Your Personal Finance Budget

Some tips on how to manage money and balance your home budget.

The task of managing your money and balancing your budget is a great one. The following is a list of advice items to help you to this end.

*Write down recurring expenses (rent/mortgage, power bill, water bill, phone bill, car payments) so you can know what your fixed costs are every month.

*Keep all of your bills in a central location so that they cannot be lost or misplaced (falling under the couch or such). Your creditors do not care if your current bill got mixed in with your homework, they want their money and they want it by the due date posted on the bill.

*Pay bills on time! Late bills mean, in most cases, finance charges. These can range from just pennies to percentages of the bill. The money loss is bad enough, let not to mention that late payments can often show up on your credit report and can make it harder for you later on when you go for that first house or next loan.

*Write down your frivolous expenses (that trip to Jack and the Box, that ring you just had to have) OR give yourself a manageable fixed weekly budget and stick to it. This will help you start to see what you spend your money on and perhaps when you see how much you spend you will curb your spur of the moment purchases. If you are going to give yourself a budget it works better if you take the money out in cash so you aren't tempted to just spend a little more.

*Don't be afraid to use coupons or go to discount stores. Too embarrassed? Try it for a month and then compare your discount food bill to your normal food bill, you'll wonder why you used to just throw money away. Stores like Costco where you can buy in bulk are great, but make sure you really will eat 5lbs of Peanut Butter before it goes bad.

*Start saving your receipts from restaurants and bars. Don't get me wrong, going out to eat is a wonderful thing but it adds up very quickly financially (and perhaps around your waistline). You may see that your eating habits take a serious hit out of your paycheck. Perhaps reduce the number of times you go out each month (or weekly as the case may be). An alternative to this is to go out for lunches instead of dinners; this will save you nearly half of your normal restaurant bill (not even including if the place has lunch specials). If you want to go out drinking a lot perhaps go out one night a week but the rest of the time try going during happy hour where drinks and appetizers are often reduced in price.

*Check your subscriptions. Are you getting magazines that go straight from the mailbox to the trashcan? Are you paying for these? If yes, stop that! Why pay for a magazine you aren't reading? Magazine subscriptions can run up into the hundreds of dollars per year per subscription.

*Get involved with investing but do so wisely. Your company's 401K is a great idea, it is usually a bucket of mutual funds. Invest in stocks if you like, but do so only after investigation. Realize that investing is risky, big payoffs often involve big risk. Pay attention to those low risk but consistent pay off investments too. Only invest what you can afford to lose.

*Insurance, find the balance. You can insure your car, your house, your body, your life, your stereo, etc. Keep in mind that an accident can financially ruin you, but so could paying $1000 a month in insurance costs. Decide the balance of coverage you want to peace of mind but know that it hits your pocket book differently.

*See your savings account as a haven, something that you must nourish (deposit) but not manhandle to often (withdrawal). Make sure that "emergency" you are dipping into it for is really that important. Savings can get you through crisis, provide a down payment on a house, and pay your bills when you get laid off before unemployment kicks in, and so on and so on...

* Don't let your spending budget match your income. Realize that unexpected costs and emergencies happen. Your car could break down or you could slip and break your leg. Yes, insurance will often take care of this, eventually. In the short term you may need to come up with some money. If you have followed the above tip (to make your savings a haven) this will not be a problem. This cannot always happen, but make sure to at least leave yourself at least few hundred dollars (or a percentage of your income) as a cushion to help with these unexpected items.

*Plan for larger purchases. Do not buy expensive things on the spur of the moment as you may end up having to either take it back or not pay some other bill, basically in financial trouble. If you want a 35" Sony Flat screen TV, don't just run out and buy it. Shop around to get an idea of the price and if it is something you really want, save a certain amount from each check in order to cover the cost. The amount held really depends on your income, timeline for purchase, and your desire to be sitting in front of that Flat Screen.

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