A Penny Saved Is A Penny Earned - Budget To Include Savings
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If you're like most folks, you can't imagine where you can cut your budget to create a little savings account, or safety net. Even a few dollars seems impossible to squeeze out of your already squeezed budget. Is it possible to clip even more coupons for groceries or trim even more spending from your budget? I'm here to say that without an emergency fund, that unexpected expense will destroy your budget and you won't have to worry about saving money anymore. There won't be any to save.
You are not alone. If your budget looks like most household budgets, you don't have any money left after payday. If you have a few pennies left, you'll buy some groceries with it or pay a little extra on a bill. Why would you even consider putting those extra pennies away in a savings account? Why shouldn't you pay a little extra toward a bill or buy something you need with the extra money? You're also wondering how, even if you wanted to, you would be able to stick a few dollars aside. Well, there are some good reasons why and some hard decisions to make as to how.
1) Why does my budget need a savings plan? If your budget is all neat and tidy, and you are meeting all your obligations, you probably feel pretty comfortable. As it turns out, no matter how neat that budget appears to be, life will most definitely mess it up. Consider one car repair of $600, or one emergency room bill for $1200. Do you borrow the money to deal with these emergencies? If you do, you'll be looking at possibly 18 - 20% interest, even if you can get the money. What are you going to drive to work if you don't borrow the money to repair your car? Now, your nice, neat budget is being decimated by these unforeseen expenses and you are left with hard decisions about which fixed expenses have to wait for their payment. That means late charges, extra interest, and overage charges. These are the killers to, not only your budget, but your family's financial safety.
2) How can my family budget possibly include a savings plan? You need to put savings first, that's how. It's difficult, and sometimes painful, to realize that without taking a percentage right off the top of your take-home pay, you never will grow a savings fund. We can always find ways to spend money if we have it, so removing it from our budget makes sense. Once you deduct a percentage to save, change your net income to reflect your new take-home pay. Then, subtract your fixed expenses like rent, mortgage, heat, lights, insurance, and the like. Look at what you have left and estimate how much of that money you'll need for groceries, gas, clothing, and other flexible expenses. Adjust and re-adjust until you're comfortable with the money needed to live. But, leave the savings alone. See if you can't get through your first few months with the new scaled-back budget. It might hurt a little, but not as much as it would if you were faced with an emergency and no way out.
It's true that many families are finding it difficult even to pay bills and buy necessities, let alone save some money, too. If this is your situation, you may need to rethink your entire lifestyle. Your family's well-being cannot survive without a savings plan, that fact has already been established. In this case, there are some tough decisions to make. You have two options to consider. You need to spend less money, earn more money, and possibly both. Living the lifestyle you currently live, can you put money aside in savings? Do you bring in enough money to put some of it in an emergency savings account? If not, you need to change something.
Consider your lifestyle. There are many ways you can spend less money. Living a more frugal lifestyle is one avenue you will absolutely need to explore. Walk, don't drive, cook at home, pack your lunch, shop at thrift stores, cut out luxury beverages and fast food, and recycle your clothing. Consignment shops are a great way to clothe your family without destroying your budget. Shop the cut-price stores for your everyday paper products, soap, kitchen ware, or other necessities that add up so fast and take a big chunk out of your grocery budget. These are just a few ways to change your spending habits and live frugally.
You may need to earn more money. After you establish your budget and make all the cuts you possibly can, there may be a problem that continues to stare you in the face. You need more money. If this is the situation, don't panic. There are ways to subsidize your income, but it will take some effort. Networking is your first chore. Let people you trust know that you are looking for ways to make money. Tell them what your availabilty is and where your talents lie. You may not be able to commit to another regular job, but you may find that people are looking for weekend help, tutoring, drivers, cooks, cabin cleaners, and any number of situations that you could fit into your schedule and make some much needed cash. It may not be glamorous, but neither is failing to support your family when an emergency arises.
Your family budget is more than an outline of how much to pay each month in order to get your bills paid on time. It's a series of challenges you need to face to gain control of your finances. You may need to make some changes in the way your family lives in order to make your savings plan work. Remind your family that this is a plan for financial freedom. Without an emergency savings plan, your financial freedom may go up in smoke. Start slowly if needed, but start. Having that cushion to protect your family means more than preserving your budget... it could mean saving your family from financial disaster.
Article Source: Articlelogy.com
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