PocketCoinage

I’m not sure why a lot of people cringe at the thought of budgeting.  It is a good way to get your finances under control.  In order to budget properly, you should have an understanding where your money is going.  An hour or two of your time can change the way you look at your finances.

I budget based on my bi-weekly paycheck.  I take my monthly expenses, divide them into two, and put them into appropriate savings accounts.  The advantage of this is I am not tempted to spend the money.  I find that if it’s in my checking account, I am more likely to spend it.  The other advantage of my bi-weekly savings is that I will build another monthly payment over the course of a year. This is particularly useful for building that extra mortgage payment every year.  Some mortgage companies charge you to change your payments from monthly to bi-weekly.

Budgeting for Variable Bills
I’m still working on this area in my personal finance.  One example of a variable bill that I have is the gas and electric.  I’m thinking about taking the average price of the bill over the past year and putting that amount away into another savings account. So when my bill is $50 in the spring or $250 in the winter, I will have enough money to cover it all. Sure, I can assume the worst case and always put away $250, but that will limit my cash flow.  Have any suggestions?

How do you budget?

Somewhere along the way, I got addicted to bottled water.  I found myself drinking at least 5 bottles a day, which is a little more than a case a week.  A case of water at Sam’s Club has 32 bottles and costs roughly $5.  Each bottle I drank ran me $0.16, which turned into $0.80 a day.  Over the course of a year, this totaled $292 and 1,825 bottles sent to recycling (or garbage if recycling was not available)!

Two years ago, I decided enough was enough and searched for alternatives.  That’s where I found the 1 Liter Sigg Bottle on Amazon for about $20.  The Sigg bottle is made from aluminum and the inside is coated with a water-based epoxy resin which, unlike plastic, does not leach out into the water.  The best part is, the inner coating does not alter the water’s taste!  If you were ever turned off by the reusable plastic water bottles because of the taste, you gotta give the Sigg bottle a try.

Over the course of a year, this would translate to $0.05 a day to use it.  I did not factor in the cost of using a Brita or Pur filter, but the overall cost-per-day is far less than 80 cents and creates far less waste.

Over the course of two years, I saved $584 and 3,650 bottles from the landfill!  Finally, a good habit to break.

I like to think that I started my journey toward financial freedom when I turned 18 with my checking, savings, and credit card.  However, the more I think about it, the journey began early in my childhood with my parents.

When did you open your first checking, savings, and credit card accounts?  Did you do things in a particular order?  Any reasons why?