How to Create Realistic Budget

Posted on August 9, 2013. Filed under: Finances | Tags: , , |

budget-clip-art(3)So you have decided you want to be more accountable for your money, but where do you begin? With a realistic budget of course! Realistic being the operative word which means you have to create a budget that incorporates all of your expenses and when they need to be paid. If you are married, creating a budget should be something you do together.

Below allocating spending, you must first identify your expenses. Start off with itemizing your fixed expenses such as your mortgage/rent, utilities, loan payments, insurance etc. Then list out those unfixed expenses such as groceries, entertainment, and other misc expenses. Dave Ramsey’s Monthly Cash Flow provides an excellent start to begin recording your spending.

Warning: if you have never tracked your spending before this may be easier said than done. In fact, it can take a few months to achieve an accurate budget. I suggest that once you start the process you track your expenses more closely to ensure that you are allocating the right amounts.

So now that you know what you spend, how does that compare to what you are bringing in? Are you over-budget or under-budget? When creating a budget, I personally suggest that you use Dave Ramsey’s $0 balance budget. This means that all your money is accounted for and that your balance at the end of each month is $0. Here are some suggestions for how to achieve this in either situation.

Under-budget: Floating on water

So you make more money than you spend! Great, you are all set right? Wrong! Now you need to evaluate your budget to make sure that you are investing in the right things. These tips are taking directly from Dave Ramsey’s Financial Peace University course.

  • Do you have the proper insurance coverage? – life, health, auto, home/renter’s
  • Do you have adequate saving or are you contributing to building your emergency fund? You should have at least $1,000 in savings to begin with and eventually should be working towards having 3-6 months worth of expenses saved.
  • Are you using credit cards to make purchases instead of paying for things in full? If so, take the scissors out and get rid of them fast. The idea of a budget is to not spend more money than you make. Credit cards almost encourage you to break your budget. Not to mention, they put you further in debt and increase your fixed monthly expenses.

So are you seeing red now? If so, skip on down to the over-budget section.

Still under-budget?

  • Do you have debt that you are paying more towards to be debt-free quicker?
  • Do you have a full 3-6 months worth of expenses saved?
  • Are you contributing 15 percent of your income towards retirement?
  • Are you saving for your children’s college? (If applicable)

Your budget is looking more like $0 now, huh? Congrats! All your money is accounted for and you are making preparations for your future.

Over-budget: I’m drowning, help!

So you spend more than you make? Believe me, you are not alone. But in the words of Maya Angelou, “When you know better, you do better.” So now you must evaluate your budget and see where you can make cuts. Take a look at my other posts to see how you can cut your household spending and entertainment.

Sometimes it’s not this easy. If you are spending more than you make you need to either decrease your spending or increase your income. It’s that simple. If you are drastically over-budget, you may have to resort to more extreme measures. Downsizing your lifestyle may be in order or filing bankruptcy may also be something you have to consider. These are not decisions that should be taken lightly but the one thing you can’t do is continue the cycle of living beyond your means. Get help if you need it but do not ignore this new insight.

There you have it, your first step to controlling your money. Remember budgeting is a process and mastery comes over time. Pat yourself on the back for taking this huge step and feel free to comment on this post if you need any encouragement along the way.

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Budget-Friendly Kids

Posted on May 13, 2013. Filed under: Family, Finances | Tags: , , , |


Let’s face it. We all want to give our kids the world. We even measure our success on being able to give our kids more than our parents gave us. What we fail to realize is that the best gift we can give our children is to teach them responsibility. Ironically, to do this you can’t give them everything! Go figure. The reality is that they will not be given anything once they get out in the real world. If you give them everything they want now and then they succumb to their immediate wants as adults, they (and you) will be setting themselves up for financial failure.

What it really boils down to is you can’t compromise your financial situation by getting your kids everything they ask for. In keeping your financial situation in order, you teach your kids that money does not grow on trees and that there has to be accountability for every dollar you spend. To help you keep your finances in check, you should implement (and stick to!) a budget for your kids. Holidays, birthdays and special rewards should all come with a firm price tag that your children (and you!) must adhere to. Sticking to a budget doesn’t always mean telling your kids no to everything they ask for. In fact, creating a budget creates an opportunity for you and your children to be extremely resourceful. They learn to think outside-the-box as they opt for less conventional outlets to get their items from. They are also taught invaluable lessons in researching, saving, and all-around patience.

Here are five tips on how to stick to a budget and get everything on your kids’ wish list:

1. Determine budgets for holidays, birthdays, etc. well in advance so that everyone is aware of how much money they will have to spend. For older children, this budget should be communicated. However, for younger children, the budget is more of a FYI for yourself!

2. Have your children make their lists early and start your shopping as soon as you can. This will prove beneficial because it allows you to shop around for the best deals and you can hold out for a great sale. If you have older children, get them involved in hunting for the best deal.

3. Shop out-of-season or during big shopping days. I have twins that have birthdays in February. Buying their birthday items the day after Christmas provides big savings. My son has a birthday in July and I can buy summer clothes for him at a really great price during that time. Knowing the best times to buy gifts for the kids as well as the best times to buy certain items will help you get the most out of the money you have budgeted.

