Budgeting and the Art of Stretching your Dollar

NAME: Z
STATUS: Counting quarters
GOAL: A financial cushion
PEEVE: Pennies
GLEE: Paid-off credit cards

Our son Troy usually wants to stay in the car when I stop to buy a few groceries because if it is “that time of the month” I will pull out a plastic baggie filled with quarters (mostly) and count out $1 stacks of them.

He finds this embarrassing.

We try to stick to a spending plan. I like that phrase better than “budget,” just as I prefer “nutrition plan” to “diet.” By the end of the month, our cash flow is a bit weak. If I can pay for a few odds and ends with loose change and delay breaking any paper money for another day, we may keep our plan on track.

Our plans are not grand. Clay and I sat down a year ago to re-prioritize our finances. One of the big ones was having a three-month cushion in case the economy ate our jobs. We are halfway there. We saved some money by getting new quotes for our auto and home insurance. We agreed on a set level of spending for entertainment – movies, eating out, a concert here and there – and agreed that if it didn’t get spent, half of it would go to our vacation fund and half of it to puffing up the cushion.

I pack good food for Clay when he is on the road; I map out meals for the week every Sunday night so we aren’t tossing money away on take-out. For us, eating out, even at an inexpensive casual spot, is an event and not an answer to poor planning. For Troy’s class at school, I make treats rather than buy them. A huge pan of Rice Krispie bars with chocolate chips is not time-consuming or expensive. My bad habit is stopping for a Diet Coke and a nutrition bar of some kind because I didn’t eat lunch. Three times a week adds up to $50 a month, which is $600 a year. That, my friends, is a long weekend at a rental cabin with a hot tub AND a fancy dinner PLUS some extra money for our rainy-day fund.

The little things add up. Keep a small notebook and write down everything bought for a month, no matter how small. When we did this I was horrified. The places where we could save money were really obvious and paying attention to them has made a difference.

Troy should be relieved that even his mother draws the line at counting out pennies at public cash registers. Pennies bug me. Though I know pennies are legal tender, I don’t want them. They weigh me down. Yet even pennies add up – I put ours in old cookie tins and donate them every holiday season to Ms. Cheap’s drive to benefit Second Harvest. This year, Troy is in charge of collecting and counting the household pennies, which gives him good lessons in math, money management and kindness. You can’t put a price on that.

Q: I need to save money – where should I start?

A:Too many people don’t save money because they don’t know where to start! Pick one grocery or drug store, start pulling coupons for all your pantry items or just cut back on eating out. If nothing else, start keeping track of your spending so you know where your money is going each month.[read more!]

All the above information has been reviewed by this week’s expert.