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10 tips: How to cut cost, stretch budget dollars

Title: 10 ways to cut down expenses and stretching your budget dollars

[ 01/18/2012 ] The World Bank warned Wednesday of a possible slump in global economic growth and urged developing countries to prepare for shocks that could be more severe than the 2008 crisis.

For the United States, the bank cut this year's growth forecast to 2.2 percent from 2.9 percent and for 2013 to 2.4 percent from 2.7 percent.
As reasons, it cited the anticipated global slowdown and the on-going fight in Washington over spending and taxes.

[ 01/19/2012 ] The people in the know believe that Gas prices will rise to $4 a gallon and possibly even up to $5 dollars a gallon. Fears of not just another slow down but a recession are building.

While the world is scrambling to fix the economy and the rich fight to keep their millions: I thought to myself - What am I doing?

What am I doing financially to improve my situation, prepare for another national financial meltdown or possibly even a far greater devastating event? I decided to make some changes - some I have already been doing, others I just recently realized or learned myself. But I guess doing something now is better than doing nothing and expecting that the government will solve the problem [ we saw how that turned out - bail out the banks, banks hoarded money ] and I struggled even more with millions of other average Americans.

So, I came up with some ideas that I thought I could share with you: Don’t be offended.

"10 ways to cut down expenses and stretching your budget dollars"
I am going to try to generalize much of my points [ so you don't read a novel ] but still give you enough info. to get you to understand clearly how, what and the why I do it and feel it works for me. So counting down from 10 to 1 - lets start with:

10. Stop Spending
You would be surprised how difficult a concept this is with many people: stop spending?

If you are having financial difficulties [ not enough money ]. You’re first step should be to stop spending right? Wrong. I know people [ personally and up-close ] that have told me to my face that they’re in financial trouble and when I ask them what they are doing about it – they say, nothing. Or if they tell me that their cutting back – their actions say differently.

I have a family member who we will name Billy-bob. He spent years, on a weekly basis, telling me how he never had any money to pay his bills. He recently confided that he could not and was not paying his mortgage on his house and was facing foreclosure. But whenever I ask him what he is doing this week-end, his response –“oh, taking the motorcycle out to Orlando and possibly spending the week-end out there” – which he would and did.

Billy-bob would upset me so because he would give me these sad stories about his money woes and then if I called him to ask him where he is – he is out spending money. Hello, any one home? Have you lost your senses?

Every-one should have a cash-flow chart, something, anything – a budget that lets them know how much they make [ income ] and how much they spend [ bills, expenses, etc. ]. You should pay your bills, save some money and live “with-in” your means. This is not rocket science – if you find yourself in need, financial trouble where you are falling behind on bills, getting your lights cut off, wondering how you are going to pay your mortgage this month your first reaction should be to: Stop Spending.

That is the first thing you should do. I am not talking about stop paying your bills; I am talking about all the other things. Stop eating out, stop taking daily trips or week-end trips, stop going to the mall and acting like your plan was not to buy something. Stop spending Billy-bob!

You would be surprised how much money you would save.

Stop spending and take an assessment of what your doing. How your doing it and even why you might be doing it. But above all things – Stop spending.

9. Manage your money
Ok, sounds strange: Manage your Money. How am I supposed to save money by managing my money? Don’t I already do that? No you don’t. If you’re having money trouble’s it is usually because you probably don’t even track your money.

Ask yourself this question: How much of my money [ percentage wise ] do I spend in miscellanies items?

Do you know, probably not? Why? We don’t think about it. We all do it. We pay for everything with plastic, the debit card, credit card and other cards. For a long time I didn’t even write down what I spent on my check register – I went by faith. I should have money in there, right? Then you get a notice in the mail informing you that the bank charged you an overdraft fee [ $35 dollar fee ouch ].

When most Americans did everything by cash, it was easy – you put your hand in your pocket and you knew what you had. When you reached in and had no more you knew you were out. With these bank cards and check books – if you don’t keep track of what you have and what you spend, no one else will until it’s too late.

I have a family member – we will call her Sharon-tilla [ to protect the innocent ]. She would come and ask me for help [ you know, borrow cash ]. One day we sat down and we had a long discussion about her check book [ trying to help myself out cause I wanted to stop giving my money to her ].

What she would do, and this may sound funny but I am sure many others do this as well. She would play chicken with the bank. She would write checks, and she figured since it would take 3 days to clear that she was safe because she had 3 days till pay day. So the first mistake she was doing was spending money before she even had it. The second mistake is: she was forgetting that things have changed. Over time you now have checks that clear like cash, you have automatic withdrawals of payments, debit cards that take cash instantly out of your account. So, she started to fall into the overdraft bank fee trap. Did that stop her? No. She just started using the overdraft fee as a sort of mini-loan kind of scam. She would buy something knowing she has no money, the bank covers it, charges her a fee and she goes on.

Well, she was living in a house of cards [ just like the banks were in 2005 -2007 ] and it all came crashing down. When we finally got around to looking at her bank statements [ she kept no records ] I could see she was in deep doo-doo my friend. Every time she was paid, hundreds of dollars were going out seconds after her pay check was deposited. In fact, she was paying hundreds of dollars in over draft fees and this cycle she was in had been going on for several months now. Imagine, committing fraud [ writing bad checks ] because most or all of your pay went to cover your banks over draft fees. And your only excuse is: well I have to pay my light bill.

Sadly enough that game ended badly. Sharon-tilla had to admit her error and face up to the facts. It took her 4 months of difficult and extreme measures just to break even.

My father in-law used to tell all the kids – pay your bills and live with-in your means. He would rather do without, than to ruin his credit or his good name.
Sadly enough, most of us are to busy living the life [ what we believe to be the high life ] and have come to realize that we cannot live on credit alone.

Number ten was: Stop – stop what you are doing. Stop Spending.

Number nine is: Manage your finances. Figure out, track and know what your expenses are and what you make as income. Call it a budget. Call it a cash flow chart. Call it what you want but track your money, manage your money.

* Step 10 and nine can be done immediately if you are serious about changing your situation.

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