Save Money in 2012

I  find one of the best ways to start the new year is by establishing a family budget. 

We’ve actually stuck to a budget for years, but we veered away from it recently thanks to an especially busy fall. That’s really not an excuse, though, since it doesn’t take that long to do and you’ll feel like you received a pay raise once your’re done.

As popular financial author and talk show host Dave Ramsey says, monthly budgeting allows you to tell “your money how to behave.” You have control over your money rather than your money controlling you.

Make time to sit down each month and draft a budget. I know it’s hard to b disciplined, but it really only takes a half hour or so and you will be glad you did.

Begin the process by writing down the income you will bring in that month. Next write down all your expenses: house payment, utilities, phone, cable, grocery, gas, car expenses, child care, after-school activities, household expenses, insurance, retirement, college savings, charitable donations, clothing, entertainment, babysitting, and whatever other expenses you anticipate.

The next step is to stick to that budget. One easy way is to adopt an envelope system, which Ramsey touts a lot on his daily radio show. Create an envelope for each expense category and place that month’s cash allotment in its envelope. Once you have spent the money in that envelope you can’t spend anymore. Using cash helps you spend your money more cautiously. If you have money left over, put in your savings or money market account. Don’t spend leftover money in another category. For the system to work it’s important that you stick to your original budget.

If you follow this system throughout the year, you should find that you have more money to save. If you discover your earnings don’t cover monthly expenses and you’re depending on credit, it’s time to take a long look at your financial situation and perhaps re-prioritize.

Other great things to do this year to get your financial house in order:

• If you don’t have it, buy life insurance. It’s important that your family is taken care of financially if something happens to you. When a spouse/parent dies without life insurance, it can put an incredible financial burden on family members left behind because they have to cope with that lost income. 

• Create a will or update your current one, if needed. If something happens to you and you don’t have a valid will, it will cause unneeded stress on your family members at a time when they are grieving. 

• Plan before making any large household purchases or taking a vacation. Start researching now so you will be well-informed when you’re ready to make a purchase. We’re planning a trip to Orlando this year. I’m surfing the Internet and talking to friends who have traveled there to find out where to stay and eat so that I get the most for our money.

• Watch for sales, comparison shop, and clip coupons. Don’t buy things on impulse.

• Keep spending in perspective. Don’t try to keep up with the Joneses. The Joneses are probably swimming in debt. Take time to consider your purchases. Is it something you really want or are you just trying to keep up appearances?

The bottom line: be well-informed and engaged in your financial life. You will reduce your stress and be better able to enjoy your well-deserved earnings.

May your 2012 be filled with blessings and great money-saving deals!  

 — Bargain Beth is written by Memphis freelance writer and bargain hunter Beth Bartholomew.

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