4. Give your kids the option of whether they might want to purchase a gently used item. This allows them the ability to get higher ticket items within their set budgets. Garage sales, Craigslist, thrift shops, and even pawn shops are good resources to find used items at a great price. Some stores even sell refurbished items, such as electronics, at a discounted price.

5. If your child wants a higher priced item, encourage them to save their money so that they can put it towards any money that you might give them to shop with. This would include any allowances they might get or money they may have received from past holidays. Also, if you know that they will be getting money soon, you might want to suggest that they wait until after the event to determine just how much money they will have. The last thing you want is for them to pick things out just to spend up all their money. Having patience and holding out for something they really want will be a lot more fulfilling.

Sound simple enough? I encourage you to try these out and see how it works for you. Remember to adjust your budget for gifts so that you are well-prepared when the time comes.

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10 Ways to Lower Your Grocery Bill

Posted on March 10, 2013. Filed under: Finances, Grocery | Tags: , , , , , , , , |

iStock_00001876The future of double coupons may be up in the air with major grocery chains, such as Meijer and Kroger, ending their double coupons in certain markets. For additional details, view the links below:


The purpose of ending the double coupons is to promote lower everyday prices throughout the store. Sound familiar? (And yes, in my experience Walmart does not double coupons.) Whatever the result, this is the perfect time to discuss how you can get the most bang for your grocery buck. I talked to you previously about couponing but there are other factors that can help you save on your monthly groceries.

1. Set a budget – Groceries are an unfixed expense and are flexible. So what exactly should your budget be? If you are reading this blog, there’s a good chance that you are looking to lower your budget. If funds are limited, you may already have a dollar amount in mind that you need to stick to. If this is the case, set your budget accordingly and I hope to help you get there. If you are just looking to lower your spending, I suggest you start by reviewing your past month’s grocery receipts. Now cut that by 10 percent to begin. (Once you get the hang of it, you can attempt to cut this even further. I was able to cut my spending by 25 percent by sticking to these methods. Results will vary depending on your current grocery shopping habits.) When you make your grocery list, make sure it is budget compliant and when you go to the store, stick to your list! If possible, you may want to have a little money from the budget left over just in case to find some good bargains.

2. Shop multiple stores – View your local sales ads to see where the sales are. You can purchase the Sunday newspaper to get all of your local ads. There are also smart phone apps that you can use. (e.g. I use Weekly Ads & Sales app that I downloaded from my iPhone.) You can also sign-up for store emails and many of them will let you view the next week’s ad in advance. (You will see why this is important shortly). You may find the best deals in some of the most unlikely places. Dollar Stores have a vast variety of items for a buck. The local farmers or fruit markets may be the best locations for deals on fruits and vegetables. I personally go to Joe Randazzo’s in Westland, MI and have found them to be much cheaper than the grocery store. Be prepared to visit multiple stores in order to complete your grocery shopping. If the stores are not within close proximity to one another, try and plan to go when you are in the area or while you may already be out on errands. This will help you save on gas. Remember: we are not trying to replace an expense with another.

3. Buy Generic – Try out store brand alternatives for some of those commonly used items. They are often cheaper than brand products even when those products are on sale. Some store brands taste different than others so don’t be discouraged if you don’t care for a certain store product. I used to only buy Heinz ketchup because any other ketchup I tried did not taste the same. I recently found that Meijer’s ketchup is pretty comparable. In addition to trying store brands, also consider trying other brand names. As a rule of them, there is usually one brand item on sale each week for those commonly bought items. For instance, if Kraft shredded cheese is on sale one week; Sargento will probably be on sale the next week. But at any given week, you will find this product on sale.

4. Know a deal when you see it – The key to truly being a savvy shopper is that you know what a deal looks like. Just because it’s on sale or you have a coupon doesn’t mean it’s a great deal. Some stores, like Walmart, who have everyday low prices may provide a better deal. Stores like these also are the best location to go to when you need an item or when you are trying to use a coupon before it expires and it isn’t on sale . You should make it a priority to know a good price for those items you commonly buy. Because items come in various sizes, it may be easier to determine how much you should pay by measured unit. This is where that middle school math comes in handy! Take the total price and divided it by the measured unit. Toilet paper and paper towel are good examples of where this method would work well. I’ve found that when toilet paper goes on sale, it is usually around 50 cents for one “big” roll. So that is my threshold amount to determine if it’s actually a good sale. It may take several weeks before you can really identify a good sale. Once you can, you will be able to increase your savings even more.

