Budgeting

Veterans: Ever wonder how to save more money monthly without living too frugally?

Have you ever had this experience when trying to make ends meet?

You’re working hard at your job. You get what some consider to be a decent pay, but at the end of the weekend you’re feeling like the money is already running low.  Then the stress starts…

That’s how it was for me for years! I got paid every two weeks and 3 or 4 days after payday I was usually flat broke. I just knew there had to be a way to make it last longer other than trying to learn how to make money from home online.

If I sat down and wrote out a budget once I must have done it a thousand times. Every time I thought I had it figured out something would come up, kid’s needing shoes, fix something on the car, you know what I’m talking about.

It was slow coming but I finally realized that there had be a way to plan for the unexpected. I tried several ways.

See how to save more money fast each month on a tight budget!

The first was to keep a little cash on hand at the house. That party was doomed from day one. Then there was setting it aside in my checking account. Doomed again.

That’s kind of a long, dull story to get to my point which is that “I just didn’t have a plan”. The bills were on one side of the paper and my income was on the other, but that’s as far as it went.

To develop a thorough budget plan, you need to use percentages of your income for your bills. Don’t try to make this too complicated. Keep it simple. Here’s an example:

HOUSING – 30% = HOUSEPAYMENT OR RENT, TAXES, INSURANCE

HOUSEHOLD – 30% = EVERYTHING YOU SPEND MONEY ON BETWEEN PAYDAYS (GROCERIES, GAS, SCHOOL LUNCHES, AND DON’T FORGET YOUR POCKET MONEY) TAKE YOUR TIME WITH THIS ONE.

OTHER BILLS – 30% = CREDIT CARDS, ELECTRICITY, PHONE BILL, ETC.

SAVINGS AND CRISIS FUND – 10% = YOUR LONG AND SHORT TERM SAVINGS (SHORT TERM SAVINGS WOULD BE USED TO FIX THE CAR, BUY A NEW TV, ETC.)(LONG TERM SAVINGS IS FOR THINGS LIKE BUYING A HOUSE, COLLEGE FOR THE KIDS, ETC.)

One of the most important points to making and keeping a budget is to use cash for your household expenses and use the bank for the bills and savings.

Stay well away from the ATM because it causes money to turn to a fine mist, disappearing into thin air time and time again.

The short term savings or crisis fund as I call it, is the key to making your budget work. A lot of what we use credit cards for can be bought using the crisis fund. If we sat down and added up the interest, late fees and penalties we pay on credit cards, most of us could buy a house full of furniture with that much money.

GETTING STARTED WITH A SIMPLE BUDGET

Write your bills on a piece of paper. Then put them in the category’s listed above (Housing, Household, Other bills and savings and crisis fund).

Next figure your monthly income. This is your take-home pay. HINT: For those of you that get paid weekly multiply by 4. If you get paid every two weeks multiply by 2. About every 3 or 4 months you will have an extra paycheck, but don’t count that. I’ll explain later.

Compute your percentages. Example: If your income is $2000 per month and your house payment, taxes and insurance comes to $600 per month, then $600 divided by $2000 equals 30%. Do this for all the categories of your budget.

Now the fun begins. What if my income is $2000 and my house payment is $750 per month? That’s 37.5%. What do I do? Don’t panic, just compute the other categories. They may be less that the target percentage. If they aren’t less, still don’t panic. There are ways to bring these things in line.

Look at how all of your percentages compare to the target percentages above. If you are at or under 100% you are still OK. If it comes out to over 100%, then some adjustments need to be made.

If you are over 100% look at which category goes over the target percentage. I’ll bet it’s other bills. That is where the vast majority of us have our biggest downfall. But the good news is that this category is the one we have the most control of.

There are hundreds of ways to cut a little from your electric bill, phone bill, credit card debt, installment loans, etc. Way too many to list here. We will be covering many of them in the coming months.

Before I forget, let me give you some ideas of what to do with that extra paycheck that I mentioned before. HAVE SOME FUN. After sticking to a budget for 3 or 4 months, you deserve it.

Now for a few tips to make that cash last til payday.

1. Discipline, discipline, discipline. If you have the discipline to get up in the morning and go to work, or get a house full of kids off to school or what ever your routine is, then you already have the discipline to manage your money. Just work at applying it.
2. Try paying yourself two or three times between paydays. This doesn’t work well for the groceries. Usually buying your groceries in one trip saves money. But after you buy the groceries and fill the car up then divide the money in two or three parts and set a given day to get more. If your paid weekly on Friday, then Tuesday of the next week is a good day.
3. Build some enjoyment into your plan. Allow money for a pizza night or movies. Budgets that are all work, don’t work.
4. Be aware every time you spend money that there are necessary items that have to be bought before you get paid again.
5. If you are married, work closely with your spouse on making your money last til next payday. This alone can make it or break it.

