Budget Advice Blog

How to Budget Groceries

Administrator — Fri, 25 Aug 2006 08:54:39 +0000

In many homes, the center of family and social gatherings is the beloved kitchen table. But, what you put on that kitchen table could make or break your household budget. “How much should I be spending on my family’s groceries?” This is a frequently asked household budgeting question. Especially, from those just learning how to budget.Budgeting guidelines for food vary from resource to resource. But, I think it’s safe to say that the average family spends at least 15 to 20% of income on food. Second only to housing expenses, grocery budgets make up a good portion of total budget expenditures. This is an essential expense of course since, we have to eat to survive. However, there is some good news. Your grocery budget is also the most flexible expense in the household budget.The Center for Nutrition Policy and Promotion estimates that a family of two adults and two children spends between $687 and $827 per month on a moderate menu plan. Those who choose a thrifty plan spend between $445 and $519 per month. That’s a savings of over $200 per month simply by choosing a thrifty menu. So, you can see that there is potential for substantial savings here.Budgeting is sometimes a game of give and take. You take savings from one budget expense to give needed funding to another budget expense. This is often true if you are trying to build emergency or investment savings on a limited income. You’re not likely to reduce costs on more fixed expenses like your home mortgage. It’s best to work on reducing more flexible household budget expenses. This is where your grocery budget can come to the rescue!Here’s a simple guideline for how to budget groceries. Your groceries should never cost more than they “have” to. Seems like a silly answer. Of course no one spends more than they “have” to. Right? Unfortunately, just the opposite is true. It’s amazing how much money consumers waste on this very important budget expense. In fact, it’s often the very first place to look for overspending in a budget plan. Here are some suggestions for trimming down your grocery budget.

1. Planning is the key to budget savings.

Just like planning is essential to your overall household budget success, planning your grocery purchases is essential to maximize savings. Always check sale flyers for your local supermarkets. Remember, never pay more than you have to. Plan menus for the entire week based on “what’s on sale.”

2. Make a shopping list for ingredients you’ll need.

Once you have your menus, you can make a shopping list based on the ingredients you will need. Always check to see what ingredients you already have in your home.Follow your shopping list! Other than stocking up on leader items, as mentioned below, purchase only items needed for the weeks menus.

3. Stock up on leader sale items.

If you have room in your budget, always stock up on a leader item (drastically reduced item) that you frequently use. This will save you money down the road.

4. Use coupons wisely.

My rule for coupons is… “Don’t buy items you have coupons for. Instead, use coupons for items you intend to purchase.”

5. Make your own.

Always opt to make it yourself whenever possible. Stay away from prepared frozen and packaged meals. Find and make recipes for master mixes like seasoned rice, muffins, pancakes, and baking mix. These items costs substantially more when purchased in ready to mix portions. Keep your pantry stocked with the basic ingredients and always start from scratch when possible.

6. Eat meatless and one dish meals often.

When planning your menus include meatless meals like beans and rice, and egg dishes at least twice per week.Include one dish meals often. Meat is usually the most pricey of food items. Reducing meat consumption is a good way to save money on the food budget. Most people eat quite a bit more meat than necessary to meet healthy guidelines. Cut down and still satisfy hungry appetites by preparing one dish meals like, casseroles, stir fry, chili, and spaghetti.

Plan and use a combination of saving strategies. Avoid the grocery store when at all possible. The old “out of sight, out of mind” does work in this case. Grocers have various methods of enticing consumers to buy. Using coupons and rebates for items that are already on sale is a great way to maximize savings.

