Budgeting Beyond a British Columbia Cash Advance

by Michael Reubelt on December 30, 2011

One of the biggest mental roadblocks to creating a home budget is confronting the ways you actually spend your money. Most of us would rather live in denial.

But spending unwisely is not a terminal condition; it is possible to recover and still lead a full life. Once you’ve taken the first steps, tracking your household expenditures starts to become automatic. And for those times when life decides to ignore your budget with sudden car repairs, insurance deductibles or worse, a British Columbia cash advance can help you stay solvent between paychecks.

Creating a home budget should be approached as if your household was a business. Software such as Quicken or Microsoft Money make it easier, by assigning all of your expenditures to a particular category, such as “salary,” “clothing,” “groceries” or “child care.”

This software also lets you create subcategories and edit the list to reflect your particular household. If you are only worried about tracking your spending for dining out, travel, or shopping, you can create categories for those types of expenses, and leave everything else under “miscellaneous.” The snag with that approach is that you miss the opportunity to spot problem spending in other areas where you assume you’re being thrifty.

Most of us now use electronic banking, which lets you see at glance all of your debit card purchases and ATM withdrawals vs. deposits. With overdraft fees running as high as $40, it can be a prudent choice to apply for a British Columbia cash advance to keep your account solvent between paychecks. Budgeting software can help you track all your bank accounts and credit card expenditures in one location.

If software isn’t your thing, you can track your spending the way your parents did. Gather all your records from the past year: pay stubs, loans, bank and credit-card statements. Then go through and compile totals for your income vs. expenses in categories that fit your life. You may end up with spending that’s undocumented — typically this is money withdrawn in cash for lunches, coffee, gas, transit fares, etc. Try keeping a pocket journal for a month to record all your daily spending; then use that to build a model for how you are spending out-of-pocket year ‘round.

Your goal should be to reduce your spending to about 90% of your income, with the aim of saving or investing the remaining ten percent. It may quickly become apparent that the goals you set were unrealistic. If that’s the case, loosen the reigns. Setting yourself up to fail won’t help you build confidence in controlling your spending. Often it takes more than one attempt to create a budget you can stick to.

Eliminate trivial spending.

If you smoke, now’s the time to quit. Money spent on that pack (or two) of cigarettes every day could be better spent on groceries (or even a health club membership).

Look for other small, immediate ways to curb your spending. Forgo that afternoon latte. Wait for sales to buy clothes and household items, or look for discounts online. Try consolidating errands and shopping into as few trips as possible to save on gas. Turn the thermostat up a couple degrees in summer and down the same amount in winter. Wash the car yourself instead of paying someone else.  Little savings do add up.

Reevaluate your home’s value.

Homeowners may be able to cut their property taxes by challenging the value the assessor has determined. Find out the formula used to determine the house’s value (the assessment listed is often not the real value used to determine your property tax). If home sales in your neighborhood indicate that your house is worth less than its assessment, find a real estate agent to write an appraisal backing you up — this could save you hundreds of dollars every year.

Refinance your mortgage.

Check the current rates. If they are at least two percentage points below what you’re currently paying, refinancing could save you thousands every year. Many mortgage sites provide an online refinancing calculator that does the math for you.

The last word

As you learn to spend prudently, your relative income will rise. But inflation also raises the cost of living every year. Don’t start spending that newly found income on luxuries until you’ve built some kind of cushion in the form of savings or investments. And when those inevitable shortfalls occur, remember you can always apply for a British Columbia cash advance to get caught up on overdue bills or an overdrawn bank account.