How to make a budget

You say you know where your money goes and you don’t need it all written down to keep up with it? I issue you this challenge. Keep track of every penny you spend for one month and I do mean every penny.

You will be shocked at what the itty-bitty expenses add up to. Take the total you spent on just one unnecessary item for the month, multiply it by 12 for months in a year and multiply the result by 5 to represent 5 years.

That is how much you could have saved AND drawn interest on in just five years. That, my friend, is the very reason all of us need a budget.

If we can get control of the small expenses that really don’t matter to the overall scheme of our lives, we can enjoy financial success.

The little things really do count. Cutting what you spend on lunch from five dollars a day to three dollars a day on every work day in a five day work week saves $10 a week… $40 a month… $480 a year… $2400 in five years….plus interest.

See what I mean… it really IS the little things and you still eat lunch everyday AND that was only one place to save money in your daily living without doing without one thing you really need. There are a lot of places to cut expenses if you look for them.

Set some specific long term and short term goals. There are no wrong answers here. If it’s important to you, then it’s important period.

If you want to be able to make a down payment on a house, start a college fund for your kids, start an investment stock market account, buy a sports car, take a vacation to Aruba… anything… then that is your goal and your reason to get a handle on your financial situation now.

How to Shop for a Car Loan

Shopping for a car loan requires time spent researching various options. Lets take a look at a few of these options.

Lets assume you are purchasing a new car from a dealership. Odds are before you leave the lot with your new car, you will be escorted into the financial office where you may be asked to sign up with a specific insurance company. While this may save time and, in some instances money, you may wish to shop around and ascertain if there are more affordable rates out there.

Shopping around for the most affordable rate is a good idea. Where do you begin? Call or visit your bank. Ask about their car loans and interest rates. If you have obtained other loans from your bank, they are more inclined to offer you the best rate.

Also, check other banks in your area. They may offer slightly lower rates than your bank and perhaps you can use this lower rate as an incentive to your own bank to work with you.

Another option is to check with finance companies. Keep in mind, however, that their interest rates may be higher due to the fact that they work independently. That is, they borrow money at lower rates and then hike it up to consumers.

Credit unions are another option you can check. If you are a member, you can enjoy reduced rates on loans.

Online websites also offer a wide range of loans and interest rates. However, ensure that the company is legitimate, has a telephone number and address on its website, and is an approved licensed entity. It should be noted that if you do decide to use online websites, you may be inundated with emails and phone calls, particularly if the information you provide is given out to third parties.

Finally, you may wish to consider a home equity loan. There are two benefits using this option. One; the interest rate may be lower, and two; you can deduct the interest on your income tax. Here too, there is a risk - if the mortgage payments cannot be made, the home may be placed in jeopardy. However, with a car loan, the most you can lose is the car.

Maternity Leave: Know Your Rights, but Also Know the Financial Impact

Having a baby is a blessed event, but it also leaves a mother-to-be with a lot of things to think about. She needs to outfit the nursery, buy baby clothes and diapers, pick out a name and much more. And if she is employed, she needs to consider how to handle maternity leave.

As in most countries, United States law gives pregnant women certain rights when it comes to employment. The Family and Medical Leave Act (FMLA) of 1993 governs most aspects of maternity leave. But it's important to realize that the law has a number of limitations.

Under the FMLA, new mothers are entitled to up to twelve weeks of leave. The leave may begin before or when the baby is born. The employer is required to hold the mother's job or a comparable one for her in her absence, as long as she does not exceed the twelve-week time limit.

It's important to remember, however, that these requirements do not apply in all situations. Companies that have less than fifty employees do not have to grant maternity leave. Even in companies that are required to grant leave, the employee must have been with the company continuously for at least a year and have at least 1,250 hours of service.

Another thing that's important to understand about maternity leave is that employers are not required to pay employees while they are out of work. They are only required to continue paying for health insurance. Some employers choose to offer paid maternity leave, but they are under no legal obligation to do so.

Employers can also require those taking maternity leave to use vacation time and sick leave before taking leave under the FMLA. This will result in getting paid for part of your time off, but it will probably also leave you without paid time to use once the leave is over. So if you have to take a day off because you or your baby are sick, you probably will not receive compensation.

Unpaid maternity leave can put a strain on the budget, especially during a time when you are experiencing many new expenses. That's why it's so important to know your employer's policies ahead of time. If you will not be paid during your leave, it's crucial to save up some money to tide you over until you get back to work.

It's important to take the time to recuperate and bond with your baby after his birth. But it's also important to make sure you have enough money to make it during this time. So be sure to study your employer's policies carefully, and if you will not be paid, make sure you have the reserves to make it on a reduced income.

Create a Vacation Budget and Stick to It

Taking a vacation is supposed to help alleviate stress, not add to it. But for those of us who do not have unlimited funds to work with, it can do just that. Planning fun for the whole family and providing for transportation, meals and accommodations can be tricky, and paying for it all can be even trickier.

We all know how important it is to have a household budget. But we tend to forget about budgeting when it comes to vacations. If we can create a vacation budget and follow it closely, it can help us enjoy our getaway without worrying about money.

How Much Can You Afford to Spend?

In order for a vacation budget to work, we must first determine how much we can afford to spend. If you have money set aside in a vacation fund, this might be the easy part. But if you are working with money from general savings or a tax refund, it will require some thought.

Spending every penny you have that is not required for bills on a vacation is not a good idea. Having an emergency fund is important for any family. If you already have plenty of money put away for emergencies and the bills are paid, using your tax refund for a trip is not such a bad thing. Otherwise, take care of the more important stuff before you allocate funds for vacationing.

