Budgeting for Savings

Budgeting has become a lost art. The spendthrift ways of yesterday has come down to a financial strain on family resources and left most people scrambling to make ends meet and find new ways to keep the standard of living.

It takes an economic crisis to force everyone to rethink their spending habits and their priorities on what it is they really need to survive through the chaos.

Being frugal does not mean going without necessities. It does mean putting to use every dollar more effectively. Large ticket items such as cars, furniture and appliances are a large drain on the pocketbook. You don't need to keep up with the trend in cars by buying new every three years. With proper maintenance your car can last three times longer. Used cars are a better bargain.New cars loose up to half their value within the first year from purchase.

Food, clothing and shelter are necessary items no one can live without, there are ways to save in these areas that can help you save without sacrificing your standard of living. So what can be done to stretch a dollar to make it go further when it comes to grocery shopping? Here are a few tips:

* Budget your grocery shopping. Take a look at how much you spend, then set aside a certain amount of your income for food purchases. Make a shopping list of all your necessary items. If you have money left over from your food budget, then you can allow yourself some luxuries.

* Don't buy at convenience stores. Prices are more expenses than in the supermarket. The 24 hour-a-day convenience is reflected in the prices of the items you buy.

* A big home is a status symbol for many people but a great drain on resources. Add the costs of fuel, electricity, taxes and insurance, your big home can take a big chunk of income. Considering that home prices have plummeted recently, a smaller home is a better fit for your needs if the family isn't particularly large. If selling your big home is out of the question, consider cordoning off a separate part and renting it. According to Retire Early, a big home was a good investment during the 70's and 80's when inflation was high. A smaller home is a better bargain in a recession. Today, a large home is a liability since you can't sell it.

* Buy a new car every ten years. Over a working lifetime, the average person could save enough to retire five years sooner by not buying new so frequently.

* Buy generic. Many products are made with the same ingredients. They just don't have a brand name on the label.

* Buy non-food items such as toothpaste and soap at dollar stores as they are cheaper than at the supermarket where the markups are higher to allow the store to make more profit than on the food items. When it comes to furniture and appliances, look for liquidation sales.

* Lunch is a large expense item. Coffee from Starbucks and that sandwich at the deli add up over the months. Bring your own lunch instead of buying at the canteen or the deli.

There are many more ways to save on household expenses. Your financial future will succeed or fail based on how frugal you are today. In this time of trouble, being careful with spending will help develop the habits that will carry on when the economy makes a turnaround.