Budgeting Articles
Where does all the money go? We've got tips and insights to help you figure it out. Create a monthly expense plan, stretch out your food stamps, calculate moving expenses, and more.
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Article / Updated 08-03-2023
Shopping can often feel like a black hole on your finances. Money goes in and disappears into a vacuum. Every time you step into a grocery store or discount department store, you may feel like you’re out of control and you come out flat broke. To prevent your shopping trips from turning into guilt trips, take time to think about how you can spend more thoughtfully. Save by reducing and reusing When considering a purchase, always keep the following in mind: Reduce, reuse, and recycle. Ask yourself these questions: Do you really need it? Do you already own or have access to something that you can use instead? Try to reduce your purchase of processed, prepackaged foods. The more packaging and processing involved, the more the food costs you. By reducing your purchase of packaged and processed items, you save money and resources. Prepackaged groceries generally cost at least twice as much as whole foods, often multiple times more. Also try to buy whole foods in their natural state whenever possible: fresh fruit, vegetables, meat, and dairy products. Yes, cooking is required, but cooking doesn’t have to be drudgery. Sharing a home-cooked meal brings people together, saves money, and can be much healthier than the alternatives. You can reduce trash and save money by minimizing your use of paper towels, disposable plates, and cups. Instead, reuse cloth towels and napkins and use durable dishes because you can wash and reuse these again and again. Go for permanent or reusable over disposable every time possible. Take your shopping bags with you to the grocery store. Many stores credit you 5 cents per bag for bringing your own or charge you if you don’t. You’re not only saving money but also saving landfills. Over the course of a year, simply reusing shopping bags, napkins, plates, and cups can save you $40 to $60. Just think of how many other items you can apply this concept to. If you can cut costs without cutting your lifestyle, why not? Use your money in other ways that give you more enjoyment and satisfaction. Tips for keeping expenses down The following are some other ways to keep your shopping expenses at a minimum: Use a shopping list and purchase only the items on your list. Organize your list based on the layout of your store and stick to the outer walls where all the healthy options are. By following this guideline, you can begin to better plan your expenditures. And if you stick to your list and a routine, you can eliminate those nasty impulse purchases. Don’t go grocery shopping when you’re hungry. People typically spend more and buy more processed — and, therefore, more expensive — food when they’re hungry. Buy merchandise when it’s going out of season. Buy next year’s winter coat or swimsuit when the prices are dirt cheap instead of at the beginning of the season, when the item’s not on sale. And when you’re shopping for clothes, buy wash-and-wear clothes rather than dry-clean only. Buy second-hand. eBay and Craigslist have changed the landscape of shopping for pre-owned items. Before you buy something, check online first to see whether a pre-owned version is available. You can also find treasures at thrift stores and garage sales. Shop at discount stores. Deep-discount grocery stores, such as Aldi’s, can save you a lot of money. Buying store brands and in bulk Many stores carry store brands, items with the store’s name on the label. Or they may carry generic products, those items labeled without a brand name of any sort. If you’re willing to be a bit adventurous, keeping your eye out for inexpensive store brands and generic products can shave a substantial amount from your grocery budget. People often say that they don’t care for the taste or quality of store brands or generic items, but you may be surprised to discover that many products carrying generic or store brand labels are actually top-quality, name-brand items packaged under a different label. You may have the best luck with generic versions of: Tomato sauce and paste Canned and frozen vegetables Canned soups Cookies and crackers Dairy products (milk, butter, and cheese) Coffee and tea Bread, rolls, and buns Finding space for bulk purchase groceries and supplies Do you think you don’t have room for bulk purchases because you don’t have a pantry? Well, look at the back of your linen closet shelves behind the folded towels. If you’re like many people, you may have some empty space just waiting to be filled with a stack of cans, boxes, or packages. What about that empty corner in the garage? Or, look underneath your beds, and what do you see? Empty space and dust bunnies? Any of these places can be potential storage spots for a case or two of extra stewed tomatoes or refried beans. You can also split bulk orders with a friend or relative if you really don’t have the room but want to experience the savings to be found in bulk purchases. Seeing through grocery store gimmicks Grocery sellers spend money to learn how to fool you into spending more in their stores. Whether they’re enticing you into the store in the first place with sale items or convincing you to buy more expensive items, be aware of some of these tactics: The aisle switcheroo If you shop at a particular store regularly, you know where everything you buy is located in each aisle. Without realizing it, you’ve developed a form of tunnel vision and don’t really see anything except what you need. When the store rearranges the aisles or moves items from one position on a shelf to another, you have to look around and actually focus on each aisle and every shelf. By losing your tunnel vision for