It is every one dream being a millionaire and retiring with a healthy bank account, but how many people can actually achieve it? So few. This is largely due to lack of discipline in building up their retirement fund and poor spending habits. While building a retirement fund requires time, you can accelerate the process by making incremental but positive changes in your spending habits. Here are seven ways that you can change your daily lifestyle for more positive results in your spending habits:
1. Have you ever noticed how much time you spend sitting in front of the television? The longer you sit, the worse it is for your blood circulation. Besides, the time you free up can be used for more useful tasks such as teaching your kids or learning a new skill.
2. If you are an avid reader, use the public library whenever possible. There is no need to buy the latest books from bookstores like Borders unless it is in a category that does not fit into a public library. The public library will usually acquire popular titles after some times. Learn to be patient.
3. If you are a smoker, start reducing the number of cigarettes you smoke each day. Over time, you may be able to quit smoking completely. Besides saving money by not buying any more cigarettes, your health will also improve and this means a huge saving in your medical bills.
4. Use a bicycle if the destination is within 30 minutes by car. This helps promote blood circulation in your body and also reduces environmental pollution. You can also save on gasoline and parking fees.
5. Dine at home more frequently. You can experiment with different recipes and save some money at the same time. In addition, you are honing your cooking skills and this could be very useful for the home dining experience.
6. Bring your own coffee to office. Many people like to drop by a Starbucks or similar coffee outlet and end up spending a few dollars or more on a cup of coffee. You can potentially save many dollars each week just by making your own coffee at home and bringing it to your work place in a Thermos. Besides, who knows, it may taste better than the coffee from Starbucks! If you really cannot live without Starbucks coffee, consider getting a Starbucks rebate card. You can use the rebates to redeem free Starbucks coffee after you have accumulated enough points.
7. Do more walking than driving. If you can reach your destination within ten minutes by car, consider leaving the car behind and walk instead. You will save money on gasoline and parking fees. This can easily add up to a few thousand dollars a year.
These seven ways are a good start for changing unhealthy spending habits. However, you should continue to research and incorporate more healthy habits that contribute to the building of your retirement fund. By re-investing the money saved from using these tips, you will be many steps ahead of your peers and closer to your retirement goals.
Money is an essential element in every body’s life. It is the one that we exchange to get all the necessary things in life. And that is exactly the reason why we work all day and sometimes night. Since the flow of money in one’s life is not uniform, it is only prudent to save some money for the crunch days. Economics permits one to spend his/her money in any amount as he/she wishes. But how rationally one could plan so as to maintain a minimum level of backup in any given day is directly linked with his/her ability to save.
In daily life, even if we know that we are spending money to buy things we need, most of us tend to over see the fact that more than 50% of the spending is for purposes that are quite unnecessary or those expenditures can be avoided without affecting one’s basic life style. Exactly this is the point from where one should start thinking of saving money.
Distinguish between and clearly understand your needs and wants. Needs are those things one require to sustain his/her basic needs. Want on the other hand refers to anything that is not an absolute necessity but which presence enhances one’s way of life. For example, a car can be a need but a $40,000 SUV is a want.
It is a human nature to insist on the best and the biggest even if the same quality is available at a lower cost. Spending $100 in a posh restaurant when one can afford the same sumptuous meal at $20 or buying a $20 shirt with a $30 trendy label attached all belong to this category of “keeping up with the Joneses”. A bit of intelligent spending here can save a lot.
It is a good idea to try a commodity and get a feel of it before actually buying one. Because there is no point in buying something you may never use or hardly use. Such an analysis is relevant especially when the item under consideration is a costly one. Rent one, borrow one, and try one out before making the final call.
Mortgages can easily be the biggest single expense most families have in their monthly budget. Here, zeroing on the best deal is where the trick lies. Calculated comparisons can make a difference of few thousand dollars in the entire deal. Another big expense is linked with the vehicles a person owns. One should see if he/she is getting the best deal on the maintenance, insurance and repairs.
True, food is a need as well as a recurring expense. Keeping a check over the money spend on food – to a necessary extend – can make a big difference in the money one could save at the end of the month. Plan food purchases in advance, go for generics or store brands and stock up the items that you regularly use when available on sale.
Another expenditure that drains a lot of money is one’s fascination for clothes. Unlike electronic goods, the price of clothes is continuously on an upward spiral. Hence it is a good idea to buy quality clothes that lasts a longer period. Such clothes are better than the ‘throw away’ types. The cost of clothes is not going to come down either. Therefore, buying in advance for a season ahead is a logical correct step. But never over do it. Getting clothes for 5 years in advance is stupid!
Telephone is a common thing in every house hold. This is one department where money drains like an open tap. Though local phone service has a fixed price long distance calls matters. Shop around to find out the best deal as far as the service provider is concerned. Keep in mind, a saving of $16.75 a month can add up to $200 a year.
If you are a travel addict, travel expenses can make a big difference if not having the right travel agent. Even if it is the same place, airline, hotel or car rental, the difference between two travelers can easily exceed $1000. Keep one’s eyes and ears open when hunting for a traveler.
