With the economy getting worse, more and more people have been losing their jobs. As a result, many families are struggling to pay their bills, put gas in their cars, feed or clothe their children. They are just having a difficult time surviving, let alone trying to save money.
There is hope, though. While money problems can never be solved overnight, short of winning the lottery, it is possible to lessen the financial blow by learning how to budget and save money.
Knowing how to budget money will help you make sure you have money for all your monthly necessities as well as enable you to save up for those costly and unexpected surprises. Families across America are learning how to budget and save money, retrenching for the day when their economic circumstances are better. You can learn to do the same.
Budgeting & saving money is a good skill to have. If you're interested in learning how to balance your home budget, we have shown you how to do so in as little as 5-steps.
You want to gather all your receipts from the times you went out to eat, the gas you paid for, the times you went out to the movies - everything. Also, grab all of your bills such as car payments, mortgages, insurance and so forth.
You want to separate all of your receipts and bills into different categories. Categories might include the cable bill, mortgage, car payment, groceries, gas and entertainment. If you have any bills that consist of luxury items, such as a satellite dish instead of basic cable or extensive cell phone packages, then it might be wise to separate those into their own categories.
I would separate each category by month as well. For example, in your entertainment category, you will want your receipts separate for December 2009, January 2010 and February 2010.
Once you have everything separated into different categories, add all the totals up and find out what you spend each month for each category. If you have several months worth of bills and receipts, find the average amount you spend per month for each category.
The reason why you want to do all of this is so you can see where all of your money goes. Are you spending $200 a month on average going to the movies? If you are, do you need to? What about your cell phone; are you spending $150 a month on a phone with tons of bells and whistles? If so, can you do without unlimited text and internet access?
Ultimately, you just want to see where all of you're money is going so you can try to find things that you don't need (or need little of) and can eliminate.
Yes, there is a difference and this is especially true when you don't have a lot of disposable income. This is why you separated all of your receipts and bills into separate categories. You want to find out how reckless you are about spending money.
To put this into perspective, you need electricity, but you don't need to go out to eat at Outback every Friday. You need hot water, but it is not necessary to buy $100 shoes every month. With that in mind, take all of your necessities and add them up.
Now that you know how much money your family has to have each month to live on, you can then plan a budget to reflect that. Remember, you're budgeting & saving money for the tough times. The tough times won't last forever, but you and your family have to cinch your economic belt right now.
The minimum you will want to set aside is the average you calculated that you spend on each category every month (gas, groceries, mortgage, car payment, etc). If possible, I would suggest setting aside a little extra, just to be sure that you'll have enough.
Once you know how much money you will need to set aside, then you can see what you will have left over for extracurricular activities and your savings.
The rest of the money you have left over from your bills can then be divided amongst entertainment, such as going out to eat or the movies. Better yet, you can budget this towards paying off credit cards, or opening a savings account.
Some people will argue that you should always "pay yourself first", aka put money into savings, before you do anything else. I can see merit in that. However, I feel that you have to reward yourself and your family with fun things to do each month.
This doesn't have to be anything elaborate and expensive, but it's a good way to keep everyone happy and positive and together, despite the hardships you might be facing. Just remember that you do need to save money each month, even if it's just a little bit.
Learning how to budget and save your money is one of those skills that takes time develop. This will be especially true if you've never been in a situation where money was a concern.
However, since you never know what life will throw your way, developing an important skill set such as budgeting and saving money is definitely worth your time and effort.