Search Results for: budget

How to Live Like a Prince on a Pauper’s Budget

March 1, 2021 By Justin Weinger Leave a Comment

Being financially savvy does not mean that you have to deprive yourself of the finer things in life. It simply means that you have to identify what goods and services are genuinely important to you and then find a way to get those goods and services at a great price. You should even think of these small luxuries as investments because the truth is that you are far more likely to stick to a well-thought-out financial plan if you are living a comfortable life.

Embrace small luxuries that mean a lot to you.

Obviously, I am not suggesting that you go out and buy luxury everything. In fact, I am not necessarily even suggesting that you buy luxury anything! The key to feeling like a prince on a pauper’s budget is looking inwards and finding what those items are that you most want – those are your luxuries. Most of the time, whatever it is that you want can be purchased at a reasonable cost. The trick is to be sure to pick an item that will truly be a luxury to you and not just a passing fancy. If it is a thing, ask yourself how much you will use it; if it is an experience, ask yourself if you will get lasting enjoyment from it. Your answers to those questions will go a long way towards determining if it is a worthwhile luxury or a whim.

Here is an example of what I mean (which also just happens to be the spark that led me to write this article). I recently convinced a friend of mine to buy a turntable that he had been talking about for ages. Everyone in the world knew that it was the luxury he wanted for himself. He knew it too, but he just could not bring himself to “waste” the money. Of course, he finally bought it; and of course, he is glad he did. The two important things to notice here are that it was something that he knew he had wanted for a long time and that it was not terribly expensive. That last part is important, by the way. If you want a yacht, then you are probably out of luck – that would be living like a price on a prince’s budget!

Here are a few quick examples to help you generate some ideas of your own:

Buy a used car: Everyone knows that a new car’s value plummets the second it is driven off the lot. So why not take advantage of that price drop? The used car market has never been so liquid and accessible as it is now, so even if you live out in the country, you will have no trouble finding a high-end used car for a great price.

Shop for things during the off-season: It is astonishing that, after every holiday, stores practically give away their holiday-themed merchandise, and yet we the consumers happily wait until one week before the holiday rolls around again to pay through the nose. You know that Christmas will happen next year, right? So why not buy all your Christmas-themed gifts and ornaments right after Christmas when they are 90% off? Given that many of us can spend hundreds of dollars on holiday-related merchandise, the savings to be had from using a bit of foresight are worth the modicum of planning it takes to get your shopping done early… very early.

The same logic also applies to non-holiday-related goods. At the end of the winter, most stores will have clothes at 50% off or more as they try to make room for their spring and summer collections. In about nine months, winter will be back and you will need warm clothes, so why not buy them when they are being sold at a substantial discount?

Look for free live events: This one might be a little tricky if you do not live in a city, but if you do happen to live in a metropolitan area, you will be amazed at how many free events there are. Art museums will frequently have free live shows and/or exhibits. Local symphonies or university symphonies also will have free or discounted concerts at certain times of the year. There are food truck festivals, art festivals, beer festivals, and the list goes on. Many of these will be free and provide live music and other entertainment.

Being thrifty does not mean that you have to deprive yourself of a good life. Use your judgment to pick and choose small luxuries that will make a big difference to you. Be smart: find the best ways, times of the year, etc. to get these luxuries at a good price. You will find that you really can live a luxurious life and keep your savings intact at the same time.

How to Create a Zero-Based Budget in Excel

April 27, 2020 By MelissaB Leave a Comment

Whether you feel like your finances are a mess and you don’t know where the money goes every month, or you want a better handle on your spending and saving records, I highly recommend keeping a monthly budget. I know, I know, people always complain that they don’t want to keep a budget, or that their finances are too complicated for a budget. The simple truth is, once you learn how to create a zero-based budget in Excel, keeping a budget is quite easy. And if you’re short on cash, that’s all the more reason why you should keep a budget.

Why Keep a Budget?

A budget can be helpful at the beginning of the month to act as a map. This map tells you how much you have to spend and save and helps direct how you use your money.

At the end of the month, when you fill in what you spent, the budget serves as a financial journal, so to speak. I find it very helpful at the end of the year to see how much I spent on groceries, miscellaneous, etc. That helps me make next year’s budget. Also, if my savings is smaller than I would like, looking over past expenditures helps me see what was the cause.

Why Use Excel?

There are so many budgeting software programs out there. Why not use one of them? Well, you certainly can, but I’ve discovered that most of them charge a monthly or yearly fee. I don’t know about you, but I find it irritating to pay $5 to $8 a month just to have a platform for maintaining my budget. However, after you initially buy Excel, it’s completely free! And, once you learn how to use Excel, it’s easy to use.

Sure, you could keep your budget on paper, and I did that when my husband and I were first married. However, as finances get more complicated, a paper budget is harder to maintain. It’s also harder to evaluate your spending at the end of the year because you can’t organize it by categories and expenditures.

What Is a Zero-Based Budget?

A zero-based budget simply means that each paycheck, you plan expenditures that are equally to your income. So, if you create your budget, and you discover you have an extra $200, you don’t just leave it sitting there. (Most people will slowly pitter away that money during the month.) Instead, you earmark that extra money for something. Maybe it goes to your emergency fund. Maybe it goes to debt repayment. The point is, you give that money a job so you don’t spend it because you see it as “extra.”

