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10 tips: How to cut cost, stretch budget dollars pt 4

5. Create a plan and stick to the plan

Yes, your thinking – this doesn’t help me save money, but you are wrong.
Why do people fail, because they fail to plan?

In order to get where your going you need to know how to get there. I to many times in the past often planned on doing this, achieve that but always failed to make plans. Plans, it helps you figure out where you start, how you progress and when you finish. Am I right. Imagine you enter a race and they tell you to start running, you ask in what direction and they say which ever direction you want. You ask for how long and they answer – I don’t know, until you get tired. Chances are you are not going very far. Making plans is what allows you to accomplish what you need or desire.

Lets say your goal is to go on a dream vacation. You have to know first – how much it will cost. Then you will have to know how much money you have left over after to pay all your bills and expenses in order to know if you have extra to save toward this or if you need to make extra money [ income ]. Then you have to figure out depending on how much it is [ dream vacation] and how much you can save for it, how long it will take to reach that goal. If vacation will cost $2,000 dollars and I can easily save $100 dollars a month then it will take 20 months to achieve my goal. If I want to speed up the time I know that I have to find a way to increase what I am saving [ without affecting my ability to pay my bills or live ].

So how does planning save you money? You do not affect your finances by buying something you cannot afford. You compensate where needed in order to get what you need and you wait for the right time to pay for it. Planning helps avoid impulse buying, using credit to buy what you cannot afford, and losing money on deposits that disappear because we find ourselves unable to complete our goal. A plan also keeps you honest – like a check book registrar: you have a balance a write a check and deduct the check. You can call the bank and get a balance, but you know it is not accurate because you have that check that has not cleared. A plan does that for you – if you have to save $100 everyone to make that twenty month deal line, you know that if you skip a month – it will cost you another month of waiting.

I remember one family camping trip, my wife bought all these things we needed to go camping, you now, ahead of schedule [ to save money and all that ] and then we ran into some money issues and had to pay for an unexpected hospital visit. We almost had to cancel our trip because we didn’t have enough money to pay for the camping spot. Sounds ridiculous but it’s true. She spent our extra money on all these camping gear and stuff and thought, Oh, well save the money for paying for the campsite when it comes close to the time we have to go – imagine how sad that would have been if we sat at home with all this camping gear, already schedule time off from work and we could afford to even pay for the camp site. Plan, plan, and execute your plan.

4. Stay Home
What I mean: after you figured out what to sacrifice, be it you or each individual in your house hold - You should now make plans around staying in instead of going out. We all do it - we all get that urge to go out and have a pizza, a burger anything just to get out of the house.

I was on a trip with my father-in-law once and he was explaining to me how the move had changed his life, especially how he had to rein in his budget. He explained to me that now that he moved to Florida he was spending more money than he did when he lived in New York. After going over some of the details I pointed out to him that he had it all wrong. He believed that he was spending more and that living with me [ us ] while he waited for his home to be remolded was causing him to spend more money. That in New York he didn’t buy groceries that he was too busy and never spent as much as he does here in Florida. I pointed out to him that the reason it looked like you didn’t spend much on groceries was because he was never home and ate out every night. The reason his fridge was empty was because he ate out. The reason your spending more money is not on buying groceries, it’s because you buy groceries, eat out and are paying for all these remodeling stuff on your home. On top of that, you have a lot of visitors who you invite over [ since you haven’t seen them in years ] and you feed them. So what do you expect? I’m not saying you can’t enjoy life, go to a movie, have a nice dinner, buy your self a nice dress or shirt. All I am saying is, if you go out every day and spend money when you live on a fixed income – what do you expect to happen. I have this saying I share with my wife when she ask me for money I don’t have to give: X amount of money in minus X amount of money out equals zero dollars left. She hates it, but it’s my way of telling her “ there is nothing I can do about it”. I would love to buy you things whenever you want them, but let’s face it, I live on a fixed income too. I’m not retired but I have a job that pays me X amount of dollars every pay day. If I spend X on burgers and friends don’t expect me to have the same amount of money left to buy the groceries.

You would be surprised how much money you would save if you stayed home and did a lot more things with your kids or significant other. People are always talking about that they never have time – could it be that you fill up your time with all these things you probably can do without?

