MONEY BASICS: Eating out for 4, for less than $10
Recently I was talking with some friends and they were complaining about overdraft fees on their checking. As the old saying goes been there done that. It is a rut that is easy to get into and hard to get out of. The problem in many cases is not a lack of money. It is a lack of management. In the course of my life I ran my own business for quite a few years. I never hired a book keeper or and accountant, but I did learn to take advice. Free advice is worth what you pay for it. Sometimes it does work if properly used. If you have a job it is a lot simpler than if you don't. The trick I use is simply a monthly envelope. When I started doing it a friend of mine had me putting money in different envelopes. There was a different envelope for each bill. When that bill came due you simply took the money out of the envelope and paid the bill. It did help me get on my feet, but I still would forget to send the payments occasionally. I needed and created something even simpler. It is a combination system of envelopes and direct deposit, which I originally did not like. Properly used it is a very good system. It turned out to be the best thing that ever happened to me.
Here is how you can make you budget life a lot easier. Bills that come every month and are pretty stable should be paid by your direct deposit account. If you do not use direct deposit or a bank account to manage your money, that is the first step to fixing your problem. If the payment fluctuates like utilities pay it yourself. House payments, insurance, cable and other bills that are the same amount each month should be paid by direct deposit. The first thing you need to know is the total amount of those bills. Say it is $800 dollars a month. You need to then divide that number by the number of times you get paid per month. If it is four times a month the number is $200. If it is twice a month the number is $400. When you get paid you deduct whstever the amount it is from your paycheck balance. Say you make $370 per week total. When you deduct the $200 from your check, it is spent. It is gone. It does not exist. To really protect yourself put in $10 to $20 extra per month and forget it. You now have $170 per week left.
This may sound strange but the very first thing you should do is give yourself an allowance, to spend and enjoy. Do not get crazy with the amount. If God can get by on 10% so can you. Besides if anything is left after the budget is done, you get to say where it goes. Hopefully there will be some left. If there is not, keep your allowance and cut something else out. The feeling of being a slave to your bills can be one of the most depressing things that ever happens to a person.
The next thing you do is total up the bills that are not paid by direct deposit. This should include gas, groceries, and other regular but necessary items. Hopefully it is a number that is less than the $170 you have left per week. Try to space the payments out so have some cash left every week. If the number is greater than what you have left each week, something has to be done. You can either eliminate something, try to spread out the payments evenly throughout the month or figure a way to get more money to cover the shortage. Whatever you have left is what you have for spending money.
Once you have all those numbers worked out you need one envelope. I use 9 inch by 12 inch manila envelopes. I do one envelope for each month. All the money you spend that is not in the budgeted amount must also be accounted for. You do that so you can learn where, and what you are spending or possibly wasting money on. I draw lines on my envelope. Then I put the date. the amount spent, how it was spent (check,cash,debit card or credit card, where it was spent and for what. You need to get in the habit of getting a receipt for everything even if it is just a candy bar. Put all the receipts in the 9 X 12 envelope. Either when you put them in the envelope or every so often you need to log each receipt. My system is to keep all my receipts in my pocket. When I get tired of digging through to get to my cash I put them in the envelope and log them on the front. One little trick I learnt over the years I either paper clip or staple all the receipts together each time I put them in the envelope. I also put a line after the last entry of each pocket clean out. That way if I need to find a receipt to take an item back for a refund it is easier to find. Digging through a couple hundred loose receipts is a real pain.
After just a month or two of doing this system you will start to get a real clear picture of what for, and where your money is really going. It will amaze you how much you can spend eating out. Also buying things you do not really need to buy. Recently I cleaned out my office and filing cabinets. It was interesting to find out how many notebooks I had. Many were duplicate files that just took up space. I have also learned to write on the tabs and envelopes in pencil. Then you can relabel them and get more use out of them. I went and bought a new box of manila folders in preparation for the job. After cleaning my files I had more folders than I will need in a year or two. So now I can get out that receipt and take the folders back, that I wasted money on. That is one way organizing your finances can save you money. That box of folders was almost twenty dollars.
Here is another little tip that will get you out of the overdraft problem once you get the basic budgeting down pat. When you write a check on your account and subtract it from you balance, always round up to the next dollar. It is a sort of insurance policy and a hidden savings account. If a check is $10.90 or even $10.10 always deduct it at the next higher dollar amount. In this case $11. Over a period of time you will build you a bumper that will protect you from minor mistakes. It has to be combined with getting the basic budgeting techniques down pat first though.
Living pretty far out in the sticks sometimes when I am buying stuff and I am not sure which size I need. I will buy two items and then use the receipt to take back the one I did not need. It is my way of saving gas and getting done what I need to get done. A trip to town is about thirty miles. That is two gallons of gas in my old truck and a good hours worth of time that I save. When I get enough stuff on my to do list I will make a trip to town and do it all at once. Little things like that can save a lot of trips and gas.
Learning where to eat when in town can save you a lot also. I know most people have a favorite. I like Mexican food myself and Taco Bell has a real good deal. They used to call it the Two Dollar Meal Deal, but they raised the price to $2.29 in January. You get a choice of one of four main items, a bag of Doritos and a drink for that price. That means you can feed a family of four for less than $10. You can not even do that at Mickey D's. The key to the whole system is learning to get your money's worth, and only to spend money on what you really need to spend money on. That is the key to good budgeting. As you get more and more organized you will not be making the overdraft mistake anymore. You will know what your budget is and how much you have. It always cost you more to spend money you do not have. Whether it is at the bank or on your credit card or even the monthly bills. Overdraft fees and interest are a form of robbery, but we only pay them if we do not properly manage our money. A thirty dollar overdraft fee can let a family of four eat out three times, and enjoy the fruits of your labors. Which is more appealing to me than giving some banker who pays his employees minimum wage a free ride, or working two hours for nothing.
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