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Subject: |
Simplify Your Budget |
| Date: |
2009-09-28
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Simplify Your Budget
by Jill Cooper
http://www.LivingOnADime.com
I was just watching a show on
budgeting. I had to chuckle when watching it because the woman
on the show was going into great detail about making charts, tracking
your spending and savings and lots more. Even I, who have a good grip
on my spending, was getting overwhelmed with all the things said a
person needed to do to get out of debt.
She then used one of my favorites,
which is to keep track of every penny you spend. You know, the
"Carry a small notebook in your car and write down every penny you
spend" method. I know this works for some people and please keep using
it if it's working for you, but I often wonder if these people live
real lives or have actually ever really tried their own suggestions.
Let me give you my own personal
experience with the little notebook. I have a notebook in the
car all nice and handy. I load 5 of my 6 grandkids into the car and we
are heading to their house. On the way, I run into the store. I have
things I need to return and then things I need to buy. Two of the
grandkids want to buy something with their own money but one is $.75
short and another $.35 short, so they ask to borrow it from me and
promise to pay me back when we get home.
On the way out of the store, we walk
past the bubble gum machines and so, of course, being a proper
"Nana", I start passing out the quarters for gum. Two of the quarters
disappear into a machine that fails to spit out the gum, so I have to
find two more quarters and calm the two distraught children.
Finally, we make it out the door and
head for the car. I quickly make sure each child is holding
someone's hand so they won't get flattened crossing the parking lot.
It's a frantic journey to the car as kids drop their new gum, leftover
change and a package or two along the way.
Then we all climb in the car and
wrestle with car seats, seat belts and, most importantly, who gets to
sit where and by whom.
Yes, the car is hot and everybody's
tired, but despite that I say, "Just a minute-- I have to write down
what I just spent." Suddenly, we are looking for the little
notebook; on the floor, in the seat, on the dashboard. At last, we find
it, stuck in between the seats under the youngest child's car seat.
After tugging and pulling, pushing and shoving, buckling and
unbuckling, we have the notebook. Now where is that pencil? Ah, easy
find. It's under the trash can on the floor.
"Let's see, now what did I buy again?
Where's the receipt? Do I add the money I got back on my returned item
or deduct it from my credit card bill? Do I call the $.75 and $.35 a
loan and write it down until it is returned or just write it down?????"
"Yessss. I know you are hot, I know
you are hungry; I know you are tired..."
These methods might work well for some
people, but my life is complicated enough without adding more.
At times, my whole day is like the above story, so I have so many more
important ways to spend my time than constantly searching for a
notebook or writing on a chart.
What does a person do?
I once worked for a man who had a major problem controlling his
spending. Here's what finally helped him: Every Monday morning
he put a $20 bill in his wallet. That twenty was all the money he
allowed himself to spend for the whole week. It was his lunch money,
pop money and, if he saw something at a store he really wanted, he had
to buy it with his twenty or do without it.
This made him go home and think about
the thing he wanted. Did really need it? Was it really worth it?
Half the time, just having to drive back to the store was enough to
deter him from buying it.
He even found himself making a game of
it challenging himself to see how much of the twenty he could
still have left at the end of the week. He started saving the extra
money to use for something bigger and more special that he wanted.
Often, after he had a nice chunk added up, he decided to just apply it
to a bill. Watching that bill slowly go down told him he was winning
the game.
If you have tried other ways
unsuccessfully, you might try the twenty dollar bill idea. --Oh,
and it doesn't have to be a twenty. Depending on your circumstances and
where you live, it could be more or less, but pick an amount and stick
to it. It may take a week or two to figure out how much you want to
allow yourself but, after that, use a set amount and that amount only
for your miscellaneous spending money.
With this system, if you spend it all
by Wednesday, too bad! You will have to eke by the rest of the
week and, if you aren't already bringing your lunch to work or finding
other ways to save, you will find yourself starting to do it just so
you can save more of your "twenty".
What I like even better about this
idea is, at the end of the week or month, instead of having a
huge column of little piddly things to add to your ledger, you only
have to make one entry for the twenty for each week.
I did find it interesting that at the
end of the show, after presenting all of these complex suggestions, the
woman was asked "What do you do if your house payment is more than you
can afford and you are deep in debt?" She paused with a strange blank
look on her face and said, "There are only two things you really can
do-- earn more or spend less."
That's it in a nut shell. We
can make charts and write lists but the bottom line is, we simply need
to either stop spending or start earning more.
Too often, we focus on learning how to
get out of debt with the misconception that, simply by learning, we are
doing something about our problem rather than focusing on
getting out of debt by actually
stopping our spending.
Often, we want to know how to save on
the large amount of groceries we buy, never thinking that we could save
a lot simply by not buying so much. Or, here's one that I love:
"My husband lost his job, so how do I save on our vacation?" I don't
know how to say this gently but, if you don't have a job or you had a
pay cut and don't have enough money, you don't take a vacation, play
golf, buy new things to fix the house, put your kids in sports, throw
expensive birthday parties, keep buying junk food or convince yourself
that you really need to keep your cable and Internet to help you find a
job.
There is one way and one way only to
get out of debt and that is to spend a lot less than you make.
The more desperate your situation, the more drastically you have to
reduce your spending. Some of you may have to go from having your hair,
nails and toes done once a month to only having your hair done. If
things are really tight, maybe you can't pay to have anything done most
of the time. You may have to learn to share only one car. You might
have to start walking or taking the bus. Whatever you need to do to pa
it off, get serious and do it.
Key words for today's lesson. Stop
spending or start earning more.
Jill Cooper and Tawra Kellam are frugal living
experts and the authors of the Dining On A Dime Cookbook. Dining On A
Dime will help you save money on groceries and get out of debt, by
cooking quick and simple homemade meals. For free tips & recipes
visit http://www.LivingOnADime.com. Permission granted for use on
DrLaura.com.
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