Now for the answer to the question in the topic of this article, Yes it’s not only possible, but likely when you focus hard on not spending money out of a habitual response to some external stimulus, but from a state of complete awareness of whether it is necessary. Plus, it’s really nice to have a few dollars left over when the next paycheck comes in.

How To Save A Lot Of Money Tips For Veterans

Hello to all you veterans trying to gain financial freedom. This site is dedicated to the men and women of the armed forces who want to create wealth and happiness through saving and learning to make extra money doing online jobs from home.

When people think of saving money, the first things that comes to mind are clipping coupons or buying at the cheaper gas station. While these can be good money saving ideas, I feel that to really save money, we must go WAY beyond that.

Almost every aspect of our monthly spending budget could be a potential money saver.

Let’s go over a few items and show a few ways that we can save some real money.

Save Money On Your Mortgage

If you have a reasonable mortgage interest rate, then this is great for you.

My friend just recently refinanced her mortgage and lowered the interest by a full 3 percentage points. This alone saved her over $50,000 and cut 10 years off the life of her home loan.

By the way she got that mortgage refinanced through Chase, but it could be through your preferred lender as well.

Why not surf the web and see if you can find a better rate. Don’t forget to consider closing costs before you decide. Surf around to to see if you can get a better deal on a mortgage.

Shop For Cheaper Internet Service

If you are paying a higher rate than normal while connected to the internet, consider looking for cheaper alternatives. In Chicago where we live, there are now three providers that are bidding for service, not to mention only using your cell phone.

Reduce Costs For Cellular Phone Service

Most of us have dedicated ourselves to one cell phone service company and may have been with them a long time.

But after years of being hassled to death, I switched from Sprint to T-Mobile and while the price didn’t change much, my satisfaction went wayyyyy up.

I know some people who hate T-Mobile, but I certainly am not one of them, especially after years of sub-par living with Sprint.  I have noticed that T-Mobile’s data speeds are affected by how much traffic they’re getting from the particular parts of the city I happen to be in.  The South Side is now not so great for T-Mobile, but when I travel about, it is pretty darn good.

Your mileage may vary, though… I didn’t think I saved money switching to T-Mobile until I went on vacation out of the country. Then I realized what a sweet deal they give their customers. As long as I was near wi-fi, I could use my phone as if I was still in Chicago – No Extra Charge! Other carriers are starting to catch on though. Mind-Boggling that it took this long though…

Then there are the “second tier” carriers.  Just look around. They are everywhere.

The idea is that you need to sit down and go over every aspect of your budget and investigate if there are ways to rearrange expenses so that you end up with as good a life given what you are going to spend your money on anyway.

As every veteran knows, planning and organization are the key to success in anything and this really goes for saving money.

A Good Idea To Try: Saving Money As a Group

Having other like-minded people around to hold you accountable could be really helpful to help you meet financial goals.  I believe that being accountable to others who team up with you to meet your goals means you are much more likely to stick to the money saving or budgeting script when your urges are about to run wild.

Easy and Cool Money Saving Tip

Have you heard about the Dollar Bill Saving Plan. With this plan you never spend a dollar bill (except for possibly tips). I have been doing this for some time and average putting away $50 to $75 a month.

I just put all of my dollar bills in a jar when I come home. I take this money and deposit it in savings each month.

Then I take this jar to the bank and put it in a vacation savings account. Try it. It’s a great way to painlessly increase your savings for your holiday gift fund or vacation fund.

Veterans: Reduce Your Debt Using These Hacks!

Are you a veteran looking for methods to get out of debt?

This site is dedicated to providing veterans with information that can help in all areas of their financial life and also provides information on how to how to make money online.

The following is an idea generated by a reader comment talking about the transition from becoming debt-free to living debt-free.

In this guest-post from James G, he describes how he created a virtual employer in order to limit his natural spending habits. By playing games with himself, he was able to go from $50,000 in debt to having over a million in savings in just fifteen years. This is a pretty interesting take on moving to a financially clean slate.

By James G:
How is living debt-free different than becoming debt-free? If you are rational (and fortunate) it shouldn’t be different at all.

In my early 30s I lived paycheck-to-paycheck, had no assets to speak of, and was $50,000 in debt. At that point I decided to change things. I did so in the usual and most uninteresting way:

• I moved to a less expensive apartment.
• I stopped eating out (or eating take-out) every night, and started cooking my own meals a majority of the time.
• I found ways to buy the luxuries I enjoyed more cheaply — it is easy to find ways of spending 20-30% less on many things things that bring you pleasure, like wine and good food.
• I reduced the size of my wardrobe but spent more on each item. I saved money because the clothes lasted longer and looked better throughout their useful life.

Through these frugal ways I devoted 20-30% of my income to paying down debt, and was debt free in several years while enjoying my life no less.

