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Frugal Budget
Basics
by Nattie Gilbert
Basic
Frugal Budgeting
1. Clarify
Your Income and Expenses: You can use basic
budgeting and frugal ideas to reduce your monthly
expenses and reach your financial goals. First,
list all sources of gross income. Second, list
all of your fixed expenses and subtract them
from your gross income. Fixed expenses include
savings, credit and loan payments, insurance
payments, mortgage or rent, and taxes. The amount
left is what you have for variable expenses.
Variable expenses, the easiest to reduce, include
groceries, clothing, auto expenses, eating out,
and entertainment.
2. Reduce
Fixed Expenses: Look at all of your bills to
see how you can reduce them. Do you need caller
id, HBO, and 4 monthly magazines that no one
is reading? One at a time, cancel extras you
don't need or use. Investigate insurance costs,
credit card interest rates, long distance charges,
etc. We now save $32 per month after switching
car insurance companies. Don't overwhelm yourself,
pick one area a month to look into and change
whatever is possible.
3. Track
Your Spending: Use a small notebook, your checkbook
register or financial software to track all
of your expenditures. I find it easier to use
a small notebook and the check register, because
I can carry it with me and stay current. Financial
software, like Quicken or Money 99, does an
excellent job and will even show your spending
graphically. Our biggest problem area was food
shopping. So I spent many hours researching
how to grocery shop more economically, and we
now spend about half as much as we were.
4. Analyze
Your Spending: After tracking all of your spending
habits for at least a month, look to see where
you can reduce your spending. Is your long distance
phone bill too high? You could change to a cheaper
long distance provider, reduce the number and
length of your calls, send emails or write instead.
Do you spend too much on lunches out? You could
pack you lunch -- even once or twice a week
helps. Do you spend too much on dinners out,
especially after hard work days? You could freeze
meals ahead and make it easy to pop dinner into
the oven or microwave. For example, make a double
batch of Sunday's spaghetti and thaw and reheat
the second one on Friday night after a long
rush hour.
5. How
to Reduce: Is there an area that you would like
to reduce, but don't know how? Look it up on
the Internet. For example, you spent entirely
too much on cosmetics recently. Do an online
search for frugal or homemade cosmetics to find
some innovative and fun ways to spend less in
the future.
6. Reward
Yourself: Frugality takes time and effort. Reward
yourself for your progress, but not with financial
rewards. For example, play soft music and spend
the evening lying in bed reading a good book
-- borrowed from the library, of course!
Nattie
Gilbert may be contacted at
http://www.geocities.com/jnacd5
jnacd5@yahoo.com.
Email Address
to view more of their articles.
Nattie is married to Jeff and they live in Longmont,
Colorado, with their three children Alicia,
Michael, and Dalton. She is a college senior
who began writing on the Internet as part of
her schooling. In addition to family, school,
and writing, Nattie works fulltime as a book
editor for netLibrary.com
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