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Budgeting tips – sticking to your budget

Finance

Image by adriagarcia at Flickr.com
Image by adriagarcia at Flickr.com

If you are looking to get out of debt, or you are currently debt-free and want to stay that way, then it is important that you get a grip of  your financial situation and live within your means.

A good way to do this is to create a budget as this gives you a clear indication of  how much money is coming in, how much is going out and also highlights any areas where you may need to make cut backs should you be falling short each month.

Once you have sorted out the figures and made necessary amendments, for example paying bills by direct debit in order to make savings or cutting existing debts by carrying out a balance transfer to a lower rate credit card, it is time to start focussing on the lifestyle changes.

As you will find, it is one thing to create a budget and quite another to stick to it, but by adhering to the following   steps and exercising a certain amount of will power, you should be able to ensure that you live within your means and resist the urge to reach for that credit card.

Keep focussed

Before you start to look at how you can stick to your budget you need to clarify why you need to stick to your budget!

A budget can initially seem like something that has been devised with the sole intention of stopping you having fun and buying or doing the things that you want. So it is important to remember that, though some cutbacks may be necessary in the short term, a budget is a long-term strategy that will allow you to take control of your finances and, all being well, live a happy life that is free from the worry of excessive debt.

Change your habits

Unfortunately, a successful budget can require a change in lifestyle and this can be one of the most difficult things to adhere to.

For example, if you have previously enjoyed eating out regularly then you may have to make cut backs in this area to ensure that you are living within your means. But, instead of seeing this as a negative, try to focus on the positives and remember the reasons why you are budgeting.

And a change in habits doesn’t necessarily mean that you have to cut back on your enjoyment of life and it may actually open your eyes to other pursuits you may not have previously considered.

For example, instead of eating out try preparing a meal at home and turn your dining room into a restaurant. This means that you can still have the fine dining experience but at a fraction of the price and without the worry of making a reservation!

Shop smarter

Lists figure heavily when creating a personal budget and list-making is a habit that you should get used to when trying to stick to your budget.

When budgeting it is vitally important to avoid impulse buying and a great way to do this is to always make a list of things you need before you go shopping.

This means that you will have a clear idea of what you need and you will be less inclined to make random purchases that may just turn out to be an unnecessary drain on your finances. It’s also worth mentioning at this point that you should always differentiate and prioritise the things you need over the things you simply want.

If you are unsure how to make the distinction then put off making the purchase for a couple of days and then reconsider if you actually need it. This cooling off period will often convince you that you can do without it and save you money.

In addition, savings can be made on your shopping by simply swapping big name brands for supermarket own varieties, using discount coupons and looking for any special offers.

Overall, it is important to be fully focussed and committed to your budget plan and to be aware that a change in finances may require a change in lifestyle. But a few short term changes may well add up to better finances in the long term.

Article written by Les Roberts, budget reporter at Moneysupermarket.com.

 

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Tips to budget successfully

Finance

This is a guest post written by Andreas Nicolaides, a financial author for UK based MoneySupermarket.com.

Whether your aim is to save money for a special occasion or you just want to make sure you don’t have to struggle financially when it comes to the end of the month, a budget can be a saving grace. Budgets help us quickly and easily identify our total income and all our expenditure, allowing us to plan for the best and prepare for the worst financial situations.

Set yourself a target

 

If you have decided to set up a budget, then there must be a reason. Are you looking to save for an upcoming event? Or maybe you have realised that you are struggling to make your payments every month and you would like to feel more financially secure. Based on what you would like to get out of your budget, you should set yourself a specific, measurable objective.

My first objective I set for myself was to save $100 every month for a year. This sort of objective is easy to manage and easy to monitor and this is what we are trying to achieve. One important thing I would mention here is to ensure your objective is achievable; don’t set yourself a target that is too far out of your reach, being realistic is extremely important.

How do you set up your budget?

The main key thing when you start to put your budget together is to make sure you’re as honest as possible. Get yourself a pen and some paper and on one page detail all of your income. Include the obvious and also remember to include any benefits you are entitled too. Then grab another piece of paper and detail all of your monthly outgoings, remember to be honest and thorough and try not to forget anything. Once you have both figures, deduct your expenditure from your monthly income that will give you your monthly figure.

