Thursday, January 29, 2009

Spend Intentionally

From Character First

Many individuals cringe at the idea, but a budget can help you develop the financial discipline to succeed.

Track Your Spending
Is your money consumed by impulse purchases, credit card bills, or banking fees? Use your credit card statements, receipts, and bills to keep track of every dollar you spend for two months. Calculate your monthly fixed and variable spending. Then calculate your monthly income, and compare numbers.

If your spending exceeds your income, look for places to cut spending. Identify non-essentials such as eating out, hobbies, name- brand coffee, and smoke breaks. Find less expensive alternatives, wait for sales, use coupons, or buy in bulk.

Make A Plan
Allocate money for each expense category. Save at least 10 percent of your income each month. Set aside additional money in order to prepare for unexpected circumstances. Put money aside for college tuition or other large expenses, and avoid heavy debt.

Pay your bills, then determine what you have left for other things. Pay extra on your credit cards until you pay them off; then pay the balance every month. Do not buy something unless you have the money to pay for it.

Cutting expenses does not mean cutting enjoyment. Go to the movies once instead of twice a week. Take advantage of free concerts, kids-eat-free deals, and free day at the zoo. Ride in one car instead of two when possible, and choose the one with better gas mileage.

Stick With It
Adjust your budget categories as necessary, but do not give up on cutting expenses or saving money. A little discipline now will eventually give you the freedom to go on that trip or buy that flat screen television.

Whatever stage of life you are in, using a spending plan now will give you the freedom to seize tomorrow's opportunities unhindered by financial worries.

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"Simplicity of living, if deliberately chosen, implies a compassionate approach to life. It means that we are choosing to live our daily lives with some degree of conscious appreciation of the condition of the rest of the world." Duane Elgin

"Do what is good with your own hands, so that you might earn something to give to the needy." Ephesians 4:28