Tight Budget Tight Salary

Sometimes your salary isn’t paying quite enough to cover all you wish it could. Maybe you got promoted to an exempt position that looks good on your resume, but now that lucrative overtime bonus is gone. You could have been offered benefits that you truly need (medical insurance, for instance), and on paper it all looks good, but in your wallet there’s not enough cash.

This is where that “B” word – Budget – comes in to help.

All the experts start with an honest assessment of where your money is currently going. If you don’t know where your money is currently going, how can you control its flow? Write down all the ugly reality on paper so you can look it in the face and deal with it.

The problem isn’t automatically solved by a higher salary; it is solved by controlling the way you spend what you earn.

You can see this in the sad tale of many lottery winners whose huge chunks of money are gone in a few years or the way even high earners go bankrupt. This means that you have hope because you can control your cash flow by choosing to work with the real numbers instead of the dream numbers.

Look at the real numbers and come up with a real plan and follow it:

  • Do some research on money management. There is so much wisdom and free advice or seminars out there that your head will spin, but the reality is you have to make it work for your situation.
  • What are you willing to sacrifice to keep that steady salary or those benefits?
  • When you make the choice NOT to spend, remind yourself that you are saying “no” to this thing and “yes” to controlling your cash flow. You are the boss of your spending.
  • Pay the minimum on your bills if you have to, but add a little when you can. Somehow, that extra gives you a sense of power.
  • Allow yourself some “mad money” that you can spend on whatever you like, but when it’s gone, it’s gone until you get paid again.
  • Somehow, keep saving for emergencies. Even a little bit adds up!
  • Sell some stuff and put the money on the biggest bills.
  • Come up with ways to reward yourself that don’t cost money.

Keep a reminder of your plan, and your goals, in view. You aren’t “stuck” with that salary, you have chosen to stay in the position for a reason. Is your reason still valid? Can you ask for a review and a raise? Are you utilizing all the benefits you have? You may need to sit down and crunch numbers with others who are involved with your money decisions, but it will be worth the time and effort that takes to get everyone on the same team in this!


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How Homebuyer Can Save The Money

There are many reasons it would be financially advantageous to purchasing a house. You may have recently graduated from college, are a newlywed, expecting your first child, or have accepted a new high-paying job. There are long-term financial advantages and tax benefits to homeownership, but one of the largest roadblocks to purchasing a house is often the down payment. Below is a list of suggestions that you can use to save money towards a down payment on a new house.

• Create a Household Budget – Write out a list of all your monthly expenses. Go through your checkbook and receipts for the past three months and find out exactly how much you are spending per month. Create a budget that you can live with that limits your expenses. Track your spending, this will help you realize what expenses you may be able to eliminate.

• Open a Savings Account – After creating your monthly budget, devote a certain amount or percentage of your monthly income to savings. Your savings should be used only for special purchases or holiday spending to avoid using credit cards or creating new debt.

• Bank Account Fees – Check your bank statements to find out if you are paying a monthly service fee for your checking and/or savings accounts. If you are, it would benefit you to research banking options from other institutions. You may not only eliminate monthly fees, but possibly receive a bonus for opening a new account.

• Credit Cards – If you carry balances on your credit cards, you’re paying an extraordinary amount of interest. Be prudent, focus on paying your credit cards off or consolidate the debt to an installment loan with a lower interest rate.

• Shopping – When going to the store for groceries, clothing, bathroom and household necessities, always write out a list and stick to it. This will help you eliminate impulse buying. Many individuals purchase unneeded items when they shop and regret the purchase later.

• Entertainment Budget – Most people do not have a household budget, therefore they have no idea how much they actually spend in entertainment dollars. Institute a weekly or monthly entertainment budget, based on your past spending habits. Your plan should include money to continue your normal routine, such as: money for lunch, dinner, and/or going out with your friends. If you pack your lunch and eat at home a few more days per week, you will undoubtedly save money.

• Insurance and Mobile Phone – Compare the rates that you are paying for your auto insurance and cell phone to currents offers. If rates have gone down, you may be able to save on both of these expenses.

There are countless ways to eliminate expenses and save money, implementing just a few of these cost-saving measures in your monthly budget will help you save faster than you may have thought possible. There is no magic pill or instant solution to saving money; it will take a variety of changes as well as time to save the money needed for a down payment. As an alternative to saving the down payment for a house, most lenders will allow gifts from family members as well as grants from nonprofit organizations and government agencies. Check with your lender to find out if you qualify for any down payment assistance grants in your area.


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Where You Should Spend The Money

A good budget should allocate income for the following four main purposes.