Remember, saving money is not putting all the dollars that one earns in his/her savings account. But it is all about intelligently spending the bucks, at the same keeping a check on all the unnecessary expenses. Good Luck!
This is probably the most requested topic that I receive, normally after someone gets a large unexpected expense, or they start thinking about retirement and realize that they have saved a woefully inadequate amount of money.
I recommend using a monthly time-frame to look at your cash inflows and outflows, because most bills are monthly and four weeks is a short planning period that most people can manage. The first thing to do is determine your monthly after-tax income. Usually, this is the amount of money from your paycheck that gets deposited into your checking account. If your income is variable, then use an average of the last three months. (Any savings account interest income would be a bonus.) Next, list out your fixed monthly expenses, such as rent, mortgage, car payment, phone, electric bill, etc. All of these numbers can be changed in the long-term, but first you need to determine a baseline budget of where you are right now.
Make sure you include all of your utilities; some are only paid quarterly or annually, like car insurance, the water bill, or an association fee. Take these expenses and calculate what they would be on a monthly basis. For example, if your water bill comes quarterly, divide it by 3. If you have semi-annual car insurance, then divide it by 6.
So now you have your fixed monthly income and your fixed monthly expenses. Deduct one from the other, and you have the variable amount of money that you are free to spend any way you want for the remainder of the month. From this remaining amount of money, start listing out your main categories of variable spending: groceries, entertainment, medical expenses, clothing, dry cleaning, personal care (haircut, nails, etc.), and gifts. Take each of these variable expenses and put an amount next to them that you think represents your average monthly spending for that category.
Make as many subcategories as you need to make an accurate estimate. The more precise it is for your spending habits, the more effective it will be for you. For example, food can be broken down by grocery store/fast food/dining out/work lunch/etc. Then go through the last few months of your checkbook and credit card statement looking for any spending that hasn’t been covered so far that you need to include for your situation.
Now you should have a total number for your monthly income, total monthly fixed expenses, and total monthly variable expenses. The moment of truth is when you deduct the two expenses from your income to see if there is anything left over. Don’t panic if it is a negative number – it is far better to discover this out now, rather than building up credit card debt later. Most people comment somewhere along this process, “Oh, so that is where my money is going. I had no idea I spent so much on that!”
Seeing all the numbers in black & white can help you prioritize (and negotiate with all the other spenders in the family). From this beginning budget, you can start to set monthly targets for spending categories, you can focus on reducing the largest expenses, and find areas where you should start doing some price-comparison shopping. And did I mention that saving a 5-15% of your income should be an additional fixed expense? Yes, you need to pay yourself first!
Having a budget is the critical first tool in managing your money. Wielding this tool allows you to finally start making financial decisions based on the facts instead of fiction. You can plan for expenses instead of being caught by surprise. And most importantly, figure out how to move forward with goals like a big vacation, a new car, or investing.
So you’ve made your budget and it looks good on paper. Great! Now it is time to implement it. But are you ready to follow the budget you’ve developed? Here are some helpful tips to keep you on track with your budget.
1. Determine why you made a budget. There is a reason you have put time into developing your budget, now you need to put into writing what your goals are. Do you want to be debt free, live on one income, or save for retirement? Make this into your personal or family financial mission statement. Write it down or type it up nicely and then have it laminated and display it in a prominent place where you can see it often. Many times we just need a reminder to ourselves for why we are doing a particular thing, and that can be just enough incentive when things get tough.
2. Set small range goals so you can see progress. It can be very difficult to keep up the discipline necessary to stay on budget if you can’t see any measurable progress. Develop some short term goals that you can celebrate meeting. If your goal has been to reduce your grocery spending by $100 per month, then your weekly goal would be to cut grocery costs by $25. Likewise, if your goal is to pay off debt, make a chart to show how much you’ve paid off. Reward charts just aren’t for children! Use a type of chart where you can color in a bar to show your progress, and then color it in every time you make a payment so you can see the progress you are making. Put it up on your refrigerator or bathroom mirror as a reminder that your hard work is paying off!
3. Identify your weak spots and develop a plan to battle them. In sticking to your budget, you need a clear idea of where you may be tempted to break the budget. If you are prone to impulse spending, then you must remove that temptation from yourself. If you go window shopping, leave your credit cards and check book at home! Especially in the early days of sticking to your budget, it is important to re-train yourself to curb spending.
Making a budget is really the easy part in financial management. It is sticking to the budget and making your spending match your plan that is the difficult process. By disciplining yourself and retraining your spending habits, you can achieve your budget goals.
Do you run out of money before you run out of month? Do you wonder where your money goes each month? Do you struggle to find money to invest for retirement, emergencies and other financial goals? Here are 10 tips to cut your spending and stretch your dollar to the max:
1. Consider dropping your home telephone line. Your cell phone is probably all you really need, and most likely it has free long distance. You could save $30 or more per month by dropping your “land line”.
