Add to that we are constantly bombarded with marketing and advertising that alters our perceptions even more by saying we are soo busy that we need this more expensive use’n’toss tool to cut our time doing something; that this more expensive pre-prepared food is needed to get a meal on the table in a timely fashion; or we aren’t showing our happiness and success unless we drive an expensive vehicle or live in an expensive house and so on.
Yet studies have shown that we Americans average about 35-40 hours per week of free time; our work hours have been decreasing steadily for the past 40 years, we tend to overestimate our work hours by 5%-10% and 50+% of our free time is spent in front of the TV!
To “find” more time see Time – To Catch It, Ya Gotta Track It
Many “pros” will tell you become debt free. I find this just about impossible, since most of us will have at minimum, a mortgage and vehicle loan. However becoming as debt free as possible is a big step to becoming self-reliant and prepared.
That’s right we need a budget. I know, this is a pain in the arse, however the experts all agree on this one aspect to saving money and I do too.
For tips and tricks see Be In Control of Your Essentials & Desires
Decide on Your Priorities: Different people have different priorities when it comes to saving money and what to save money for, so it makes sense to decide which savings goals are most important to you. Are you saving for retirement? A vacation? Preparedness? A new car? A combination of these?
Remember that setting priorities means making choices. If you want to focus on saving for retirement, some other goals might have to take a back seat while you make sure you're hitting your top targets.
- Determine how long you can wait to save up for a particular goal.
- How much you can and want to put away each month to reach it.
Define your “normal” monthly expenses: loans, mortgage, utilities, insurance, medical/dental, food, TV/Phone/Internet services, regular household and yard maintenance and the like.
- For loans or mortgages; list the minimum amount that is due each month.
- For Insurance; check out the various payment options and amounts. (Many are lower if you pay in “bulk” quarterly or annually. If you make this change, be sure to calculate how much you need to set aside each month to pay the quarterly or annual amount.)
Define your earnings: Include any interest on accounts, stocks and bonds and the like.
Get Financially Organized: This will eliminate making the mistake of missing a payment and will help you determine what is due when and how to schedule setting monies aside to pay the expenses.
If you do miss a payment, call your creditor and ask to have the penalty removed. They’ll usually accommodate the request, at least the first time.
Record What You Earn and Spend for one month: Keep a record of everything. That means every coffee, every newspaper and every snack you purchase for the entire month; every “win” in the office pool or lottery. For purchases collect receipts for every expense, put them in an envelope and receipts at the end of the month.
You may find a lot of “small” expenses that add up to big time savings if you, say eat out one time less each week or get your hair and nails done every 6 weeks instead of every 4 weeks.
Once you have your data, organize these numbers by category—for example: gas, groceries, mortgage, paycheck, lotto win and so on—and get the total amount for each.
Next week we'll cover Saving Goals ;-}