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
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
http://www.nancyskitchen.com
