We all need a fresh start to ease our money concerns. We have pushed, pulled and stretched our pennies so far that we end up forcing old Abe Lincoln to jump off to go get help. No matter what we do, there never seems to be enough. But just how can we do it? Where is the money going to come from?
Money concerns can affect our health, outlook on life and those around us. We would rather be working in our garden or spending time with our family, rather than trying to make the budget balance. We may always have financial issues, but there is a way to ease our concerns.
Make A Fresh Start – Create a Budget
I know. You have heard this so many times it makes you want to scream. The excuses range from ‘I don’t know how’ to ‘why do it when it never balances anyway’. I feel your pain. I really do. But the only way to get a fresh start to ease your money concerns is to know exactly how much you have and where it goes.
A good budget will list any and all income you will have at the top. Beneath that should be a list of everything on which you spend your money. We already know it should list things like our mortgage and utilities. But it should also incorporate yearly items such as property taxes, and other expenses.
There are also the ‘extras’ that should be added, but usually are forgotten. Just like that ‘found income’, you need to add the ‘hidden’ expenses, such as Entertainment, Christmas and Birthdays. Think about everything you spend, and create a category for it.
If you have a regular paycheck, it is easy enough to add that to your budget. If your ‘fresh start’ includes a raise on that paycheck, so much the better!
What we don’t think of as ‘income’ are things such as monetary gifts, and change found in parking lots. Now, don’t laugh at that. When we find coins in odd places, we put them in piggy banks. We also do this with change in our purse or pockets.
At the end of every quarter, we roll up that change and put it in savings, or in the checking account to help make ends meet. If you think about it, even those lose coins can turn into an income.
A Fun Example
Years ago, when I would complain to my dad about the high cost of living, he would reach in his pocket and pull out his change. He would say, “Julie Belle, I know how you feel. Maybe this will help.” And he would pick out a dime and penny and give them to me.
Several years later, one of our favorite customers was bemoaning the high cost of running a business. I could almost hear daddy’s words echo in the room. So, I reached in my purse, pulled out a dime and a penny. As I handed it to Sam, I told him that I fully understood, and was going to contribute to his cause. Maybe there would be a way my small amount of change would help his circumstances.
Several months later, I stopped back by Sam’s to pick up a motor. He motioned for me to come ‘see something’. That something was a small pile of change on the corner of a table.
“Miss Julie, I just want to thank you for your contribution. I put your eleven cents on the table after you left. Several folks asked me about it, and I told them what you did. So far, everyone who has asked about it has added a little bit. Your eleven cents has now turned into $3.48.”
Folks, that Fresh Start for Sam turned into a 316% increase in his ‘starting capital’. See? Even a few pennies from a parking lot can start to add up!
I Need More than a Fresh Start – My Expenses Exceed my Income!
As much as I hate to say it, that is often the issue with budgets. It is also one of the reasons I hate to do one each year. Unfortunately, if I don’t, my spending will get out of hand too easily.
This is the point where you need to determine if all those expense line items are absolutely necessary. It is also the time to find out exactly where your income is going, and to figure out where you can cut back.
One way to do this is to keep a notebook with you at all times. When you spend cash, write it down. Did you forget to pack a lunch today? Make a note of those quarters you stuck in the vending machine. When you stop at the grocery store ‘for just one item’, write down how much you spent.
Do this for three months. At the end of those three months, take a look at how much you spent and where you spent it. Does it need to be added to an already existing budget line? Was it money you could have saved by doing something else – like packing a lunch?
This is just the first step in knowing where your money goes. The next step is finding ways to save.
Start Fresh by Cutting Your Expenses
By working with a budget, you can easily see areas where you can cut back.
For instance, if your electric bill went through the roof last month, you know there are ways to get it back to a manageable amount. It may mean turning your thermostat up in the summer or down in the winter.