Buy Now, Pay Later Household Budget

Administrator — Fri, 25 Aug 2006 08:53:09 +0000

Like many consumers, I never had a plan for spending, budgeting, or future goals. Shopping for myself, my home, the children, gifts, holidays, whatever the event, had no limit. If I didn’t have money in the checking to cover an expense, I whipped out one of my credit cards. Budgets were not in my vocabulary. You might say my budget was the “buy now, pay later budget.” It’s a wonderfully, carefree, budgeting concept that satisfies the instant gratification world we live in. Unfortunately, I learned the hard way, the “buy now, pay later budget” almost always ends in financial disaster. I ended up deep in debt with no savings to speak of. My finances were out of control. It was time to create a new household budget.When you spend money without regard, it’s inevitable that you will use credit to meet your spending habits. You may have a smooth ride for some time on the buy now, pay later budget but, sooner or later, the ride gets bumpy. Eventually, the cards are maxed out, there’s no new credit to be found, and no balance increase options available. Your personal finances become a grave concern when you realize that you’ve hit a dead end. Something has to change. You are forced to take a good look at your finances. If you’re in this position, it’s rarely a pretty picture.

When I arrived at that dead end, I had to make some major changes in my spending habits. Debt elimination had to be my first budgeting goal. I started my first official budget, the “debt elimination budget” and set my first financial goal, to become debt free. My debt obligations set me back at least five years. I won’t have the funds to plan for anything else, until my debt is paid. As a result of a large debt payment each month, I don’t have a dollar to spare in my budget plan. Household budgets are tools for managing money, setting goals, and planning for the future. My current plan for the future is to become debt free.

When I first started budgeting, I was amazed at how much money I was wasting. And, how much I was overspending. After reviewing all my personal and household expenses, and tracking my spending, I saved thousands of dollars per year by cutting back. Making these changes merely brought my expenses within my income so that I could stop using the credit cards. This was a major step in taking control of my personal finances. Once I had accomplished that, I set my budget debt expense to the current required payments. If a payment goes down , I still pay the amount set in my original budget plan. This allows me to pay a little extra each month, since payments generally decrease slightly as principle is paid each month.

I have included a debt management plan in my budget based on what is known as the roll down payment plan. Once an account is paid off, my budget debt expense remains the same amount. Those funds are then redirected to the next debt account that I want to pay off. It is a much quicker way to become debt free as compared to the traditional payment method. And, it keeps your budget debt expense at a consistent amount. Over time you will also be building in an invisible emergency fund.

When finances are tight and debt elimination is a primary goal, it can be difficult to include savings in your household budgeting. Using the roll down method of debt repayment, eventually, you have enough extra funds built into your debt payment budget expense to use in the event of a financial emergency. If you have an unexpected expense one month, you have the option to pay the actual minimum payments on your cards and use the excess to pull you through the month. Not something you want to do often, but only in a real emergency, since your primary goal is to become debt free. If you have substantial debt, household budgeting to become debt free is the first step to becoming financially independent. Your debt elimination budget will eventually turn into a savings budget.

In Search of the Perfect Home Budget

Administrator — Fri, 25 Aug 2006 08:51:55 +0000

It seems I’ve been “in search of” the perfect budget longer than I can remember. The perfect home budget would be one that would require minimal interaction on my part and one I could actually stick to. If someone else could do it for me, that would be better than “the perfect” budget. I’m sure a hired money manager would be the answer to my perfect household budget dream, but I don’t think my modest finances allow for such an extravagant expense. My budget won’t allow it!During my search for home budgets, I went through a lot of budgeting trial and error. It’s a long, time consuming, wasteful process, to say the least. But, like all trial and error, a lesson is learned. Lessons learned not only about myself but, about various budgeting techniques. The most important lesson I learned, was to make it as easy as possible on myself. I finally admitted to myself that you just can’t expect personal traits to change quickly. I was of little self-discipline and very unorganized when it came to my budgeting tasks. So, my budget had to change. I had to find the perfect budget to fit me. And so, I continued in search of the perfect household budget.

I had friends and family of basically the same financial means as myself. Some of them had successfully budgeted and saved their way into more desirable homes and financially secure positions than myself. A good budget could mean the difference between financial independence and financial ruin for me. Budgeting my personal and home expenses was essential to my financial well being. I knew this. I also knew that I would never be debt free until I got this budgeting dilemma under control. I could feel that financial independence was only one perfect budget away. If I could just find it!

