Saturday, June 14, 2008

The pie stays the same size, it's the slices that are getting smaller

In our petroleum-dependent economy, we have seen prices for food, fuel, utilities and other goods and services rise as the cost of oil hovers at $135 a barrel.

Since I my job depends on a certain amount of driving, I can't realistically cut back on gasoline.  Since gas takes up a larger slice of my budget, that leaves less money for the rest of the pie.

Something has to give, as in cut back or eliminate. With the cost of living spiking, now would be a good time for us to re-evaluate our budgets.  Don’t wait until you’re caught up in a serious cash crunch and turn to credit cards to finance your monthly living expenses.

And while we're at it, let's call it a spending plan instead of a budget.  The word budget has an ugly connotation of depriving yourself , kind of like the word diet.  Doesn't a food plan sound less restricting than "diet?"

Here are three budget guidelines to consider: Prioritize, Economize, and Increase Income Size. 


Ask yourself if a purchase is based on a “need” or a “want.”  Needs are necessary for survival: a roof over your head, a car to get to work, food to nourish your body.

Sure “wants” make life more fun or comfortable.  But you can probably do without those little luxuries. Don’t confuse your need for a car as an excuse to buy a prestige model when a more affordable car will be kinder to your budget.  We all need to eat, but ordering steak every day may an indulgence.

First things first. When doling out money each month, the first payment should be for shelter.  Pay your rent or mortgage payment first.

Save as much money as you can each month.  This savings account can be used in an emergency instead of using a credit card.  If economists are correct in forecasting an impending recession, you want to be prepared.


Compare the rates of utilities, phone services and insurance.  Sometimes you can get a discount by signing up for a package of several media and communication services.

Use the Internet to compare prices for loans.  Many companies offer Internet specials.  I just refinanced a car for 4.25 percent over the Internet and transferred credit card balances for 2.99 percent for the life of the loan.

Get reacquainted with the stove and cook more.  Eating out costs three more than eating at home. To cut on food costs, revive old family recipes.  One-skillet recipes stretch meat, which can be the most expensive ingredient in a dish.  Make your own fruit juice pops when the kids want something cold from the freezer instead of ice cream.

You can still have fun while watching your budget.  If you love movies, consider taking the family to the dollar cinema, just forgo the pricey popcorn and soft drinks.  Or you could always rent a movie and pop your own corn at home.

Check out the weekly specials at the grocery store.  We often get busy and make the same old dishes.  Develop recipes based on the fresh produce and meats that are on special.  Some store, such as Wal-Mart, will honor competitors' prices when the ads are shown to the cashier. Coupons for items you regularly purchase can save you big bucks.  Beware that some companies have to entice customers to buy their products because they are expensive even with the coupon savings. 

Increase Income Size

Look for a second job.  Even a part-time job will bring in extra cash.

Have a garage sale to sell unwanted items.  Some cities require a permit so call city hall first.

Encourage your teen-age children to get part-time jobs.  They can pay for their own clothes, entertainment and gas, lightening the load for parents.  Working builds character and teaches life skills, such as getting along with co-workers, managing money and handling difficult people.  My son started his job eight days ago at a fast food restaurant and has learned there are good days and there are bad days on the job, but you just do your best.

Before you start your campaign to balance the family budget, it’s important to change your attitude about what is really adding value to your life. It’s also important to get the entire family onboard.  Constant complaints could sabotage your good intentions.


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