You have some extra cash?

 

If when you have your figure you realise that there is some cash left over, you can then decide what you want to do with it. My advice here depends on your own personal circumstances, for example if you have high levels of debt, your main aim should be tackle your high interest debt aggressively and as often as possible.

If you have some money left over and your aim is to save, then set up an interest bearing bank account. If you are based in the US then you could look to set up an LSA or lifetime savers account. In the UK we have the equivalent, that is called a cash ISA saving account.

No money left over?

 

If after working out your budget you find you have no money left over, then you need to do something about it. Debt is one of those things that won’t just disappear overnight; it’s something that takes time and commitment, but not giving up is paramount.

How to cut down your expenditures?

 

One of the main things you can do when you realise you are in a bad situation is to try and cut down on your expenditure. Here’s a couple of quick ways:

  • Use price comparison sites – These sites are great to check and see if you are paying too much on your bills, and if you are, you will have a list of fantastic options available for you to choose from. This is a great way of saving money on things like your car insurance, see here.
  • Sell unwanted items – Selling unwanted items is a quick way to making some cash, everyone has them around their home, so why not make use of them instead of letting them build up dust?
  • Cut down on your spending – Try to avoid buying luxuries and try to stick to a specific shopping list when out doing the weekly food shop, this will help you avoid unnecessary purchases

A budget is used by many just to monitor what they spend month to month, but I hope I have detailed how it can be a helpful financial tool that can help you reach your financial goals. I hope my tips to budget successfully will help you get started on your way to financial freedom.

 

Selling Your Car

Finance

English: Jalopy car in Joshua Tree National Pa...

English: Jalopy car in Joshua Tree National Park in Hidden Valley Campground (Photo credit: Wikipedia)

When it’s time to replace your car, most people focus on the new car, instead of the old, but that is ignoring real money.  Your old car–unless it has disintegrated–still has value.  Sometimes, it’s just time to ask yourself, “When should I sell my car?”

When you’re looking to sell your car (like with We Will Buy Your Car), you generally have several options:

  1. Tow & crush. If your car has been wrecked, doesn’t run, or is just old and beat up, you may be stuck with calling a junkyard and accepting $50 for them to pick up your car and crush it for scrap.
  2. Trade it in. This is probably the least hassle, but–other than #1–doesn’t pay well.  Dealerships are willing to pay something under what they will get at a wholesale auction, which is quite a bit less than the blue book value.
  3. Sell it yourself. Now you’re thinking, “He’s going to buy my car! Oh, bother.”  It can be a pain, but it’s also the best way to get a decent price for your wheels.

When you sell your car, there are a few things to keep in mind, much like when you sell something on Craigslist.

  • Don’t be alone. There are bad people in the world, but they don’t like witnesses.  Bad things are much less likely to happen if you have company.
  • Know your price. Specifically, know three price: your dream price, the price that would make you happy, and the absolute lowest price you are willing to accept.  Make sure you figure these numbers out ahead of time.  Know what you are comfortable with before it comes time to close the deal.
  • Check IDs. The buyer is going to want to test-drive your car.  That’s fine, but you want to make sure you know who is driving off in your car.  “Officer, Sumdood took my car.  He was wearing jeans.”  That won’t get your car back.
  • Clean it up. Get the car detailed before you show it to a potential buyer.   A sparkling-clean car will almost always bring in a few hundred extra dollars.  It’s well worth the expense.

Following this plan should make the sale go as smoothly as possible and bring you the most possible money.

Readers, what have you done to dispose of an old car?

This is a sponsored post written to provide some insight into the world of used car retail.

 

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Garage & Yard Sale Manual

Yard Sale Northern California May 2005. This i...
Image via Wikipedia

After months of research and planning I recently had a successful garage.  Here’s my how-to yard sale manual.

Step 1: Preparation. You can never be too prepared.   I detail advertising, setup, planning and more.

Step 1.5:  Marketing. Here is the text of the ads I placed.

Step 2: Management. Pricing, haggling, staffing, and other “Day Of” issues.

