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Summer Vacation on a Budget!

A summer vacation is something most of us eagerly anticipate.  However, if we do not plan and budget for our retreats, a vacation could easily break the bank.

When you travel this summer make the most of your time and most importantly your travel dollars.  The following is a list of money saving travel ideas:

·        Vacation at national parks: Not only do you get to enjoy the beautiful outdoors, you also get budget friendly park entrance fees (ranging from free to $15) and camping is $15 dollars a night at most locations.  If you are traveling in a motor home or travel trailer and you can go without hook-ups for a day or so you can park in a Wal-Mart parking lot for free. 

·        Rent a place: Get together with friends or family and rent a home or condo.  This is cost effective because splitting the cost of a rental can be less than a hotel.   You can also cook your own meals rather than eating out.  Make sure that as a group you agree on a vacation destination that fits your budget and your travel plans, so problems don’t arise later.

·        Shop hotels for best prices: Call hotels directly to get the best rates available. 

·        Pack a cooler:  If you are driving, pack a cooler full of drinks, snacks and meals for the trip, so you can avoid higher priced items along the way.  You can easily stop at a grocery store to refill your cooler.

·        Keep an eye out for good deals: Most vacation spots have publications available for tourists that have guides for hotels, restaurants, activities, and attractions.  They also usually include coupons for these services.  Talk to locals and ask them where they would recommend eating and what activities and attractions are the best deals in the area.  You can also use the internet and do some research to find deals and affordable entertainment before your vacation.

For a memorable and enjoyable vacation, plan ahead, stick to your budget, and have fun. 

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Americans Saved Minus Money in 2005!

By Lyle Hansen Extension Educator/Personal Finance

 The Commerce Department recently reported that in 2005, Americas’ personal savings rate was a whopping -0.5%.  No, this is not a misprint; Americas’ average personal savings was negative.  You might be asking yourself--how can this be true?  Basically, in 2005, the average American spent all of their disposable income (the money left after paying taxes) and had to increase their borrowing or dip into previous savings.  The scariest thing about the -0.5% savings is this was the lowest number since the Great Depression in 1933!   

With the unpredictable rising costs of energy, gas, homes and other items, we cannot afford to forego saving money.  Saving money is not always easy, but by learning and practicing money management strategies, you can build your savings.   

The first step in learning to save is deciding how you want to spend your money.  There are two basic spending categories, needs and wants.  Needs are necessities, such as food, shelter, healthcare, and transportation. Wants are extras that we like to have, but are not necessary.  We can spend less money by limiting purchases of “wants” and put the cash saved in personal savings instead.  Every decision to spend money affects your ability to save. 

The second step to saving is by tracking your monthly income and expenses.  This helps you see a picture of how much money you bring in and where your money goes.  Below are five methods you can use to track your monthly expenses. 

1)      Receipt Method: This is an easy way to track spending, but make sure to get a receipt when you buy something.  Label all receipts with categories, such as food, entertainment or clothing.  Keep receipts in a storage container, recipe file or large envelope that is divided into spending categories.  Payment receipts for utilities, insurance, etc. should also be filed in the storage container.  When using credit or debit cards, file receipts under the spending category, such as food or clothing.  If you don’t get a receipt, make one, label it and file it in the proper category.  Sort the receipts at the end of each week and write down the amount spent in each category.   

2)      Envelope Budgeting Method:  This works well when paying with cash.  It requires little paperwork.  Label an envelope for each expense category (rent, utilities, food, etc.).  Write on the envelope the cost of each item that will come out of that envelope, the date the item will be bought or when the bill will be paid.  When you receive income, divide the cash or “play money” into the envelopes for each expense category.  Inside each labeled envelope, put the amount of money you plan to spend in that category this month.  You don’t have to record how much was spent; just replace the money with receipts.  Pay bills promptly so you won’t receive late charges.  Keep envelopes in a locked safe place if you use real cash.  Try not to shift money from one envelope to another or “borrow” it.  If there’s money left in an envelope at months end, you’ve done well.  Deposit leftover funds in a savings account and start the new month.                   

3)      Calendar or Notebook Method:  This uses a calendar or notebook to track income and expenses.  List income on the date received. Write bills and expenses when they are due. As they are paid, mark that bill off the calendar.  The calendar or notebook provides a spending record at tax time and can also be used to store bills before payment. 