(1) Charitable Purposes

Charitable purposes include:

  • Relieving poverty, sickness or the needs of the aged
  • Advancing education
  • Advancing religion
  • Other purposes beneficial to the community. Examples are charitable giving to the disabled and orphanage.

Muslims practice zakat giving. It is a 2.5% levy on most valuables and savings held for a full year if their total value is more than a basic minimum. In Christianity, a tithe paid as a contribution to the church. Traditionally it is one-tenth of income. Today, tithes are normally voluntary based on the concept of “freewill offerings”. Dana is the practice of cultivating generosity in Hinduism, Buddhism, Jainism and Sikhism.

There are also non-religious organizations that encourage charitable giving to help the needy. Examples are National Kidney Foundation, United Nations Children’s Fund and World Wildlife Fund.

(2) Emergency Fund

During an economy crisis, businessmen may suffer business loss and may lead to lay off employees to reduce expenses. Businessmen need time for their business recovery and employees need time to seek a new job.

An emergency fund is a fund built up to protect you from temporary short-term income loss. If you are employed, emergency fund equalizes your three to six months expenses should be sufficient. If you are on own business, you may need longer time for your business recovery. Thus, the fund should be able to cover your living expenses for more than six months.

An emergency fund should be highly liquid that allows quick access to it, which is vital in emergency situations. You may consider to save it in a fixed deposit account or low risk unit trust fund.

(3) Invest for Future

Future purposes could be:

  • Retirement Planning
  • Children tertiary education planning
  • New car or property purchase
  • Other luxuries

You must first identify your goals, followed by goals prioritizing, then find out what is your number for each goal. By understanding your personal investment risk appetite, set up your investment portfolio and plan for regular saving amount.

Warren Buffett says: “Do not save what is left after spending but spend what is left after saving.”

(4) Current Living Purposes

Current living expenses include:

  • Tax payment
  • Mortgage and hire purchase (not more than 30% of total income)
  • Insurance premium (life, fire and auto insurance)
  • Quit rent, electricity, water, television, telephone and internet bills
  • Car maintenance, road tax, petrol, toll and parking fees
  • Food, clothing and medical
  • Expenses for children, parent and domestic maid
  • Hobbies and Vacations
  • Expenses for festive season, wedding, funeral and gifts


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Tips Saving For College Bill

Fall is in the air-no, wait, it’s hot humid and summer-like. Okay, fall isn’t quite in the air but the fall semester for school is gearing up; especially for those college-age children. Parents of college-age children all around the world have almost physically felt the sprouting of more grey hairs due to the surmounting college bills that are rolling in. So what can these financially stressed out parents do to rein in somewhat those college expenditures?

Here are a few ideas that may help with those oh so tight college budgets. Unfortunately, these won’t be able to help with all the sticker shock for parents sending their children off to college but there are a few areas that a little frugality can make a difference; such as saving on textbook purchases. Try these textbook-saving ideas and maybe you can feel a little financial relief in your college spending.

• Half.com – Parents and students trying to find and purchase for reasonable prices the long list of college textbooks can find relief when browsing through this site. This site has one of the largest varieties of offerings in the area of college textbooks. The other bonus, parents can simply type in the ISBN (the coded bar number assigned with the printing of the book, colleges usually provide this on the required textbook list) and voila, tons of offerings at different prices appear for their query. Then they simply need to choose their condition-grade level (this is based upon the condition of the book and whether it has writing, highlighting, creased pages, or damage and will directly affect the price). A tremendous amount of money can be saved by using this option of purchasing off Half.com.

• eBay, Amazon – These two online retail, resell sites of gently used merchandise are also great sites for finding, at a more pocket-book friendly price, those much-needed textbooks for college. Many college students, some who weren’t as lucky as you to read this article and find textbook saving ideas, were forced to spend full-value for their textbooks; so they-if their thrifty-will resell them online to the next wave of college students that are taking the same classes requiring the same textbooks.

• Renting Your Textbooks – A new option for college students in the area of textbook buying is being able to choose the option of renting their textbooks instead of buying. Many textbook selling sites make this option available to students, including Half.com and most college bookstores. But beware, there are caveats to the renter that they should be fully aware of before agreeing to this method of textbook purchase. Things such as: losing the books, damaging the books or late fees can end up making the cost of this option more prohibitive than the benefit. So read your “terms of agreement” statements carefully if you wish to reap the full benefit of this choice.

The cost of college education, unquestionably, has skyrocketed but there are areas that parents can find some savings. As in any other area of our financial life being an informed consumer can really pay great benefits for the total of that college bill. The buying of textbooks though doesn’t have to be the financial hardship that it would have been with a little research


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