A Mini-Budget is used to spend irregular income such as tax refunds, bonuses, and inherited money. It can also be used to budget for a home project, wedding, or other event.
Here is how it works – let's say you are going to be having a wedding. Lord knows how much money we can spend on a wedding! The average is OVER $20,000! It strikes fear into every dad who has a daughter. It strikes TERROR in every dad who has daughters!
Anyway, let's say the budget is $20,000. SPEND THE MONEY ON PAPER FIRST!!! You are MUCH MORE LIKELY to stay within the budget if you actually think through the expenses IN ADVANCE!
So you pull up the Mini-Budget form (link is later in post) and spend the money on paper FIRST.
You can see that the $20,000 has been spent 100% on paper. The chances are GREATLY INCREASED that this family will not overspend on this wedding (if you call $20,000 not overspending – ouch!).
See how it works? GREAT! What do you need to budget?
Get a copy of the MINI-BUDGET tool HERE.
Need help in overcoming budget-busting expenses? You know the big ones – Christmas, the quarterly insurance premium, the annual property taxes, etc.
Here is a simple way to smooth out these large expenses.
In the example, you can see some certified, bona-fide budget-busting expenses. Wouldn't you agree with me that a $450 or a $950 hit in a single month's budget would BLOW UP a budget? ABSOLUTELY! To eliminate this peak-and-valley, feast-and-famine style of living, take the time to list out all of your KNOWN, UPCOMING expenses and their associated annual cost.
In the example above, the annual budget-busting expenses total up to $4,400 per year.
Divide this number by 12 months, and you arrive at $367/month. If you save $367 EVERY SINGLE MONTH, you WILL be able to absorb these budget-busting expenses without the huge headaches that you may currently be experiencing!
Don't believe me? Ask anyone with a Christmas fund or a home mortgage escrow account! These are really nothing more than budget-buster smoothing tools! Why? Because mortgage companies and businesses have realized that if the costs are not smoothed out and absorbed monthly, the chances are unlikely of you having enough cash on hand when the bill arrives otherwise.
It is amazing to me how much I have screwed up in the management of money!
Jenn and I lived for three years with a double income and no children and somehow managed to not only spend everything we made, but to also spend MORE than we made!
What an embarassing situation it was when Jenn and I stopped and looked at how we were managing money! I mean, we had both made a ton of money as professionals straight out of college, and we had very little to show for it. It was sad. It was humiliating. It was not fun.
When we turned 180 degrees and determined that we were going to manage our money God's and Grandma's way, we started winning financially!
One of the key reasons we changed our behavior was the fact that we had a daughter. I did not want to have to explain to my daughter that we could never go on vacation because we had acquired a load of debt. I did not want to be bound to a job "because it pays the bills".
As a result of our life-changing experience in the way we manage our money, we have had plenty of opportunities to teach our daughter how to manage her money.
Recently, I had the opportunity to interview my daughter as part of the Financial Freedom Class that I teach. You can listen to the interview HERE. The actual interview starts a couple of minutes into this segment.
If you can't tell, I am proud of what my daughter has learned! I keep telling her that she has more in the bank than 70% of the American population (who are currently living paycheck-to-paycheck despite the fact that they have earned more than $500,000 in the last 10 years!!!!!!).
Your child can start learning about money TODAY – even if she is only four years old!
If you have been paying attention at all to the finance world, you know that it is important to have a diversified portfolio.
You do not want to have all of your eggs in one basket – such as having a majority of your money invested into a single stock.
Well, I believe that I have a well-diversified portfolio through a variety of mutual funds. The issue is that all of these investments are impacted by global/world/regional events that may or may not have anything to do with the mutual funds I own.
This is why I own a house. It is an investment that helps my financial portfolio become more diversified.
I have owned quite a few homes, but the home I now own is the first older home I have purchased. This house was in some dire need of structural improvements AND decorative updates.
However, I bought this house at a discount because of all of the issues with it. It was NOT move-in ready.
Here is a list of problems that it has/had:
- Dog pee all over the carpets
- Dog damage from climbing on window sills, digging up the yard
- Rotten floor
- Leaking roof – several spots
- Sagging roof
- Old appliances
- Wood paneling with horrible wallpaper all over it
- Leak damage on the walls/ceilings
Now, I am the son of a home builder. I know a little bit about working on houses. I will tell you that this is my first attempt at updating a house myself. As a result of this project, I have developed a short tip list for you should you consider doing this.
- If you have no clue about updating houses – do NOT do it unless you have a pile of green portraits of Ben Franklin that you want to donate to others.
- Have a contigency fund for the problems you will discover as you fix other known problems
- Get help when you get in over your head
- Don't move in to the house until you have fixed the structural issues. It is so much easier to complete a major project when you are not living there!
- Develop a budget for the projects and HOLD TO IT! Be realistic on estimated costs!
- Cry when you need to. It lets some of the frustration and anger out.
In the end, you will have a nice house for a good price and have some good ole sweat equity built up!
Time for some more budgeting/saving tips:
- Coupons.com has a lot of great coupons that you can print out
- MyCoupons.com has a lot of great information on deals that are being found at various stores
- Buy off-brand items. Yes, some will taste like sawdust, but others are identical to the name brand. If you have an ALDI grocery store in your area, it is worth the drive to purchase groceries there. We save at least $50 a month by buying our essentials there – milk, bread, canned foods, eggs … As a side note, their eggs can be somewhat non-uniform – I get double-yolk eggs, oblong eggs … It is really interesting.
- Try to go a week without going to the grocery store. Put together meals from stuff that is in the cupboards! You will enjoy some concoctions that you have not had in awhile (or never), AND you will be able to save a week's worth of grocery money to put toward your emergency fund!
- Have the kids mow the lawn and do the landscaping instead of paying someone else to do it. Pay your kids and teach them how to save/give/spend out of that money! Can you spell, "LEARNING OPPORTUNITY"?
- Cut all of your kids hair. It will save many families $20 – $40 per month!
- CONSIGNMENT stores/Goodwill/Salvation Army. You can find some great deals on clothing there!
- Shop your insurance for quotes. Get at least three quotes and obtain one of them from an independent insurance agent. You may be able to save $100 – $500/year on your insurance!
- Take a low-budget vacation instead of that $3,000 one. You will find that you will have just as much fun, and you may be able to save $2,000 – $2,500 toward debt reduction, emergency fund, or retirement fund!
- Sleep on major purchase decisions. This will really help you to avoid "impulse" purchases like a new car, a pricey vacation, a new plasma TV, etc.
- Get rid of the home telephone. Many people have so many cell phones that the home phone is becoming obsolete. For basic home telephone service you will pay $25/month, and it will not come with the basic features that a cell phone has – free long distance, caller-id, call waiting, voice mail, camera, text messaging, games, etc.
- Get rid of the movie channels on cable. It is loaded with a bunch of trash movies anyhow, and it leads to a loads of wasted time.
I would love to hear more ideas on how you can save money. You leave a comment or contact me HERE.