Step 3: Wrap-up. It’s done.  What now?

Finally, we’ve got a Page of Tips.  This is sure to grow over time.

 

 

The heat(er) is on! 5 winter home energy saving tips

Finance

This is a guest post.

Turning the heat on can strike fear into the hearts of many a home owner. Rising heating bills are not a thing of the past. They are present and there is no end in sight. Relief for high winter heat costs can be found in every leaky window, poorly sealed storm door, inaccurate thermostats and many other locations in and around your home. Seeking out the cheapest gas and electricity prices from local suppliers can help reduce total energy costs and should include home energy audits and payment plans to equalize summer and winter energy bills.

Top 5 Tips for Year Round Home Energy Savings

1. Obtain a free energy audit kit from your local electric or gas provider. Approach your home energy audit as a family. Involving children is one of the best ways to decrease overall energy consumption. Teach the kids about leaving doors open, leaving lights on and the television on when not in the room. Appoint an energy officer for the house who will be responsible for reminding family members about energy conserving activities.

2. Install a digital thermostat, which can be programmed to automatically raise or reduce home temperatures when the house is not occupied such as when parents are at work and the kids are at school. Lowering temperatures to 60 degrees on mild winter days for just six hours during the work day can save on your heating bills without compromising comfort. By limiting the time not to exceed six hours the cost for bringing the home back to acceptable living temperatures is minimal; much longer and the bounce back time is increased sufficiently to mitigate any daytime savings. Reducing overall temperatures by one degree Fahrenheit can save as much as three percent on the total heating bill. Reduce the household temperature by five degrees Fahrenheit and experience a 15 percent saving which is a number most families can easily live with.

3. Comparison shop for the cheapest gas and electricity from local private energy suppliers. Ask about payment plans, adjustable billing cycles and energy reform programs. State and local governments have options for lower income homes, providing subsidies for high winter heating bills. Grants for home improvement along with energy conservation tax credits, which can be applied to heating costs, are another way to reduce budget impacting heating bills this winter.

4. Close vents, use energy efficient space heaters and alternative heat sources for additional energy savings. Closing vents to unused rooms will reduce energy consumption for the entire house. Heating less square footage will require less energy. When closing vents, be sure to seal those rooms well. Install thermal window coverings to reduce heat loss and temperature fluctuations and reduce air exchange at door thresholds with the use of a draft dodger. Using an energy efficient space heater in cold rooms can improve comfort without increasing overall heating costs. Spaces such as basements and laundry rooms can benefit from temporary use of space heaters to increase temperatures for those rooms temporarily. Consider alternative heat sources such as wood stoves and fireplace inserts. Fireplaces are generally inefficient as heat sources. However, wood stoves using catalytic converters can have energy efficiency ratings that rival high tech heat pumps.

5. Appliance energy hogs such as hot water heaters, washers, dryers, ovens and dishwashers should be evaluated each season. Lowering the hot water heater temperature and insulating the water heater and the pipes can reduce energy consumption of this one appliance by as much as seven percent. Wash clothing on cold water settings whenever possible, reserving hot water for only items needing sterilization, such as sick room bedding or cloth diapers. Never start the dishwasher if it is not completely full. The same amount of water and energy will be used to wash five plates and three glasses and will be required to wash a full meal’s worth of dishes for a family of six.

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Make Extra Money Part 2: Niche Selection

Business, Finance

If you want to make money, help someone get healthy, wealthy or laid.

This section was quick.

Seriously, those three topics have been making people rich since the invention of rich.   Knowing that isn’t enough. If you want to make some money in the health niche, are you going to help people lose weight, add muscle, relieve stress, or reduce the symptoms of some unpleasant medical condition?   Those are called “sub-niches”.  (Side question: Viagra is a sub-niche of which topic?)

Still not enough.

If you’re going to offer a product to help lose weight, does it revolve around diet, exercise, or both?   For medical conditions, is it a way to soothe eczema, instructions for a diabetic diet, a cure for boils, or help with acne?  Those are micro-niches.

That’s where you want to be.  The “make money” niche is far too broad for anyone to effectively compete.  The “make money online” sub-niche is still crazy.  When you get to the “make money buying and selling websites” micro-niche, you’re in a territory that leaves room for competition, without costing thousands of dollars to get involved.

