A lot of people live beyond their means. It’s easy to do when you find yourself with a few thousand dollars worth of credit open on a piece of plastic and a mall full of wonderful shinyful things. Or a restaurant full of delicious sounding entrees that would be much easier to order than to prepare yourself. Unfortunately the result is that too often, too many people find themselves living paycheck to paycheck and not a lot of hope of saving for the future. Rising medical costs combined with less coverage leaves too many of us on the brink of disaster. What do I mean by that? No savings and a potential medical emergency forces far too many families into bankruptcy. With a little planning and a little know-how, you can learn tips for budgeting for your household that allows you to put aside a little something for a rainy day.
Tip 1: Assess Your Spending
Track everything. Absolutely everything. Whether you pay with cash, card, check, or buttons and pocket lint. Keep a running record. If you allow yourself a cash “allowance” that you can spend on whatever you want, that’s great. But track those expenses too. They all count. You will be amazed to see how much the morning lattes add up to, or how much those scratch tickets are costing at the end of a month. A lot of times seeing the actual amount written in numbers and black and white can show where you’re bleeding out financially, and you can make adjustments accordingly. By tracking what you’re spending, you can work on budgeting accordingly.
Tip 2: Go on a Debt Diet
Stop using your credit cards unless it is an absolute emergency for one month. Thirty days. It’s harder than you might think, but it can be a valuable way of assessing what is a need versus a want. This means eliminating even the smallest purchases if they aren’t absolutely necessary. So no candy for the kiddos at the checkout of the grocery store. No bottle of soda from the cooler near the register. No zipping to the coffee cart in the middle of your workday to get over the 2 pm slump. It means a month of brown-bagging your lunches. Furthermore, it means filling your thermos with coffee before you leave for work for the day. It means a difficult few weeks, but at the end of it all you should have a pretty good stash of cash that you can put towards savings or paying off debt,
Tip 3: Eat at Home
Even just the occasional pass through the drive-thru to save the hassle of making dinner on a really long day can add up. The average cost of a fast food dinner for a family of 4 is around $28. Compare that to approximately $1-$3 per person to make dinner at home, and you have a pretty big gap in price. Sure, experiences are crucial to quality of life. However, when you are living beyond your means, it is often necessary to forego experiences in favor of better quality of life in terms of less stress and more financial security. Budgeting for food is probably the biggest household expense aside from mortgage payments. When you cut eating out from your expenses, you can greatly reduce your food bills every month.
Tip 4: Cut Extra Expenses
How much is your cable bill every month? Are you still paying for a landline? What about your energy bills? Look at your monthly expenses and start trimming away what you don’t really need. It may be difficult to bear the thought of eliminating cable. However, you’d be surprised at how quickly you get used to not having a hundred channels at your fingertips. Between Netflix and Amazon and all different types of streaming services, you can still have access to your favorite entertainment options without paying cable t.v. prices.
Additionally, you may want to consider getting rid of that old landline. Fewer and fewer households rely on a landline phone anymore, and the reason is that it is providing the same service as a cell phone at an additional price. Another place where you may be able to save some extra cash is on your energy bills. Simply lowering your thermostat one degree will save approximately 3% off your overall bill. Those dollars add up over the course of the colder months and you can potentially save hundreds of dollars in a single winter. If you want to take your energy savings even further, consider switching to energy efficient light bulbs. Turn off lights when you aren’t using them. Only do full loads of laundry and dishes. Start stacking your energy savings and you will be surprised at the difference in your budget.
Additional Budgeting Tips for Households
There are a number of different apps available that you can use to save extra money. Different apps like Ibotta and Checkout 51 offers users rebates on specific items. The key to using these types of apps is that you need to make sure they are items you would buy anyway. If not, you are wasting money. The beauty of these apps is that you are able to combine rebates with coupons in order to save even more. Also checkout Target’s Cartwheel app and consider a RedCard Debit Card. It is different than a credit card in that it works just like your regular bank card, except users get 5% off of all purchases every time they use the card. No interest, no monthly payments, no credit. What’s not to love?
I’m not going to tell you to clip coupons and scour sales ads–though those are other great ways to save money for your family. However, many people find they waste a lot of time looking for coupons they will likely never use. Instead, check sales ads for local stores. Buy pantry items when they are on sale. Purchase meat in bulk if possible and freeze it in smaller portions. Pay attention to sale papers. Most importantly, pay attention to what you’re spending on a daily basis. You will be surprised to see where you are spending the most money. Once you see where most of your expenses are coming from, you can work on changing your habits. Start saving for a rainy day. Budgeting for a household isn’t hard. It’s sticking with the budget that can be tricky.