Financial Advice: Part 3: Fine Tuning a Budget

part 1: creating a budget
part 2: living with a budget

Budget Sculpting
==
Guideline Budget

1. Housing 25-38 %
2. Food 10-15 %
3. Auto 12-15 %
4. Insurance 5 %
5. Debts 5 %
6. Entertainment 5-7 %
7. Clothing 5-6 %
8. Savings 5 %
9. Medical 4-5 %
10. Misc 5-8 %
11. Investments 8-13 %
12. School/Child 5-10 %

Housing
==

* don't overextend

+ move to a samller house
+ homeowner's insurance

- find best quote
- raise deductible

* utilities

+ shop around
+ ask questions for hidden costs
+ use quote from one company against another
+ place long distance calls w/ cell or during low rates
+ e+mail

* electricity

+ thermostat @ 68-70 in winter
+ thermostat @ 74-78 in summer
+ wear layers, and blankets to stay warm
+ move fans to stay cool
+ don't blast heat when cold
+ don't blast A/C when hot
+ close unused vents
+ in two story, close vents on upstairs, heat from downstairs should be enough
+ buy 130v light bulbs - last 5 times longer than regular bulbs
+ use low watt bulbs in places that don't require direct lighting

* water

+ don't leave faucets running if you don't need to
+ don't do half loads of laundry

Food
==

* Sales and special offers are cyclic, pay attention
* comparative shopping

+ keep track of prices at different retailers

* plan your meals in advance
* bonus tips

1. Double check the receipt
2. Don't go to the grocery when hungry
3. Bring calculator, keep a running total
4. cut back on paper products
5. Avoid prepared foods, ie: frozen
6. Buy generic or store brand
7. Clip and save coupons-but only the items you would buy normally
8. When possible, buy food in bulk
9. Stay out of convenience stores
10. leave children at home

* eating out does not count under food

Autos
==

* don't buy a new car
* Making a purchase

+ cheapest car to drive is the one you're already driving
+ pay cash for a car, otherwise, get a loan from a credit union bank or wealthy family member
+ when negotiating price ofa car, don't include your old car as a trade-in. You'll usually make more by selling it on your own
+ Talk to the previous owner of the car
+ Don't allow yourself to get caught up in the salesperson's pitch. Know what you want and the price you are prepared to pay before going to the dealership. Be willing to walk away.

* Maintenance

+ Set up a written maintenance chart, follow suggested maintenance schedule in manual
+ Check vehicle's gas rating, use cheapest fuel recommended
+ Look for different insurance, find the best quote, use it against each other. Your policy should include liability coverage. Your deductible should be at least $100.

Entertainment
==

* eliminating most of your entertainment fund isn't considered healthy
* plan vacations during off seasons
* alternate paid entertainment, such as movies and concerts, with free activies, such as board or card games
* limit yourself and/or kids to one sports league
* develop a home workout program

Clothing
==

* buy items on sale
* shop in less expensive stores
* make a written list of family apparel needs and buy clothes out of season
* buy outfits that can be mixed
* outlets
* stay away from dry-clean only

Medical
==

* preventive medicine - eat right, brush your teeth
* take care of your body through diet, rest, exercise
* regular checkups