Budgeting tips?

[Nomilynn]

I'm wondering if anyone has any tips they can give to me about how they keep their budget under control. I am self admittedly not good with money, and I am doing ok right now but I have two credit cards that I want to pay off right now before they spiral out of control. My idea is to pay off the one where the balance really isn't all that much, so I can focus on paying off the one with a higher balance by doubling my payment using the money I would normally pay on the other card. I also use an excel spreadsheet to keep track of my expenses.

What are some of your tips and secrets?

[ramanth]

I have no advice because I'm in the same boat.

Good luck!!

[Shelteez2]

I'm addicted to the tv show 'Til Debt Do Us Part and the lady on there always says to look at the interest rates and pay off the card with the highest interest rate first. She suggests just making the minimum payment on the card with the lowest interest rate and the rest of the money to the card with the higher interest rate.
One other thing she suggests is putting 10% of what you make into savings. I've started doing that and it adds up quickly.

[Karen]

Try calling the credit card with the higher rate and ask if they will reduce the interest rate by a point or so for you - that sometimes works, explain you've been a customer for X years, etc. And do work on paying that one down first. If you can, pay more than the minimum for the other card as well, so you are at least making a dent in that one, too.

Have you made a budget,by which I mean make a list of all your standard monthly expenses - rent, electricity, credit card bills, etc., and then figured out how much you have to spend on things like food and other expenses? That's sometimes a good reality check, and might keep you from adding any new credit card purchases for the time being!

[prechrswife]

We use Dave Ramsey's envelope system and his debt snowball system for paying off debt. Google "Dave Ramsey" or "Financial Peace University." There is a class, which I have heard is excellent, but we haven't been able to do that. However, we did read one of his books (Total Money Makeover) that outlines the steps and have been able to follow the program that way.

The basics are that you budget everything, and take out cash for whatever you consider basics--groceries, clothing, whatever. Once you have spent the cash in that envelope, that's it for the pay period, unless you pull from another cash area. Don't charge anything. Start out by making minimum payments on your debts, and whatever doesn't go toward the envelopes or your minimum payments, put toward establishing a $1000 emergency fund. That way if something big happens, you use that instead of charging something or buying it on credit. (When our dryer died a couple of months ago, we were able to go to the store and pay cash for one instead of financing it.) Once your emergency fund is established, take that money you were putting there and put it toward your lowest balance debt, on top of the minimum payment. Once you get the lowest balance paid off, take whatever you were paying on that debt, and put it toward your next lowest, and so forth. Ramsey refers to this as the "debt snowball." Those are just the basics, though. There are more details to it. It's working great for us, though. We haven't used a credit card in I don't know when.

[Nomilynn]

Thanks for the tips. I've heard about a couple of these methods as well - the snowball idea is what I was thinking for the cards I have now. Thankfully, they are not really high balances so it won't take me long to pay them off - I just need to remain disciplined enough to actually do it and not just pay the minimum payments on them. Karen, I do have a budget - that's what I use the excel spreadsheet for. I think the other thing I could start doing is tracking all my expenses in a separate table, because right now if I buy something I never even ask for a receipt and if I get one, I throw it in the bin and never think twice about it.

I talked to my mom tonight as well and brainstormed a few ideas. I am even considering asking her to be in charge of my money until I get things back on track and create some new habits. I told her that I felt stupid for being 30 years old and needing my mom to manage my money, but she told me she was proud of me for wanting to do something to take control now rather than let it get out of hand. She said that age had nothing to do with it as long as I'm wanting to do it for me and feel ready, so that was helpful.

Keep the suggestions coming - I'm sure I will be able to use them all somehow

[Freedom]

Growing up, our folks taught us to put away half of every paycheck, and live on the rest. Dad said most folks find rent / mortgage will take about half. So even as teens, we had to give him half of what we made. Then, during times we weren't working (back in school, between jobs) he would give us money as we needed it, from that half.

Once out of school, that habit just stuck! I put half away in the back right off.

For me, this meant sometimes renting a smaller apartment, while for my bro, it meant sometimes living in a less desirable part of the city. (We females do need to consider safety a bit more, and he was never in a "bad" part of the city, just a place I wouldn't feel safe in). He was always fine where he lived. At one point, he had a 2 bedroom and I had a studio, lol. But time passed, we both got better paying jobs and things got sorted out fine.

As for the credit cards, I ONLY use 1, and I use it for just about everything: groceries, $3 at Dunkin Donuts, gas for the car (gulp!). So I have a record of every cent I spent, and I build my excel spreadsheet from my ONE monthly credit card statement. I can look at it online during the month, to be sure I haven't spent more than HALF of what I make.

[Nomilynn]

Thanks for all the info. Unfortunately, it is not possible to only spend half of what I make. I would not be able to pay all my bills, expenses, groceries, etc on only one paycheque per month and put the other away. However, I have given my credit cards to a trusted friend so that I'm not tempted to use them, and I will just keep chipping away on the balance and pay off one card and then double up the payments on the other. Please post if you have any more ideas.

[Pembroke_Corgi]

I agree about calling your credit card companies and asking if they will reduce your interest rate- it doesn't hurt to ask! I've contacted them before when they raised my rate (for no reason other than the economy) and they reduced it. I also agree that you should pay more towards the card with the higher interest rate, and more than the minimum payment.

I guess the other tips I have are to try not to eat out much as this can add a lot to your food bill (this is a hard one for me- I hate cooking and doing dishes!), and try not to spend more than what you allot yourself for certain budget areas. Another way to possibly save money on utilities is to try to save energy. Turn off the A/C when possible, or turn it up (so the house is a little warmer), etc. There aren't very many areas where it's possible to control what you spend- rent or mortgage, for example, so you could try focusing on changing things you can, like saving money on utilities or eating out.

Hope this helps a little. Lately I've been doing a lot of contract type work so I don't get paid until a certain time. I'm writing a report for a college right now that doesn't pay until the end of August- so we have to make due with my husband's salary and what we have in the bank till then.