Budgeting 101

Budgeting 101

By: Maureen Callahan
Budgeting made easy.

Buying special software and workbooks can help you budget for everything from groceries to entertainment, but these five strategies will let you do-it-yourself for free.

1. Make a running list of what you spend for one month. Include these categories: food, gas, mortgage/rent, utilities, miscellaneous (entertainment, dinners out, clothing, personal care items, tuition.) Save receipts. Write down every single penny you spend.
2. Document all annual expenses. Auto insurance, home insurance, medical costs (prescriptions, doctor visits, health insurance), planned vacations, and savings. Divide these expenses by twelve. This is the amount you will need to set aside monthly for annual items.
3. Set up a basic budget worksheet. At the top of the page list monthly spendable income; that’s your gross income minus taxes and automatic payroll deductions. Underneath, line by line, list each monthly expense from steps one and two. Next, add up monthly expenses and subtract them from your spendable income. If there’s a surplus, good. Tuck it away in savings. If the balance is negative, look back to your running list and figure out where to make cuts. Three good places to cut: the food budget, annual items (travel) or the miscellaneous category.
4. Put aside money every month for savings and emergencies. If you’re paid weekly or bi-weekly stash the extra checks (it will be either two or four each year) into savings. If you’re paid monthly, allot money to savings using your budget worksheet.
5. Revise your worksheet. Expenses change and so do spending habits. Refer to your budget worksheet frequently to see where you can pinch more pennies, particularly at the supermarket. If necessary, repeat step one periodically so that you don’t lose track of where your money goes.

More Supermarket Savings Tricks

• Double up on coupons. It’s perfectly legal to use a store coupon and a manufacturer’s coupon at the same time.
• Leave brand loyalty at the door. You’ll net better savings with store brands or sale items. One exception: buy name brands when they’re on sale for less than store brands.
• Buy fruits and veggies when they’re in season. Not only does local produce taste better, but it’s usually much cheaper than items shipped from other parts of the world.
• Take a quick inventory of your cart before hitting the check out. Remove impulse items. Do you really need that giant bag of chips? The candy? It’s easy to pick up items you want (but don’t really need) as you wander store aisles.
• Pay attention to prices of items you routinely buy in every store you frequent. Keep a mental tab (or write it down) so you’ll know who has the best prices.
• Bring sale circulars from other stores to a supermarket that matches sale prices. That way you can do all your shopping in one place yet net all the best prices.