Clothes dryers can be up to 35% of your bill, and sometimes even more. At the very least, hang your clothes out to dry on the line. First, it will drop your electric bill. But did you know it will also save on your clothing budget? All that lint in the dryer is a tiny piece of your clothing. That isn’t an issue with a clothesline.
Turn the lights off in rooms you are not using. Unplug appliances, especially those that have clocks or other sensors. Use battery powered or wind up clocks.
Water is probably one of the least expenses when it comes to utilities. Still, we can cut back and save. Don’t leave the water running when you brush your teeth. A shower uses less water than a bath.
If you hand-wash your dishes, try this tip: place a pan (we use a plastic tub) in the sink. Add your soap and hot water. When you rinse the dish, turn the water on and off between rinses. When you are finished, take that tub of water and pour it on your plants.
If Entertainment is one of the expense items on your budget, this is another quick and easy way to lighten the burden. The last I checked, for the Country Boy and I to go to the movies, purchase two soft drinks and one buttered popcorn to share, our final cost would be close to $50.00. Ouch!
We can easily cut that expense out. Movies are easy to find on television, or we watch one we already own, or borrow one from the library. As for that popcorn – did you know there is approximately a 1,275% markup on popcorn at the theaters? Yes. That really should be a comma, not a period. That $8.00 tub of popcorn you just purchased cost the company around ninety cents to make (or less).
Even using name brand microwave popcorn as an example, one bag costs around thirty-cents. It is even less if you buy a bag and pop it yourself. As for the soft-drinks, it is easy to shop around and find them for less than thirty-cents per can. Even better, buy a packet of Kool-Aid for the same price, and have enough for everyone.
But it was on SALE!
A $10.00 item marked down 50% can be a temptation. However, the big question is, do you really need it? Yes, you saved $5.00, but you also spent $5.00 – plus tax. The quickest way to save money is to get into the habit of buying what you need. Don’t fall into the money disposal pit by giving into your whims.
On the flip side, using coupons, shopping sales and paying attention to grocery store flyers can save you money on things you do need. This is an excellent way to attack those ‘shopping’ budgets – clothing, food, etc.
Interest Bearing Accounts
Whether it is a mortgage, a car loan or a credit card, diligently work towards paying those off. Consider your mortgage. You may have spent $75,000 on your home, but after 30 years of paying your note, your home ends up costing you almost twice that amount. The downside is, your mortgage payment doesn’t drop for depreciation, and you still have to do home maintenance.
If you do use credit cards, do everything in your power to pay them off each month. This may mean cutting back on the ‘extras’, but eventually it can be done.
Multiple ‘Fresh Start’ Budget Issues
If you are a homesteader or small farmer, your issues with budget get complicated. You not only need a household budget, but also one for the homestead.
Some homesteaders have a home-based business, where they sell the products they grow. It may be livestock, eggs, or even vegetables, but the income helps to off-set the expenses. Unfortunately, you cannot ‘blend’ a household and business budget together. For tax purposes, they must be kept separate.
Even if your homestead is not an ‘official’ business, you still need to keep excellent records. Not only do you need to keep them for financial purposes, you also need to keep them for livestock. Kathi over at Oakhill Homestead has a great post (and freebies!) Homestead Record-Keeping Made Easy.
Budgets are Personal
There are probably thousands of home budget templates on the market. The problem with them is they do not take in all the variables. Where one household may have children where after school activities need to be added. Another one may not have children, but they do help support a family member.
For your personal Fresh Start, this is exactly why I advise setting a budget up on your own. If you have a spreadsheet program, such as Excel, it is easy to do. This is how I do mine.
When my Mom taught me how to do a budget, she shared hers, which is a monthly account of her finances. She keeps these in a notebook so she can refer back as needed. Another way is to do a yearly spreadsheet, so you can see everything at a glance.
Are you ready for a fresh start in 2020, by easing a few of those money concerns? Try these tips and let me know how they work for you!
Thanks for sharing at Farm Fresh Tuesdays! I think everyone is thinking finances as we start the new year!
Melissa | Little Frugal Homestead