After many failed budgets, I did find the answer to my budgeting dilemma. No, I wasn’t able to find someone to do my budgeting for me. But, I did find a pretty amazing budgeting software that practically does it for me. I discovered that online personal finance budgeting was my perfect budget. Easy start up and easy maintenance. Categories essential in most budget planning were already named and organized appropriately, ready for me to use.

Online budgeting is my perfect budget. It practically takes care of itself. It requires minimal maintenance on my part and keeps all of my budgeting, and finance information, neatly organized in one central location. This online budgeting system retrieves my bank account transactions so all I have to do is place them in the right budget expense categories. It helps keep my budget information organized regardless of my poor organizational skills. Online budgeting is “the perfect” budget among budgets for me!

Winning the Budget Tracking Marathon

Administrator — Fri, 25 Aug 2006 07:19:01 +0000

Getting on the right financial track is a big step in itself. Staying on track is just as important. Tracking your budget progress is essential to budgeting success. Staying ahead and keeping on track can seem like you’re running a marathon. Endurance will be your best asset in the budgeting race. Tracking expenses, income, and spending, are necessary to sustain your budget. Win the budget tracking marathon by choosing to regularly maintain and update your budget.

All budgets need an overseer. You are your budget’s overseer! The budget overseer maintains and tracks the success of the budget to be sure it is effectively moving finances in the right direction. That is, the direction that achieves your goals. Being an efficient budget tracker can mean the difference between meeting your finance goals and falling back into old wasteful spending habits. Effectively tracking your budget will help you maintain control of your money, reduce spending, save more money, and grow your complete financial net worth.

Reviewing your budget on a regular basis, tracks spending, income, and net worth to keep you in first place. Maintaining your budget is a breeze when you review cash flow on a daily, or at the very least weekly, schedule. Don’t let transactions accumulate. This could quickly lead to budget neglect. You’ll dread catching up. It’s much easier to keep up, than it is to catch up. Enter transactions into appropriate budgeting categories as quickly as possible. This can be essential to identifying and correcting overspending in a timely manner.

Brush up on your tracker skills to keep your budget moving forward. Having all financial information, readily available, when maintaining your budget is a must to prevent oversights. If you use an online budgeting software that retrieves your bank and credit card transactions, tracking your spending will be easy. Your information is readily available for viewing and organizing. If using an offline or written budgeting method, get in the habit of gathering all transaction information before you sit down to work with your budget. You will find it less time consuming if you organize information beforehand. Assign transactions to specific categories and track your budget often to have a winning budget.

Why Use a Budget Template?

Administrator — Fri, 25 Aug 2006 07:13:22 +0000

Exactly what is a template? A template is basically a form that separates content. It’s kind of like a starting point that can be customized to suit an individual project. In budgeting, a starting template is often used for guidance and to save time. The budget template separates financial categories and subcategories into a preset form that can be customized to suit individual needs. It can be very useful in providing a starting point for those who might be new to budgeting. The template gives a general ideal of what a standard budgets looks like.

Standard budget categories for household or personal expenses and income are preset in budgeting templates. Budget templates come in many formats varying in complexity and form. Templates can be found in the form of paper (budget planners and/or worksheet) or in computer software (either online or offline). In a template spreadsheet the cells have been defined and formulated to perform calculations for your individual budget data. The complexity of budgeting templates, and how much time they can save you, varies from form to form. Saving time is reason enough to use a budgeting template.

Time management has become a big concern in today’s fast paced world. Using a budgeting template will save you time in creating and possibly maintaining your budget. Templates save the user a great deal of time, allowing them to focus on data input, customization, and decision making, rather than creating the actual form for budgeting. An all-inclusive budget program with a variety of financial templates is a great time saver. This might include templates for budget planning, financial net worth review, debt management, cash flow management, a spending plan, and financial goal setting. As our finances become more and more complex, budgets become more and more complex.

Having all your financial information in one location is more efficient and a much more effective budgeting strategy. It will help you keep your eye on the big picture. Your complete financial picture that is. Budgeting templates are readily available today. Some are free to use, some require a minimal fee. They’ll make your budgeting tasks easier and save you time. Why wouldn’t you use a template to start or improve on your budget today?

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