A few years ago I found myself struggling from paycheck to paycheck and bouncing checks left and right.  With no raise in my foreseeable future, I took a hard look at my finances, budget, and spending habits to see where I could cut expenses.  The first thing I did was sat down and looked at what I really needed to be spending and how much I was making.

It looked about like this:

Shouldn’t have been a problem, right?  I obviously brought home enough in a 4 week period to pay all my bills with a little left over.  (This right here may be the hardest part for some people . . . getting your monthly income to cover all the bills.  If that’s the case you’ll need to find either an alternate source of income or a way to trim your budget.  See some of the other articles here for help on reducing your overall bills.)  So where was all my money going?  I stared looking at my bank statements.  Debit here for $20, another here for $30, one over here for another $20.  I had nothing to show for those debits to restaurants, the grocery store, junk, snacks, clothes I didn’t wear.  I hadn’t even thought twice about sliding my check card through any register without even paying attention to the cost.

I decided then and there that I needed a better spending plan.  Obviously I couldn’t be trusted with my own check card.  I decided it was time to go back to cash.  If I only used cash and left my check card at home in a drawer, I couldn’t spend what I didn’t have budgeted for that particular expense.

At that point I went through and decided how much of each bill needed to be paid with each $380 check.  I couldn’t pay out $300 to my credit cards and still expect to have enough left over to eat, drive to work, and pay other bills due at the same time. 

Because things aren’t all due on the same days I mapped out my income and when bills were due over the next several months.

They weren’t quite as clean as this.  Sometimes I had to “borrow” from my gas fund or grocery fund in order to pay rent or credit cards on time.  After I got my spending back under control, I started depositing all of my check except what was allocated for groceries and miscellaneous.  I started using pay at the pump again for gas and paid all of my bills online.  I still only use cash for any shopping.

For years people have raved about how much better it is to own a home, “when you pay rent you are throwing money away” “owning a home is a great investment” blablablah. With the housing market recently dropping, many people are rethinking their “great investments”.

In a healthy market, the average home prices go up about 3% a year. If you have a $100,000 home in a good market it should go up $3,000 in value every year. But as we have seen recently, that is not always the case.

By the time you pay off a $200,000 home in 40 years, how much will you have spent in paying all of the hidden costs to owning a home?

Taxes: federal, state, county and city.
Utility fees:Water, garbage and sewer fees 
Insurance: fire, flood, etc.
Building maintenance: siding, roofing, plumbing, garage door, patio door etc.
Appliances: refrigerator, stove, dishwasher, hot water heater, etc. 
Yard maintenance: mowing the lawn, tree removal, new fence, new porch, sidewalk and driveway repairs, etc.
Unexpected costs: broken sewer pipe that needs excavated, broken water pipe that flood the home that insurance won’t cover.

When most people sell a home, they usually don’t recoup any of the additional costs they invested into it. They usually have to sell for fairly close to straight market value.

You can sometimes get a monthly mortgage payment for a home that is a little more or equal to renting, but when you add in all the additional costs, is it really that much better of a deal?

Yes, there are many stories about how people are getting rich “flipping” homes and wheeling and dealing real estate, but there are also many stories about people getting rich in Vegas. The reality is, people usually buy and sell homes at market value and never regain remodel or maintenance investments.

I’m not saying owning a home is bad, just that there are trade offs in time and money for general maintenance. Be sure you do your own independent homework and really understand the costs of home ownership. Owning a home is not always the great investment the real estate industry likes you to believe.

Packaging and processing food costs

Food is a great way to save money we have to eat everyday, and food is usually a large percentage of our financial budget. Any cut backs in our food budget will help most people considerably. Here are a few variables to consider while balancing food costs.

Less processed food
Many times the less processed food is, the cheaper it will be because you are not paying factories and processing plants. Buying flour instead of buying baked bread or buying a potato instead of buying a box of dehydrated potato slices is often less expensive.  You do have to spend more time preparing the food yourself, but sometimes we have more time than money.  You do have to be careful to not overbuy fresh foods and produce that you will not be able to use before it goes bad.  A 10 pound bag of potatoes might be considerably cheaper than a 5 pound bag, but consider if you are going to be throwing away part of the bag because you can’t use them all in time.

Processed food
Sometimes processed food can be cheaper than making your own. For example, if you go out and buy a jar of regular brand name strawberry jelly, it will be a lot cheaper than buying a pound of strawberries and making your own preserves. Big companies can often purchase fruits and vegetables while they are in season much cheaper than the average person. The companies can then process mass amounts of preserves cheaper than most of us can. If you are lucky enough to live near a good food source in season, you might be able to get things in season cheaper than your local store sells them processed.  If this is the case, and you have the space, you might want to look into canning or freezing in season foods for later use.

Less packaging
The more packaging a product uses, the more it costs to produce the product and get it to the shelves. Many times the packaging will cost even more than the food inside. Those little packages of stuff for lunches and snack size foods are a good example of extra packaging costs.  Single serve sizes usually cost around a dollar each for a small amount of actual food. Many items (especially snacks) are much more affordable to purchase in bulk and separate into your own single serve sizes. Many items can also be purchased in bulk and frozen for later.  Again, you want to be sure to limit your bulk purchases to amounts you will be able to use and also to items you normally use.
Keeping these points in mind can save you a considerable amount on your overall food bill.