4)      Checkbook Method:  Works best when using checks or debit cards for all bills and purchases.  Prepare a monthly spending budget based on anticipated income and expense needs.  Track expenses by using a checkbook register.  Recording each check or debit card transaction, will provide an accurate record of spending.  Include the date, check number, name of the person or business, and amount of purchase in the checkbook register.  For each entry, note the spending category.  At the end of the month, total the expenses from each category and compare them to the amounts budgeted. 

5)      Computer Method:  This tracks your expenses via computer.  Expenses are categorized by spending areas.  These records are useful at tax time.  Buy personal finance software or develop your own spreadsheet categories.  Using a computer to manage finances is easy and records can quickly be updated.   

Use these methods of tracking expenses individually or in a combination.  The key is to use a method and find what works for your financial situation.  The first couple months of using a tracking method can be challenging, but with more practice, it gets easier.   

It is still early in 2006.  Begin using one of the five tracking expenses methods, get control of your spending and make 2006 a positive year for savings. 

Look for future Focus articles on Money Management topics.  Dollar Decisions is a University of Idaho Extension workshop that teaches participants about tracking expenses and developing a spending and savings plan. 

This workshop is available to groups free of charge.  For further information or questions you can contact Lyle Hansen, University of Idaho Extension Educator in Jerome County at 324-7578 or lhansen@uidaho.edu 

Source:  University of Idaho Extension, CIS 1112 Dollar Decisions Tracking Income and Expenses curriculum, 2003.

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Budget Grocery Shopping

Saving money at the grocery store on a regular basis takes planning and practice.  Here is a list of ideas that can help you get the most out of your grocery dollars. 

1-  Create a food budget:  Take the time to figure out how much money your budget allows for food each month.  Divide your monthly food budget by how many times you shop each month.  Get cash for the budgeted amount and only take that amount to the grocery store.  This will assure that you only can spend what you budget. 

2-  Plan meals and snacks before each shopping trip:  Write up a menu of the meals and snacks you plan to prepare for the week, while making sure they are affordable and fit your food budget.  Consider using the food you may already have at home on your menu, which will save you money and help clean out the cupboards.     

3-  Make a list of the foods you will need to prepare your meals:  After checking the cupboards, review your menus and make a list to take to the grocery store.   

4-  Shop the grocery store ads and look for coupons:  This will save you money!   

5-  Don’t shop on an empty stomach:  Hungry shoppers usually end up buying unnecessary expensive items.   

6-   Avoid the end caps:  Grocery store end caps are attractively displayed to entice shoppers to make additional purchases.  

7-  Shop at discount grocery stores:  Discount grocery stores usually offer food and other products at deep discounts.  The food may be sometimes near the expiration date, dented, or damaged in some way.  However, by carefully examining the products you can usually find good quality items and save money!   

I hope these suggestions will help you stick to your food budget and save you money at the grocery store.  Happy Shopping! 

For further information or questions you can contact Lyle Hansen, University of Idaho Extension Educator in Jerome County at 324-7578 or lhansen@uidaho.edu

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How to Make Free Money!!! 

This is not an article about some get rich quick scheme or some other strings attached attempt to reel you in.  This is an honest way to earn free money…no joke!  Many of us are missing out on free money and it is staring us right in the face!  The free money is the 401(k) retirement plan match that most employers offer as a benefit to their employees.  That’s right! Your employer will give you free money!  Here’s how it works:

 Employers will typically match anywhere from 25% to over a 100% of the amount the employee contributes to the company’s 401(k) plan up to a certain % of an employee’s salary.  Think of an employee who makes $30K a year and is eligible for the company 401(k) plan, which matches 50% of the employee’s contribution up to 6% of the employee’s salary.  If the employee contributes 6% in their 401(k), they would invest $1,800 and the company would invest a $900 match a year.  Furthermore let’s assume that the employee is 30 and contributes the same percentage until retirement, at age 65, and earns an 8% return on their 401(k).  At retirement the employee would have a 401(k) worth $333,034.  Not bad for only investing $63,000.

Talk to your employer’s human resources representative to learn more about your 401(k) benefits and ask plan specific questions.  If your employer offers a match on your 401(k) plan, take advantage of the free money they are offering.  If at all possible, contribute up to the % your employer is willing to match.  If you are unable to commit that much of your paycheck and still make ends meet, start with a lower % and set a goal to contribute more in the future.  You can also create a budget and track your expenses to find ways to cut your spending.  The money you save by cutting expenses can then be contributed to your 401(k), which will allow you to earn free money.

For further information or questions you can contact Lyle Hansen, University of Idaho Extension Educator in Jerome County at 324-7578 or lhansen@uidaho.edu

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