Making Every Penny Stretch

Our money is being stretched in multiple directions every day. Someone, somewhere wants that dollar that is in our back pocket or purse. The laundromat, the hair-stylist, the grocery store, the mechanic, the barista at our regular coffee stand, and of course, don’t forget the government. All want to lay claim to that green bill, that piece of legal tender just waiting leave our wallet and find its way into a cashiers till. With all those hands out wanting a piece of our hard earned money it can be difficult to find enough of it to go around. And while it might be tempting to consider just cutting a few people out (that 25% to the government would be a fun place to start), the legal ramifications typically help persuade us to use a different method for managing our money.

What we need is a plan. I know what you’re thinking, “not the dreaded budget”. You can call it something else if it lowers your pulse a bit, but a plan is what the doctor ordered for your money. A spending plan for your money is want will help insure that each bill gets paid to the right person, at the right time, for the right amount. Wow, that was so profound. Hahaha. I know, but beyond the basics, a plan will also help you reach those goals you have jotted down somewhere (including the ones that jotted down in the back of your mind, like retirement and/or funding your kids college one day). A plan will assist you in saying yes to the items that must be dealt with (the home mortgage) and no to the items of less importance (that magic set that will fulfill your childhood dreams of becoming the great Houdini) during tight months.

A plan will help simplify your personal financial world. Get your money matters down on writing and put it somewhere that you’re going to see it several times a week. Repeat this step every month so that each dollar that comes in has to a home to go before the month is over. And here’s another novel idea, when there’s a little extra some month, start building up that emergency savings account! No really, it’ll pay big rewards when a future month is tighter than expected. Living on a financial plan doesn’t have to be a big, scary ordeal, but it needs to happen if you want to be successful long-term with your money.

Start the month off right!

Summer is in full swing. Temperatures are rising, vacations are happening, and bills are continuing to come in each month. Bills? You know, those little envelopes that show up in the mail around the end of the month for all the stuff we bought or used during the previous month. Yes, even though its summer and the kids are out of school and we might even take a few extra days off work to enjoy it all, we still have bills to pay and our personal finances to manage. I not writing this little note to keep you from enjoying your summer, I’m writing it to remind you of a simple way to make sure that in all the fun you don’t fall out of the financial boat that you’ve been diligently maintaining through the winter.

The best way to do this is by making a plan in advance. Simply put, before each month begins (July starts tomorrow so do this today!) spend all the money you have on paper. That’s it! Write a list of all the bills and expenses that you typically have, including those special trips and outings you may have planned, and then using your monthly income balance your budget in advance. Make sure every dollar has a home to go to in advance, and you’ll be less likely to spend money that belongs to another category (like spending your rent money on the 100 gallons of ice cream needed to combat the heat). Take the extra step and prepare the checks and stick them in their envelope marked with the date they need to be mailed and you’ll have even less “financial work” to do later on in the month. Following this method will also help keep your spending in check and ensure that all of your financial goals continue to be met during the summer months.