a time, the possibility of something new catching your eye increases dramatically, and consequently your impulse purchases increase, too. The store’s layout Most grocery stores have the same general floor plan — they keep produce, bread, dairy, and meat products along the edges of the store or up against the walls. By putting commonly purchased items against the farthest wall or way off in a back corner, customers have to walk past numerous displays and shelves full of goodies. Shop the edges of the store to save considerably on your grocery bill. Added benefit: The perimeter carries the healthiest items in the store. Your waistline — and your budget — will be healthier. Shelf arrangements If you want to find the best values on the grocery store shelves, look high on the top shelves or bend down and look at the bottom shelf. The brand-name and higher-priced products (as well as products designed to entice children) are located at eye level, while the generic, store brand, and lower-priced items are in the more awkward places to see. Using coupons and rebates People either love coupons and rebates or find them to be more work than they’re worth. Coupons and rebates are a valuable addition to a well-rounded approach to saving money. To make the most of your coupon savings, follow these suggestions: Look for double-coupon and triple-coupon deals. Look for coupons for items that are already on sale or that are deeply discounted. Don’t assume you get the best deal with the coupon; store brands can still be cheaper. When shopping online, look for online coupon codes to save on the purchase price or on shipping and handling charges; just type the name of the store and "coupons" into your favorite search engine to see what you find. You can also try websites like Rakuten, Honey, and RetailMeNot. To receive a rebate, you must fill out a rebate form and mail it along with proof-of-purchase materials — usually your original cash register receipt and the Universal Product Code (UPC) or barcode — to the manufacturer. Occasionally, a store will offer rebates in the form of store credit rather than money back from the manufacturer. If you shop in a store regularly, credit for shopping there again can be helpful to the budget. But be careful you don’t use the store credit as an excuse to buy things you normally wouldn’t purchase. The store isn’t really trying to save you money — they’re trying to entice you into spending more money.
View ArticleArticle / Updated 05-19-2023
Saving money can be as simple as 1, 2, 3, as you'll see in these 5 quick and easy approaches to managing your personal finances. 1. Reduce the Amount of Times You Go Out to Eat Going out to eat often can put a major crunch on your budget. By simply cooking a few meals at home, you can save a significant amount of money on a monthly basis and eat healthier. How to Save Money by Cooking at Home 2. Make Some Income from Your Money Make your money do a bit of work for you by opening an account at your local bank and earning interest. The balance in your savings account earns interest because the bank uses your money to fund loans to other people. In other words, the bank pays you to use your money Growing Your Money in Bank Savings Accounts 3. Don’t Be Wasteful in the Kitchen Wasting food adds up to wasting money. Here’s a list of easy ideas to help cut the cost of family meals — and save money in the kitchen. How to Save Money in the Kitchen 4. Save Money on Your Banking Fees Banking fees can be one of the more frustrating aspects of managing your finances. Although the fees you pay to your bank may never go away entirely, a little knowledge and some proper planning can help you to reduce your fees dramatically. How to Save Money on Your Banking Fees 5. Save on Gas by Taking Care of Your Car Tires Taking care of your car’s tires can pay off handsomely by increasing your tires’ longevity, handling, and performance, as well as providing you with a more comfortable ride and better gas mileage. How to Save Money by Taking Care of Your Car’s Tires
View ArticleCheat Sheet / Updated 04-13-2023
Use this Cheat Sheet as a quick way to determine which budgeting method you want to try. It also has tips to help you create a successful budget you can stick to.
View Cheat SheetArticle / Updated 03-16-2023
You don’t have to sweat out the dog days of summer, even when cutting back on your awesome, home-cooling air conditioning to save money. You can stay cool, even when it’s hot outside. Add insulation to your home. First insulate your attic floor, and then when time and money allow, add insulation to your basement, exterior walls, floors, and crawl spaces (in that order). Improve attic ventilation. Adequate ventilation under the eaves allows cooler air to enter and circulate throughout the attic. If you don’t have a permanent exhaust fan, you can set a box fan with the airflow pointed outward to pull the hot air out of the house. Shade your house from the sun. If your house isn’t shaded by trees, install awnings over any windows that are exposed to direct sun during the day. Cover your windows. Windows are a major source of heat during the summer. Reduce the heat coming in through your windows by closing the drapes during the day, adding reflective window tint to southern windows, and hanging old-fashioned bamboo shades outside. Make your air conditioner work less. If you use an air conditioner to cool your house, turn the thermostat up a bit higher than the temperature you usually set. Also, set the temperature higher for times when you’re not there. Use fans to circulate air. Moving air feels several degrees cooler than still air. Reduce how much heat you create inside your house. Use appliances other than the stove and oven to cook (such as the microwave, slow cooker, electric skillet, or toaster oven). Don’t use the heat setting on your clothes dryer.