Remember that:  The more narrowly you define your niche market, the easier it is to compete. You can take that too far.  The “lose weight by eating nothing but onions, alfalfa, and imitation caramel sauce” micro-niche is probably too narrowly defined to have a market worth pursuing.  You need a micro-niche with buyers, preferably a lot of them.

Now the hard part.

How do you find a niche with a lot of potential customers?  Big companies pay millions of dollars every year to do that kind of market research.

Naturally, I recommend you spend millions of dollars on market research.

No?

Here’s the part where I make this entire series worth every penny you’ve paid.  Times 10.

Steal the research.

My favorite source of niche market research to steal is http://www.dummies.com/.    Click the link and notice all of the wonderful niches at the top of the page.  Jon Wiley & Sons, Inc. spends millions of dollars to know what topics will be good sellers.  They’ve been doing this a long time. Trust their work.

Niche Research
Click for full-size image

You don’t have to concentrate on the topics I’ve helpfully highlighted, but they will make it easier for you.  Other niches can be profitable, too.

Golf is a great example.  Golfers spend money to play the game.  You don’t become a golfer without having some discretionary money to spend on it.   I’d recommend against consumer electronics.  There is a lot of competition for anything popular, and most of that is available for free.   If you choose to promote some high-end gear using your Amazon affiliate link, you’re still only looking at a 3% commission.

I like to stick to topics that people “need” an answer for, and can find that answer in ebook form, since I will be promoting a specific product.

With that in mind, pick a topic, then click one of the links to the actual titles for sale.   The “best selling titles” links are a gold mine. You can jump straight to the dummies store, if you’d like.

Of the topics above, here’s how I would narrow it down:

1.  Business and Careers. The bestsellers here are Quickbooks and home buying.  I’m not interested in either topic, so I’ll go into “More titles”.   Here, the “urgent” niches look like job hunting and dealing with horrible coworkers.  I’m also going to throw “writing copy” into the list because it’s something I have a hard time with.

Bestsellers
Bestsellers

2.  Health and Fitness. My first thought was to do a site on diabetic cooking, but the cooking niche is too competitive.  Childhood obesity, detox diets and back pain remedies strike me as worth pursuing.  I’m leaning towards back pain, because I have a bad back.  When you’ve thrown your back out, you’ve got nothing to do but lie on the couch and look for ways to make the pain stop.  That’s urgency.

3.  Personal Finance. The topics that look like good bets are foreclosures and bankruptcies.    These are topics that can cost thousands of dollars if you get them wrong.  I hate to promote a bankruptcy, but some people are out of choices.    Foreclosure defense seems like a good choice.   Losing your home comes with a sense of urgency, and helping people stay in their home makes me feel good.

4.  Relationships and Family. Of these topics, divorce is probably a good seller.  Dating advice definitely is.   I’m not going to detail either one of those niches here.  Divorce is depressing and sex, while fun, isn’t a topic I’m going to get into here.   I try to be family friendly, most of the time.    Weddings are great topic.  Brides are planning to spend money and there’s no shortage of resources to promote.

So, the niches I’ve chosen are:

  • Back pain
  • Bankruptcy
  • Conflict resolution at work
  • Detox diets
  • Fat kids
  • Foreclosure avoidance
  • Job hunting
  • Weddings
  • Writing copy

I won’t be building 9 niche sites in this series.    From here, I’m going to explore effective keywords/search terms and good products to support.  There’s no guarantee I’ll find a good product with an affiliate program for a niche I’ve chosen that has keywords that are both highly searched and low competition, so I’m giving myself alternatives.

For those of you following along at home, take some time to find 5-10 niches you’d be willing to promote.

The important things to consider are:

1. Does it make me feel dirty to promote it?

2. Will there be customers willing to spend money on it?

3.  Will those customers have an urgent need to solve a problem?

I’ve built sites that ignore #3, and they don’t perform nearly as well as those that consider it.  When I do niche sites, I promote a specific product.  It’s pure affiliate marketing, so customers willing to spend money are necessarily my target audience.