How to Create a Zero-Based Budget in Excel

Creating a zero-based budget in Excel is fairly easy and quick.

Create Categories First

When you start your budget, you’ll want to have several categories. These categories will run vertically down your Excel column.

Categories to Add to The Budget

The first column should have several major categories:

Income
Fixed Expenses
Variable Expenses
Debt

These categories represent your income and all expenses for the month.

Fixed expenses will be those expenses that are the same month after month. Think rent or mortgage, cable & internet, etc.

Variable expenses will be those expenses that vary every month such as gas, groceries, spending, utilities, etc.

Debt will obviously include all of your debt such as credit card payments, student loan payments, car payments, etc.

By now your Excel spreadsheet should contain two columns. The first should be the broad categories of income, debt, fixed expenses and variable expenses.

The next column should contain the names of all of those particular expenses.

Get Ready to Record Data

After that, you should have two new category headings, each in their own column—Budgeted and Actual.

At the beginning of the month (or pay period), you will put in the budgeted amount you plan to use for each category.

As you incur expenses, you will put the actual spending under the “Actual” column heading.

Customize to Your Choosing

At this point, you can customize how you would like. Some people focus on the aesthetics and make each column a different color.

Some people budget for the entire month, while other people budget for each paycheck in the month, whether that be four or five for a weekly paycheck or two paychecks for a bimonthly payment. You decide what works best for you.

Keep in mind, if you look in Excel, you don’t need to create such a simplified budget. Excel has plenty of budget templates already designed for you such as this:

What If You Don’t Know How to Use Excel?

What if you’re convinced you need a budget, but you are intimidated because you don’t know how to use Excel? No worries.

There are plenty of free online tutorials that can teach you how to use Excel. If you’re a visual person, check out YouTube tutorials. If you prefer online websites that explain how to use Excel, there are plenty of those, too.

For the most part, learning how to create a zero-based budget in Excel only requires the most remedial Excel knowledge.

The only tricky part is that in some places in your budget, you will likely want to add a calculation formula. For instance, if you have a category for “Emergency Fund” and at the end of the month you want the $400 you saved this month to be combined with the $600 you saved last month, you’ll need a calculation formula. Again, this is easy to learn in less than two minutes through a video like the one below:

Final Thoughts

Learning how to create a zero-based budget in Excel will be worth your time! Once you have the budget set up, you can create a plan for your spending and also track how you spent your money at the end of the month. When you have a clear view of how you’re spending your money, you’ll be able to have more control of your money. As a result, your financial situation should improve.

6 Unexpected Baby Expenses to Budget For

February 27, 2020 By MelissaB Leave a Comment

There is nothing more exciting than the anticipation of a new baby. However, a baby can increase the budget even if you’re frugal. These are just 6 unexpected baby expenses to budget for. These items can’t bought second hand and likely won’t be gifted at a shower.

6 Unexpected Baby Expenses to Budget For

If you’re planning for a new arrival this year, there are a number of expenses you should plan for:

Formula

6 Unexpected Baby Expenses to Budget For — Photo by Rainier Ridao on Unsplash

I breastfed all three of my kids, but all three were such massive babies with big appetites that I had to supplement with formula while breastfeeding. We hadn’t planned on that expense, and formula is expensive!

Breast Pump

If you are going to breastfeed, you’ll need a breast pump because even if you’re a stay at home mom, there will be times that the baby doesn’t want to eat or you won’t be with the baby at feeding time, and you’ll want the option to pump. If you don’t plan to breastfeed for long, you can rent a pump month by month through your local hospital. I bought mine for $200 and used it for all three children, so it was well worth the expense.

Unexpected Medical Expenses

While most babies are perfectly healthy, some babies have issues and have to visit the ER. My friend’s baby got RSV and then had a partially-collapsed lung, all at 5 weeks old, so she spent five days in the hospital. That was an expense they had not planned for, and it took them a few months to pay it off.

My daughter had jaundice for three months, and we had to see a number of specialists, and she was checked into the hospital one night. (She was fine, but we hadn’t planned on the specialists and going to the hospital several times a week to check her bilirubin.)

Increased Grocery Bill

If mom is breastfeeding, she’s going to eat a lot! It takes a lot of energy to produce all of the nutritional needs for baby. Don’t be surprised to see your grocery bill increase for the duration of the time that mom breastfeeds.

Clothing

Mom’s body changes after delivery and the post-partum period. Not only will she need clothes that fit her when maternity clothes are too big and she can’t yet fit into her pre-pregnancy clothes, but she’ll also need some good nursing clothing if she’s breastfeeding.

Miscellaneous Items

There are other, little items that you may need such as diaper rash cream and gas drops. Our second child had so much gas that she wouldn’t sleep at night, and we went through baby gas drops what felt like every week. We later found out she had a milk intolerance, and when we took her off milk, she did fine.

Final Thoughts

If you’re expecting a baby, you can get many of the items that you need at your baby shower. However, there are other items that you’ll need that you won’t get as gifts and can’t get secondhand. Being aware of these before the baby comes can help you create a realistic budget.

What other expenses would you add to this list?