View ArticleCheat Sheet / Updated 01-12-2023
How can you save for retirement when you need all your income to make ends meet now? What do you do when college loans come due and money is tight? How can you trim back household expenses? When the economy is down, you can still save money without sacrificing your quality of life. Every little change you make to your finances can help. Here, you get some tips on saving on energy costs, shopping smart, and making a budget.
View Cheat SheetArticle / Updated 10-26-2021
After you determine your actual spendable income, you can focus on how that remaining money needs to be spent. The first step to creating a budget is to sort expenses into three categories: needs, wants, and luxury items. But how do you distinguish between the three? What qualifies as a need can sometimes be blurry. A person basically has very few true needs: shelter, clean water, food and a way to prepare it, clothing, and warmth. Of course, it isn't realistic to expect a person to thrive with only these items. If you have a job, you need to be able to get there; you and your family need to protect themselves and their health; and you might be legally required to make other payments. But not everything you feel like you need actually is a need. Unless it's required for your job (in which case you ought to be reimbursed or deduct the expenses from your taxes). In order to create a budget for yourself, you first need to take a hard look at what you need versus what you want. Figuring required expenses Your required expenses, or needs, must come first. To figure out what your required expenses are, fill out this Required Monthly Expenses worksheet. If you have a surplus after meeting your required living expenses, go ahead and check out the next section on using your excess money for wants. If you aren’t already doing so, set up automatic monthly withdrawals from your paycheck or your checking account to pay for or fund each of the required expenditures. That way, your requirements are met automatically each and every month, and whatever is left over is yours to spend however you see fit. Wading through your wants Hopefully, you find yourself with some “extra” money after paying for your needs. You can use the Desired Monthly Expenditures worksheet to figure out your wants and how much you’d like to spend on them. After you add all your needs with the list of wants, you will likely discover that you have little or no surplus cash. If you determine that you have negative cash flow, you should prioritize your expenditures so that you don’t plan to spend more than you bring in. Solving for shortfalls If you have a shortfall after you calculate your required expenses, something has to give. Consider the following suggestions when you’re faced with a shortfall: Don’t completely cut out any of your required expenditures. You may be tempted to consider dropping insurance coverage and/or the amount of money you save for a “rainy day” if you don’t have surplus cash flow. You aren’t doing yourself any favors by skipping these items, and the decision will come back to haunt you sooner or later. Review each of the needs categories and consider ways to cut down on necessary expenses. For example, you may be able to obtain less expensive insurance and save money on groceries, clothing, and transportation by shopping around. Consider your employment. Often, the only reasonable option you and your spouse or partner may have is to increase your income by working overtime, taking on a part-time job, or possibly even changing jobs.
View ArticleArticle / Updated 07-02-2021
The federal Food Stamp Program is now called Supplemental Nutrition Assistance Program (SNAP); and instead of issuing paper food stamp coupons, SNAP recipients get an electronic benefit transfer (EBT) card to use in participating stores. When paying for groceries, you just swipe the EBT card in the same card reader that's used for credit and debit cards, put in your PIN number, and that's it! Whether you call it food stamps, a SNAP card, or the EBT card, here are some pointers to remember for using it: At the end of your purchase transaction, you should be able to see how much money is left in your account. You can't debit a higher amount than the cash register total and get cash back. Most participating stores indicate that they are SNAP members by displaying a sign in their window, but if you're not sure, ask the service counter or one of the cashiers. (The sign might say something like "We Accept Food Stamps, EBT, or SNAP Benefits.") You can buy most types of edible items in categories that you'd find in a supermarket: dairy, meats, produce, and so on. (Seeds that will be used to grow edible foods are also eligible.) Items that you can't buy with food stamps include: Alcoholic beverages and cigarettes Vitamins and medicines Any food that will be eaten in the store Any hot food Non-edible items like laundry supplies, paper products, and pet foods Your EBT card is good in all 50 states, even though you may have enrolled in one particular state. (The card doesn't work in Puerto Rico but does in the District of Columbia, Guam, and the U.S. Virgin Islands.) Any food stamp benefits that you don't use in one month will be carried over to the next month. However, if you don't use your SNAP card for a year, you will no longer be entitled to receive benefits. While SNAP is a federal program run by the U.S. Department of Agriculture, eligibility is handled by each state — and each state has its own set of rules. To find out if you're eligible for SNAP benefits, contact your local SNAP office.
