Budgeting

BUDGET.

Everyone hates that word. Why should you have a budget?

Without a budget, you may save nothing, despite your bargain-hunting and coupon-clipping. You need a system to track your income and spending. I am not going to tell you what your budget should look like. That is a personal issue, unique to each family. There are many resources that can help you create a budget for your household. I will tell you that with a little effort, you can save a substantial amount on your grocery and household items.

I'll just address your grocery budget, which includes everyday household items like shampoo, laundry soap, etc. Start by averaging the amount you've spent over the last 6-8 weeks. Go slowly. Plan to shave 5% or 10% at first, and work on getting that down to 50% over time, once you've learned the system, and have a chance to stock up a bit on staples.

I found a great tool for tracking my savings. It's a downloadable Excel file from The Coupon Project. Each time I shop, I enter the information from my receipt and it calculates my savings. I love seeing how much I save and my actual-to-budget spending all in one place. Go here to check it out and download it for FREE.

Another tool for budgeting is meal planning. If you take a few minutes each week when making out your shopping list to make a menu plan, you will be more likely to stick to your food budget. You will make one trip to shop for all the ingredients you will need, and since they are readily available in your frig you will be less able to justify running through the drive-through. MoneySavingMom has several menu planning forms that you can download for FREE here. Remember to look in your refrigerator, freezer and cupboards first when starting your menu plan. Use what you have. Then look at the weekly ads and compare them to your coupons, or a coupon database site like the one at The Frugal Girls. I use Grocery Smarts to see the best sale/coupon combinations every week.

Unless you are very disciplined you may find it very hard to stick to your budget when you use a credit card to pay for your groceries. Even if you pay off your balances every month, you may still be spending too much because you are not paying with cash. Try the envelope method for a few months and I'll bet you see significant savings.I'll explain the envelope method in my next post.