2. Cut back on trips to Starbucks or other premium coffee shops. Often called the “latte factor”, spending several dollars per day on luxuries like premium coffee can really add up. For example, if you spend $4 for a cappuccino five times a week for 50 weeks out of the year (you’re on vacation the other two weeks), you would spend $1,000 in a year. Try treating your trip to Starbucks as a treat instead of a habit. You’ll save money and probably lose weight too!
3. Pay your mortgage payment bi-weekly instead of monthly. You’ll pay less interest and pay off your mortgage faster.
4. Carry cash instead of credit cards. Psychologically it’s harder to spend cash than it is to use the credit card. You’ll spend less and save on interest charges.
5. Use the “envelope system” for groceries, dining out, entertainment, and other discretionary spending categories. This will help you track how much you spend in these categories as well as prioritizing your spending.
6. Raise the deductible on your homeowners and auto insurance policies. It’s not wise to file claims for small losses anyway (insurance companies love to raise rates after you file a claim), so a higher deductible will save you money now and in the future.
7. Buy regular gas instead of premium. Most cars don’t need premium gasoline. Also, take public transportation if it’s available in your area. Take advantage of “park and ride” and carpooling options.
8. Plan your purchases to avoid impulse buying. Take a list with you to the grocery store and stick with it. Studies show that impulse buying can add $10-50 to your grocery bill – ouch!
9. Go to the library instead of the bookstore. If you’re an avid reader, give yourself a book budget for books that you will want to keep, and go to the library for everything else.
10. Take a vacation at home. Check out all the local sites and happenings. You’ll rediscover your hometown and save on travel and hotel costs.
These are just a handful of ways you can cut spending and stretch your dollars, but if you follow these tips you’ll discover you have more money at the end of each month to apply to other financial goals, such as saving for college, retirement or just for a rainy day.
Task Based Budgeting in Organizations
Task based budgeting is not brand-new. As early as 1990, some companies in nations like the USA as well as Australia executed this brand-new budgeting program to change the recognized as well as old approach of budgeting, the “line thing budgeting.”
Task based budgeting is a technique of budgeting in which tasks that sustain
expenses in each feature of a company are developed as well as connections are specified in between tasks. This details is after that utilized to choose just how much source must be designated to every task.
To put it simply, task based budgeting is budgeting, preparation as well as regulating by tasks as opposed to price components of a company. For individuals of this budgeting program, they declare that it involves everybody in considering just how they can much better develop worth for company. It creates a versatile spending plan based upon task workload that is not as stiff as journal of the line product budgeting that pre-identifies prices even though that expense might not serve in any way.
Activity-based budgeting is just arranged sound judgment. A lot more especially, task based budgeting is a method for improving the precision of monetary projections as well as boosting administration understanding. When automated, task based budgeting can quickly as well as precisely generate monetary strategies and also versions based upon differing degrees of quantity presumptions.
Task based budgeting likewise can remove a lot of the laborious operate in standard budgeting. Task based budgeting examines the solutions or items to be created, what tasks are called for to generate those services or products, as well as what sources require to be allocated to do those tasks. Put simply, task based budgeting is the opposite of the activity-based setting you back procedure to create monetary strategies as well as budget plans.
With the introduction of effective and also low-cost data source systems, task based budgeting is enabling companies to decrease expenses, much better use sources, and also attain tactical purposes.
The Australian National Audit Office has actually recognized the benefits of task based budgeting:
– Output expenses are sustained by a routine of set you back tasks
– Opportunities to take a look at job procedures
– Identifies non value-adding tasks that can be removed
– Basis of an efficiency dimension system as well as straight web link in between calculated
objectives as well as functional truths
– Enables expense accounts to be taken care of
– Accurate setting you back information for functional administration
– Costs are clear, workable as well as easy to understand
– Activity meaning might come to be as well thorough as well as the version might come to be tough and also intricate to keep
– Underestimation of the job of gathering task motorist information
– Implementation might be thought about a monetary administration “trend” and also there wants dedication from functional supervisors
Task Based Budgeting Disadvantages
– Usually needs acquiring Activity Based Budgeting software program
– Requires training of all supervisors consisting of budgeting division
– Requires individuals to truly comprehend what drives their spending plan
– Eliminates justification that task quantity transformed since it makes noticeable quantity modifications
– Requires everybody to approximate or accumulate task quantity
By comprehending just how sources are changed right into solutions or items, as well as by focusing on the price of tasks, task based budgeting assists an organization to acquire a greater understanding of just how prices act in their company as well as which tasks develop considerable quantities of expense. Organizations can after that start to regulate their expenses based intangible tasks as opposed to reasonably uninformative basic journal or expense centre reports.
In various other words, task based budgeting is budgeting, preparation as well as managing by tasks instead than price aspects of a company. It establishes a versatile budget plan based on task job tons that is not as stiff as journal of the line product budgeting that pre-identifies expenses even though that price might not be of usage at all.
When automated, task based budgeting can quickly as well as precisely generate economic strategies as well as designs based on differing degrees of quantity presumptions.
Task based budgeting likewise can get rid of a lot of the laborious job in conventional budgeting. Task based budgeting evaluates the solutions or items to be generated, what tasks are called for to generate those items or solutions, and also what sources require to be allocated to carry out those tasks.