View ArticleArticle / Updated 03-26-2016
Does the word budget send chills up your spine? It shouldn’t. Budgets allow you to have some control over what you spend. A monthly budget can help you to decide how to spend your money, plan for your future, pay off existing debt, and save a few pennies each month by reducing wasteful and impulsive purchases. To create your monthly budget Categorize your expenses. When you begin setting up a monthly budget, start with big categories before breaking your budget down into smaller expense categories. From your list of expenses, develop two separate budget lists, one for essentials and the other for extras. Within each general budget category, some items are essential (the mortgage or rent payment, electric bill, and groceries); others are extra (new furniture, gifts, and pizza delivery). Look through these lists to find flexible budget expenses where you can cut back. Put a star next to these flexible items so you can identify them. Estimate what you spend. Go through your checkbook and any other receipts or records you’ve kept over the past few months so you can track how much you actually spend on both essentials and extras. Add up your budget essentials list and the extras list separately. By keeping the lists separate, you can make cuts more easily, if you need to. Subtract the essentials total from your monthly income and, if you have money left over, subtract the extras total from that amount. If you still have money left over, great! Look into a savings or investing plan (talk to your bank or a certified financial planner for help setting up a plan). If your extras list takes you into negative numbers, start looking for places to cut back. You can also trim from the extras list to put more money toward debt repayment if that’s a high priority in your financial picture.
View ArticleArticle / Updated 03-26-2016
Your financial plan should involve the dreams, goals, resources, and responsibilities of the entire family. If you have a spouse, partner, or children, you may need to provide guidance as your family develops a financial plan. The success of any financial plan is dependent on the support, persistence, and dedication of all people involved. Without the participation of the entire household, you’ll face a continual uphill battle when it comes to your finances. Your spouse, partner, or children can be a help or a hindrance. As a family, you will face many challenges along your financial journey. But if family members are truly on board, they will work to help find solutions and not create additional challenges for you. How do you get your family on board with your financial goals? You must inspire them, just like a coach might. A coach needs the cooperation and coordination of each player on his team. In order to get teams to pull together, great coaches lead by example and command the utmost respect from each and every team member. Their team members strive to perform at their very best each and every game, not only for themselves, but also for their coach and their team. Great coaches inspire greatness. So how can you inspire your family when it comes to your personal finances? Share your vision, in living color, with your family members — your team. When you present your vision, make sure that you include the vivid details of why a goal is important to you and your family, and what accomplishing this goal will enable you all to enjoy. Elaborate on the payoff for putting in the hard work, compromise, or sacrifices that may be required to achieve these goals. The example shown here points out the objective and provides a few suggestions to help family members design creative solutions instead of just focusing on problems. Now you must figure out how to inspire your own family. On a sheet of paper, write down what you’d like to say to your family as you seek to bring them on board with your financial future. What subjects are near and dear to your spouse’s or children’s hearts? Start there — they’ll be highly motivated to help you help them get what they want.
View ArticleArticle / Updated 03-26-2016
Tracking your expenses is especially useful when your outgoing cash flow exceeds your income. Fortunately, you don’t need to go back and tally up months’ worth of checking account registers, credit- and debit-card statements, and cash withdrawals. This is a very time-consuming and painful exercise. Just estimate! Use the Cash Flow Monitoring worksheet to help you monitor your spending for the next couple of months. As you pay your bills, complete the worksheet. Click here to download and print the Cash Flow Monitoring worksheet. If you're looking for a simpler method of tracking your expenses, you can use the Expense Tracking Log to track every cent of just the surplus money — after all your taxes, bills, and other necessaries are paid — that you have to spend. Click here to download and print the expense tracking log. Write down every occasion you spend your surplus money, whether you buy your morning coffee, an afternoon soda at work, or gas on the way home. Account for every cent. Also, track whether you paid with cash, check, debit card, or credit card; whom you paid; and whether the expense is a need or a want. Use one log for each pay period. Note at the top of the worksheet how much your beginning surplus is (which you'll need to figure separately) and subtract from that amount each expenditure. By keeping your eye on the “magic number” (your surplus cash flow after meeting your required expenses), you can simply spend your money any way that pleases you — so long as you don’t exceed the “magic number.” No more detailed budget keeping required.
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