5. Stock Up – The second part of knowing a deal when you see it is to take advantage and STOCK UP! Now this may seem like bad advice when I’ve already encouraged you to create a budget and stick to it. Sticking to your budget is still necessary. Another thing I would consider before deciding if you have a “stock up” deal is to see if it is cheaper than the store brand or its larger equivalent. (Usually the larger items are priced cheaper per measured unit. The more you buy, the more you save.) The week of any major holiday is a great time to stock up on canned vegetables and baking supplies. These will usually be at their lowest prices as people are buying these in large quantities for their holiday meals. If you had extra money left over from your budget, this is where you would put it to use. If not, see if there are any items that you can remove from the list. As you start practicing these concepts more and more, you will find that you are not only saving, but you are able to purchase a lot more. This will make it easier to exchange items off your list for these good bargains.

6. Take Inventory – Know what you have in your pantries and when you are almost out of an item. You don’t want to stock up on something that you already have plenty of. You also don’t want to be out of something and be forced to buy it at regular price. Make sure your family helps with this. Some products you may buy specifically for them so it is important that they let you know before they run out of something. Doing this, will allow you to always to able to fish out the best deals for the things you need.

7. Shop Specials and Clearances – Many grocers mark down foods that they have too much of and need to sell before they go bad. These are marked down significantly. If you can consume them by the desired date, then you should definitely take advantage of these bargains. Also, the health and beauty aisle will mark down vitamins and cosmetic products. Be sure to visit that section as well as these are ideal non-perishable items that you can stock up on. Personally, I love buying new polish from these clearances. I created a pretty good selection for my daughter to choose from. Finally, many times you will see items that are bonus sizes for the same price as the regular size and even some that are two for the price of one. Keep an eye out for these items. Quantities are limited so grab them up if you see them.

8. Select Saturday or Sunday as your designated grocery shopping daysWhy? Well most stores start their new sales on Sunday or Monday. If you shop on either of these days, you allow yourself the flexibility of waiting to purchase items if there is a better deal the following week. This is where getting the ads in advance will work in your favor.

9. Plan meals according to what is on sale – It is wise to have your meals planned out prior to making your grocery shopping list. This ensures that you have all the ingredients you need to make the meal and you are not running out to the store to grab any forgotten items. I want you to go a step further and plan your meals around what is on sale that particular week. If pot roast or pork chops aren’t on sale, then save those meals for the next week. The Internet gives you tons of resources for you to be creative with your meals so no one gets bored.

10. And finally, couponing! I went in-depth about couponing in a previous blog. If you missed it, click here.

So there you have it, ten ways to reduce your grocery spending. I’m sure many of you are using some or most of these already. I challenge you to try them all for maximum savings.

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Frugal Cleaning

Posted on March 2, 2013. Filed under: Cleaning, Finances | Tags: , , |

homemade productsHomemade cleaners are eco-friendly and also very cost-efficient. In searching for ways to reduce our household spending, I eagerly embarked on this new do-it-yourself task.

Keeping a few multi-purpose ingredients in your home will give you the ability to make cleaners for several different purposes.

(Tips: We buy spray bottles at the Dollar Store or repurpose bottles from commercial cleaners. This keeps our storage costs at a minimum. Also, when repurposing jars or bottles, you can get rid of any lingering smells by rinsing with vinegar and baking soda. You must make sure the containers are closed tight. This even removed the smell from a pickle jar; which is pretty much impossible to do!)

Here are the homemade cleaners that are commonly used in our home:

All-Purpose Cleaner – This is my go-to cleaner for everything. Very simple ingredients and works great. (Click here for directions on how to make this product.) I tried using the citrus peels; but sadly, I grew inpatient and ended up taking them out way too early so the smell did not linger very long. I opt to use extra drops of essential oil to give our home a fresh clean scent. At first, I was hesitant about the vinegar as I thought the smell would linger. In actuality, the vinegar smell disappears within minutes of using the product.

Glass Cleaner – Four common ingredients will get you a glass cleaner with the same power as Windex. Seriously. Alcohol, vinegar, water and a bit of cornstarch will keep glass tables and windows sparkling clean. This cleaner even works to remove soap scum from your glass shower doors. (Click here for ingredients).

Homemade Bleach – While I do not use this cleaner as frequently, it serves its purpose for those hard-to-clean stained surfaces. I used it to get the grime from my marble tile in the shower, stains that I couldn’t get out with commercial cleaners, and the results truly amazed me. The fresh lemon juice ingredient also makes for a wonderfully-scented cleaning product; a good alternative to the typical harsh bleach fumes. (Click here to make yours.)

Eyeglass Lens Cleaner – Equal parts alcohol and water and a drop of dish soap makes for an inexpensive daily cleaner for your eyeglasses. Small spray bottles can be purchased from the Dollar Store to store this product. Repurposing containers for travel-size body sprays (like from Bath and Body Works) will allow you to take this product with you on the go.

Beyond the cost and environment benefits, homemade cleaners provide convenience. Have you ever had to drop everything and make a run to the store to purchase cleaning ingredients in the middle of a cleaning job? This has been my fate far to often; and usually, I opt for convenience and end up paying a lot more. But not anymore. If I run out of cleaners now, I simply gather up the ingredients and make more immediately!

Homemade cleaners are also kid-friendly so you can feel free to put your kids to work without worrying about harsh chemicals harming them in any way.

What homemade products do you use? Leave a comment and share!

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