Budgeting, retirement

Very Basic Budgeting for Beginners

Stay tuned for a series of articles on BUDGETING over the next few days.

Have you been talking about a family budget, but aren’t sure where to start? Sometimes it’s good to start with the basics, such as the basic outline for a budget and the categories you want to include. Here are some tips to help you formulate a simple family budget.  This can be used for an individual budget, too.

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Photo by Aidan Bartos on Unsplash

Income

The first place to start in the outline of your budget is with your income. There will be some estimating here, no doubt; but make sure it’s estimation, not dreaming, say experts. The income area of your budget is not the place to write down ideals. Simply take a look at your net income over the last three months and estimate an average monthly income. Or you might have income that changes very little month-to-month; it should therefore be pretty easy to figure out your monthly income.

Expenses

Your next category should be expenses. It’s good to include enough detail that you have a grasp on things, but splitting your expenses into dozens of little categories will probably only frustrate you. Try to make your categories fairy general – “entertainment,” for example, is a more general category than “computer games, movies, cable, and DVDs” listed as separate categories. There will probably be more estimation here than in the income category.

As you break down your expenses into understandable categories and numbers, remember that charitable giving or any giving away of money should be also listed as an expenditure.

Actual Expenses

Estimation gives way to “real” numbers when you write down your actual expenses during the month. This is the last section of your budget plan. Keep a running tally of your expenses for several months, and then look at where you are.

Some Basic Principles

In budgeting, there are some principles that are considered basic. Here are some of them.

* Distinguish between wants and needs. This can be a hard one, but it’s vital for a budget to function properly. Beware of convincing yourself that a want is a need when it isn’t – you may just be trying to find an excuse to buy the item. Real needs are things like clothes, food, and shelter; but designer clothes, gourmet food, and a palatial dwelling are more like wants!

* Expenses should not exceed income. You may find yourself surprised the first time you do a budget and discover that you actually don’t make enough money to cover your expenses. If you discover this, you need to look carefully at your income section and see where you can increase it, and look just as carefully at the expenses and see where you can make cuts.

retirement

6 Convenient (and Unnecessary) Things Many People Can Live Without

It is scary to have to give up something you are used to, but in a successful retirement, it may happen.  In my case, there are a number of things that have to go just so I can make ends meet.  Here are some ideas you may not have thought about .

  • Cable TV:  Cable is something that is pernicious and ever-present in our lives.  The eyes pop open in the morning, the TV goes on.  And we watch whatever is there, almost mindlessly.  But, what if it doesn’t have to be that way?
    • Can you bite the bullet and cancel your cable subscription?  You can buy and inexpensive HD Antenna to receive all the local channels–a one time expense and you still have access to many network channels and your local news.
  • Smart Phone Data Service:  I know this one is a real toughie for many people.  But, can you cut down on the amount of data you are paying for?  If you are now retired, you are probably spending more time at home and you can use WiFi instead of cellular data on your phone.  Or, can you switch to a cheaper cell phone plan?
    • An Internet search will reveal many inexpensive cell phone plans, so do your research and find out which one will work best for you.  You don’t have to spend big buck for Verizon or Sprint when you can get identical service for much less every month.
  • Land Line Phone:  If you have a cell phone, do you really need a land line, too?  Eliminating one or the other will be a savings.
  • Netflix, Amazon Prime, Hulu:  Are you paying for a streaming service?  Maybe eliminating one or two of them will save you a few dollars each month.  Try it.  Pick one to keep and cancel the rest for a month.  If you really can’t live without them all, then simply turn them back on.
    • I know you just got rid of your cable, so you may be reluctant to give up a streaming service.  Ask yourself how much you actually have to save each month and maybe $10 or $20 will make a huge difference.
  • Magazine Subscriptions:  Is there anything you can read in a magazine that you can’t find on the Internet?  Don’t renew any of your current subscriptions.
  • Books, Movies, Music on line:  You can get books from a library.  You can watch movies on Netflix without buying the latest DVDs.  You can listen to music on streaming services, like Pandora, without having to buy all the latest tunes.
    • I love my local library because I can get books sent directly to my Kindle with my library card.  Not every book is available in ePub format, but you can request them from your library and perhaps within a few months, your book will be downloadable.

Having to find a couple of hundred dollars extra each month has been a challenge, but there are cheaper ways of doing just about everything I do.  It just takes courage.  It takes willingness to change and to make a difference in my own life.

Photo by Didier Weemaels on Unsplash

retirement

3 Ways to Live Happily on Social Security

Fixed income!  Fixed Income.  fixed income. Fixed Income.  No matter how you write it, the concept is very daunting.

No one can live on just Social Security Income unless they don’t object to living in a tiny rented room and eating nothing but rice and beans.   Also, no one wants to end up as a door greeter at (Something)Mart as a way to supplement their fixed retirement income.

So what can you do about it?

Get a roommate.  There are plenty of people who are on fixed incomes who would love to share an apartment or house.  In my case, I have my older brother who is also on Social Security sharing my house.  Between the two of us, we can cover the mortgage payments, utilities and food.  But, what about those extras in life, like getting a pedicure, or buying a new blouse?  What if you don’t like the idea of having someone sharing your space?  What if you don’t know anyone who would be willing to move in?

A roommate doesn’t have to be someone you have a romantic relationship with. If you are single or even if you are part of a couple, finding another retiree (or two if you have the space) is actually a pretty easy process if you advertise on Craigslist or other website that caters to finding roomies.  You new roommate doesn’t even have to be a retiree.  Maybe someone younger would work out.  Just give it some thought before plunging in.

Simply decide ahead of time what you will and will not tolerate and put that in your ad.  People you interview for the position of roommate will not have unrealistic expectations if you let them know in advance what is required.

For my part, I told my brother this was a 100% no smoking house and any smoking had to be done outside.  This is a pet free home, which cuts down on additional cleaning that must be done.  He takes out the trash and keeps up with the yard work.  He cooks and I clean up the kitchen.  The rest of the cleaning we share and my house stays pretty clean most of the time.  We both agreed that we would have any overnight “romantic” guests.

If a roommate is not to your liking there are other options.

Find a work at home job.  If you want extra cash and are a little tech-savvy, then work at home jobs may be the answer.  You can work in comfort and have your own kitchen and bathroom available as needed.  It may take a few weeks to find exactly the right work at home position, but be diligent and look everyday for work at home positions.

The advantage of working at home is that you don’t have to commute to work, you won’t spend money buying a lunch, you can many times make your own schedule.  The disadvantage is that it is easy to get distracted while at home.  People come to visit, the TV is tempting, working on a hobby may interfere.  Make sure you have the discipline to stick with a job before committing to working at home.

A note of caution.  Do not pay anyone to get hired.  If they are a legitimate company, they will pay YOU.  Use a reputable hiring web engine such as Indeed or Monster.  If you are worried about using sites such as that, go directly to the company’s website that you are familiar with, such as QVC or Amazon.

Sell. Sell. Sell.  If you are “crafty” you can sell your craft items online at Etsy, eBay or Craigslist.  You can sell household items at yard sales.  You can go to yard sales, thrift stores, auctions, and estate sales to find items to sell at your own yard sale.

It may be a cliche, but think outside the box.  Invent ways to supplement your income.  Above all, be happy with life.

Photo by Lotte Meijer on Unsplash