting better any time soon. If it’s possible, try to arrange a carpool with some of your coworkers who live close by. Take turns riding to work together and you’ll all save on gas costs and car maintenance. For example, if you normally spend $30 per week on gas, you’ll eliminate $90 from your gas budget if you share a carpool with three friends and each of you drives for one week per month.
While there are lots of programs out there to help you with your budget, there are very few designed with the specific needs of women in mind. Here are some money-saving tips that we have found to be helpful in saving money in a woman’s world.
Hair Cuts: While that $50 haircut looks great and makes you feel like a $1000 bucks, the credit card receipt puts a damper on things. Try changing every other cut from your regular salon to a simple hair cut studio and save yourself up to $30 per cut. This could amount to an extra $120 a year in your pocket.
Manicures/Pedicures: While they feel great and look great they don’t last forever. Buy yourself a cheap pumice stone and keep it in the shower for weekly exfoliation. Purchase yourself a nice clear coat polish and recover your manicure the second week to help keep it from chipping. This will make the polish last longer reducing your visits to the salon, saving you anywhere from $30 to $50 a year.
Hair Shampoo’s/Conditioners: High priced products smell great but regularly result in feelings of guilt upon their purchase. Make that high-price shampoo last longer by purchasing a lower priced product at your local retail store and use it every other wash to stretch out the bottles of higher priced products. There are also many great products in your cupboard that are little known but just as effective: beer makes a great shampoo and the barley and hops will soften your hair, olive oil or mayonnaise make very effective moisturizing conditioners, and eggs work well for conditioner on oily hair. Rinse well to remove the smell.
Investments: Due to the male dominated society that most of us grew up, family investment tips were usually passed from father to son and the daughters may not have been taught the same ideas. Learning to pay yourself first and make decisions about your investments are strategies that need to be learned and practiced. Check out investment magazines or websites for saving tips and ideas.
Debt management: If you have already bought too many bottles of that great smelling shampoo, or had a few too many manicures put on your credit cards, consider consulting a debt management company to get back on track. Most companies will help you learn how to lower your current credit card interest rates which will assist you in paying off that debt years faster while giving you tips to help you in the future.
Managing your money does not have to be complicated. Decide what is most important to you and cut out the little unnecessary items that you spend money on. Creating a budget that suits your needs while still allowing you some splurges will help you keep on track. Money isn’t everything in life, but not managing it can cause unneeded stress and worries, making it seem like a bigger problem than it is. Save wisely, spend wisely and you will live better.