A perfect example is a neighbor of mine. He has four boys a dog and a lovely wife. He coaches football after work and his kids play at minimum to different kinds of sports. They are rarely ever home. His job started cutting back on his overtime and money got a bit tight so his wife got a job. Then several months later I hear him talking about how he may lose his home. Then I hear that he lost his job, it was sad – terrible. But the one thing that has not changed was their lifestyle. They still have all their kids in several sports teams, traveling all day long and eating out every day of the week. On Saturdays they leave at 6 in the morning and don’t return until after five o’clock. I thought it crazy to keep that kind of life when he made good money; I am trying to figure out how he keeps it now that only his wife works.

Me and my wife occasionally try to save money by turning out all the lights, TV’s, and so forth and we play board games with our children. We built a simple campfire spot in the backyard and we go out there every once in a while and talk. We take walks and we visits friends – all these things we do build family bonds and surprise – don’t cost a single red cent.
Try it, you will be surprised.

3. Do it yourself
This one is a given isn't it. Usually when people get short on money, the wallet gets thin and your cash strapped - you automatically start to think - I can't afford to pay someone to mow my lawn, I guess I can do that myself?

This one will be short and sweet.

There are a lot of things we pay other people to do for us that we can do ourselves. We pay people to mow our lawn, wash our cars, and even watch our own children. I paid a man once $300 dollars to weld a crack in my shower head pipe, then seven months later I replaced the entire thing for less than $60 dollars – go figure. Not all of us are mechanically inclined or handy with tools – but there are a lot of things that we can do for ourselves that ready pay others to do. So, think of this: if you do not know how to fix it, do you have a family member or a friend that does? Get your children to mow the lawn and wash the car. Look around and check, if something comes up – before you call a professional, call your friends, family and ask them, can you help me out?

2. Pay off your debts
Sounds strange but part of saving money is also getting rid of your debt. Debt as in credit: credit cards, store credit, loans and so forth. My wife once took out a "payday loan", she borrowed three hundred dollars and being tight she paid it back in installment payments - she borrowed $300 and basically paid back in interest ….. - Wait for it ……. - $400 dollars.

Credit cards, loans - these kinds of debt carries with it compounded interest that builds up. So the best way to cut your expenses and save money is to cut down and pay off your debt. I suggest you start slow and with your lowest debt.
I learned to pay the minimum on my highest credit bills and take one small credit card or loan that had the smallest balance [ compared to the rest ] and put as much as I could toward paying that off. Then when that one is paid off you take the next one and add what you were putting towards the one you paid off [ ie. adding minimum and old credit card amount ] to quickly pay off this credit and so forth.
Ofcourse - the given should be that you do not create more or new debt. It profits you nothing if you pay off the card to go rack up another debt.

Side Note: Is debt bad?
Debt as in credit itself no is not bad. But there is a difference between good and bad credit - debt. Good debt is when you take a loan to start a business and that business pays for the loan and gives you a profit. Bad debt is: a credit card that you used to buy junk and stuff that you no longer even own [ something that does not pay for itself ].

1. Make more money
Make more money – I’m confused? I thought you said save money, not make money.
No matter how much we try to save and stretch our ever shrinking dollar, the only way we can get ahead is by, making extra money. One of the most important things about any budget or financial plan is to save. How can you save when more often than not you barely have a thin dime after your done paying all the bills? Plus, any good financial advisor is going to tell you to save money for retirement, unexpected financial emergencies and regular saving.

I don't know about you, but usually I have a lot of months that end in a zero balance leaving me nothing to save, and the only solution for that is, while cutting back on expenses I have to increase my income.

How? Well I leave that up to you: a second job, selling your ware n tares, whatever you can do. But, the goal is to save that extra cash not to spend it. It should not be a surprise to anyone that if you are short on cash you need to make more of it. The problem is that most people make extra cash to spend - so therefore remain in the same predicament they were in when they took that second job in order to make more money.

It was be nice to believe that all we had to do was cut our bills and expenses and we could save the rest. But the reality is we are more often than not so behind on our bills that we not only need to cut expenses but we need to make more income in order to just break even.

These are my 10 ways to cut down expenses and stretching your budget dollars. I hope you enjoyed it, are able to use and benefit from it, and if you have any tips of your own please feel free to share with us. I would be glad to hear from you.

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