Since I was devoting so much of my income to debt, I decided to keep things the same in the next phase of my life. I opened 401K and IRA accounts and maximized my contributions immediately. I had a little left over, so I opened an account for savings. Since I knew I was still bad with money, I decided to play a trick on myself. I set up my financial accounts to make it appear that my salary was mine to do with what I pleased, but did so in a way to disguise my actual income.

A tale of two employers

My real-life employer direct-deposited my paycheck into a money market account. This account used an automated bill-payment service to make deposits into my regular checking and savings account every two weeks.

This last set of accounts was used for ATM transactions, and for paying all of my bills. Income into this account was my salary. I had to live within my means just like I ought.

However, it was like I did not work for my employer, but for a fictitious employer. When I got raises or bonuses, they went into this fake employers money market account and did not appear in my salary — they were left to build my savings faster.

Once a year, I gave myself a raise by changing the amount of the bi-weekly salary that went into my personal bank accounts. My income kept rising, just a bit more slowly than in my real-life job.

I never felt that I was scrimping because my virtual job was increasing my virtual salary faster than inflation. It took me about two years to pay off debt, and another 4-5 years to build up emergency savings and open a brokerage account and start investing.

Now, my fake employer (my emergency fund money market account) kept making deposits for my salary but also started making deposits into my investment account.

Again, I was tempted to spend more as I started building assets. However, I was still able to limit myself to my virtual salary, and though I treated myself to slightly larger raises, this still only happened once a year and I could do so rationally without feeling too tempted.

I had a couple of windfalls along the way, an unexpected gain, and a severance package when one of my employers went under. However, these benefited my fake company, and never appeared in my virtual salary. Thus I increased my assets and did not suffer any loss.

Fake employer, real rewards

Now, fifteen years after I started, I have a modest amount of wealth. I passed $1,000,000 a while back and am nearing $2,000,000. My income from investing is now larger than what I ever earned as an employee.

However, my long-term goal has remained unchanged, and my way of accomplishing it is just as useful. My goals are to be financially independent (not tied to any external source of income) and rich (having a reasonably high disposable income).

As most of you know, being rich is the enemy of being wealthy. The road to wealth is simple: keep expenses (and the effects of inflation) beneath income.

It really is that simple.

The larger the difference between income and expenses, the faster your wealth will grow.

Now I am at a point where I could retire immediately. However, once I stop devoting many hours per week toward generating income, I will want to spend more time doing things which raise my expenses — travel, enjoying various hobbies, etc.

I also might have insufficient assets if accident or the economy or my portfolio significantly affect my outcome. Thus, I will probably delay my retirement for a longer time.

My virtual employer is just as useful as before. My goal is still to have as small an income as possible without feeling deprived. My goal for retirement income is at least twice my current virtual salary. Once the retirement income I desire is less than 3%/year of my investments, my time will be my own.

I will be richer because my virtual salary will be much higher (about twice as high) than I am accustomed. I will also be wealthy because my income will no longer be linked to how I spend my time.

Stay the course

As you can see, though, my life and my actions did not change when I crossed the line from debt to savings or when I crossed various milestones on the way to financial independence. I still lived within my means. I use credit daily, but pay credit cards in full each month. I increase my salary each year and am allowed to spend it as I please.

However, I structured my finances in such a way that I was never tempted to treat bonuses, tax refunds, raises, or other increases to income or wealth as if they were my own. My virtual employer — me — kept me happy enough on a slowly rising income, that I truly was never aware of any hardship.

One reader wrote:

I don’t think being debt-free feels any different than being in debt. It is just different. You are paying off for your future rather than your past. Until you reach your objective where you no longer need to save, you are still living the same life. Instead of worrying about how much debt you have left, you worry about how much you have left to save. The good thing is that I don’t feel wealthy.

He hit the nail on the head. If you play your cards right, you will experience a slow and steady rise in income over time. You will enjoy your life along the way. But youll neither feel wealthy nor as if you were enduring hardship. You should never feel wealthy at all until you actually are wealthy enough to accomplish your goals.

Summing it up

That’s my take it on it. I started with less than nothing, and lived slightly above my means. I redefined my means, and then lived within them. I wont lie to you — for the first year or so, I did find this difficult to do. However, once I got over that humped, it seemed easy.

It actually was all uphill from there since for over 10 years my savings as a percentage of real income was increasing each year. However, it felt all downhill (effort-wise) since my fictitious salary did rise slowly and steadily each year.

The only emotional hardship and challenge to will-power occurred when I sat down each year and decided how much of a raise to give my self in the next twelve months. As a boss, I was sometimes a real bastard. My virtual employer (me as boss) once gave me a 6% raise in a year that my real employer (the company I showed up at 5 days per week) gave me a 12% bonus and a 20% raise!

However, he (me) was right, and I did enjoy the extra few hundred a month in virtual salary and never missed the extra income since I never experienced having it.