If you just have a savings account but have not decided how you will use the money, resist the urge to spend it all on a vacation. Setting some money aside for a rainy day will do you a lot more good than hitting all of the hottest spots on your trip. The general rule is to have at least enough money put back to pay all of your expenses for at least three months. If you are nowhere near that point, try to keep enough to at least have a good start toward that.

What to Include in Your Budget

Vacation expenses have a way of sneaking up on us. And that is exactly why a budget is so important. It forces us to consider all possible expenses and account for them so that there are no surprises. Here are the basic expenses you will need to account for:

* Transportation - This could be airfare, bus, or train fare, or gas for a road trip. If you are not taking your own vehicle, you will probably also need to rent a car when you reach your destination. And then there is the gas you will use while you are there.

* Accommodations - Unless you are doing an at-home vacation or staying with a friend or relative, you will have to pay for a place to stay.

* Food - You have to eat while you are on vacation. Some packages include a meal plan, but if yours does not, you will need to budget for your meals. You can save money by taking your own food to prepare if you rent a place with a kitchen.

* Entertainment - This is a biggie. You have to pay to get in to the beach, amusement park, or whatever other attraction you are visiting. But there may be times when you or other family members want to do something else, so be sure to account for that as well.

* Shopping - When most people go on vacation, they come home with souvenirs. So it is important to set aside some money for them.

Money should not be a constant worry when you are on vacation. If you set a budget and stick to it, it does not have to be.

Household Budgeting Plan: Everyone Should Have One

Do you ever feel like the money you earn is just passing through on its way to someone else? A lot of us do. All too often we spend money as quickly as we get it. Some of that money goes toward necessities such as food and shelter, but a goodly portion of it often goes toward unnecessary items.

Whether you can't seem to save up any money for a rainy day or you're having trouble getting the bills paid, a household budget can help. Even if you don't seem to have any money problems, a budget can be of use. Carefully monitoring your spending allows you to save money for retirement, your kids' education, and any other goals you may have.

Creating a Budget

Setting up a budget is not as difficult as it sounds. All you have to do is list and prioritize. It may not be the world's most exciting activity, but it's quick and painless.

The first thing to do when creating a budget is to make a list of all of your monthly income. This includes your pay from work, any self-employment income, and interest and dividends from investments. Some months you may have extra income such as bonuses or tax refunds. And if your work hours vary, your pay will fluctuate. So it's important to figure the amount you have coming in each month.

Once you've listed and totaled your income, it's time to list your expenses. Start with the necessities that are the same each month, such as rent or mortgage, car payments, insurance and loan and credit card payments. Then figure variable expenses such as electricity, groceries and gasoline. You might want to compute an average over several months to use for these figures, use the highest figure you have on record, or estimate.

Last on the list should be discretionary expenses. These are things you can live without such as entertainment, hobbies and collectibles. Use a realistic figure for these items so you can see where you stand.

Add up all of your monthly expenses. Are they more or less than your total monthly income? If they're less, you're off to a good start. If they're more, you have some work to do. Look at your discretionary expenses and see where you can cut back. If you cut them out completely and still come out in the red, see if you can find ways to cut back on your variable necessity expenses. Some ideas include driving less and using coupons.

Once you have your expenses at a manageable level, you should have some extra money left over. If you have loans or credit card balances, consider using that money to pay a little extra on them. Doing so will reduce the amount of interest you pay and get you out of debt faster. Otherwise, the best course of action is to put it into savings or investments. This will help you be prepared if something unexpected happens.

A household budget plan will help you track your expenses and determine where adjustments need to be made. It can put an end to juggling bills and ease financial stress. If you don't have a budget, now is as good of a time as any to make one. 

How to Beat Budget Busters

If you want to have control over your finances, a budget is essential. Knowing exactly how much money you have coming in each month and how much it will take to pay bills, buy the things you need and save a little, is the best way to prevent a financial meltdown. But it only works if you follow it closely.

Sometimes sticking to a budget is easier said than done. Everyone has a lapse every now and then, and while a couple of dollars won't make a huge difference, it can add up when it happens repeatedly. This will throw off your budget, and it could leave you struggling to come up with the money for the things you truly need.

By planning ahead and avoiding impulse buying, we can beat the budget busters. Here are some tips:

* Pack your lunch instead of eating out every day. But don't just slap a sandwich together. If you incorporate some variety into your lunches, you won't be as tempted to indulge in fast food.

* Make your own coffee to take with you instead of stopping at the coffee shop. It's much cheaper to brew it yourself, and a good insulated coffee mug will keep it hot for hours.

* Don't go window shopping. The temptation can be overwhelming, making it hard to come home empty-handed.

* Go to stores only when you need something specific. Make a list and stick to it.

* When going on trips, buy all of the snacks and drinks you'll need at the grocery store and bring them along. Prices are usually much higher at convenience stores.

* If possible, do your shopping without the kids. They have a way of finding something that they just have to have during any shopping trip, and it can be hard to say no. Try to shop while they're in school, or have a friend or family member watch them while you shop.

* Avoid buying things just because they're on sale. Finding things that you need and will use at a discount is wonderful for the budget, but making purchases that will do nothing but collect dust is a waste of money, no matter how good a deal you get.

* Institute a waiting period on non-essential purchases. When you see something you want or feel that you need (other than basic necessities), give yourself a couple of days to mull it over instead of buying right away. Once you've had the chance to think about it, you may find that you didn't really need it after all.

Breaking the budget is an easy thing to do. But getting back on track can be much harder. If you plan ahead and think about purchases before you make them, you can save yourself some money and keep your finances manageable.