Budgeting your Savings - Did You Let Your Piggy Bank Get Away?

I think most of us have at some point in our lives. Some how we forget to feed the little piggy. And, like most neglected "pets", your piggy bank will disappear if you don't feed it. A personal budget is important to create financial independence and setting goals for feeding that "piggy bank" should be an important part of your budget!

The most successful financial plans allow you to INVEST IN YOURSELF! It just makes good sense. A plan to build financial security should always be considered essential to any budget.

Even if you're on a plan to reduce debt, you need to include plans to build a foundation for future financial security. A good savings routine and variable expense account are essential to building a strong foundation for financial independence.

A variable expense allowance in the budget is important to save for those expenses that seem to "hit us unexpectedly". Funny thing is, we know these expenses will occur. They are an inevitable fact of finances for most of us. So, why do we call them unexpected? I can't explain why, but there are many of us who make this very BIG mistake in our budgeting.

Some expenses don't occur monthly. Some are paid out every now and then, quarterly, yearly, or bi-monthly, or semi-annually. These are expenses like car insurance and maintenance, home insurance and maintenance, property taxes, income taxes, medical expenses (prescriptions, deductibles, co-pays), pet care, school expenses (supplies, trips, activity fees, books), and clothing. Some of these are huge expenses that can put a ripple in any good budget if not planned for.

Most of us have good intentions, but it's easy to fall prey to the credit card companies without a plan to cover all of these "unexpected" expenses. The term still makes me chuckle. I mean, don't we "expect" to wear clothes? It's even funnier to me knowing that I was guilty of this very thing. Poor Planning! Not expecting what should be expected.

Lesson ???.Don't forget about this expenses in your budget. They will sabotage the best of intentions!

The other essential ingredient to a successful budget is a savings plan. A good savings plan should have a goal to reach at least the minimum amount necessary for you to survive for a three to four month period. It may take time, but this a strategy that provides a fail safe against a financial crisis. Crisis such as serious illness or job loss.

Trying to save money by cutting your savings budget out will eventually backfire on you. It is essential to build financial security, in order to remain debt free, you must not compromise your savings expense.

Only if there is no way to avoid it should you reduce the amount of your monthly savings commitment.

Start with 2-4% of your monthly income if you have to. A little is better than nothing, and then you can build it up from there to at least 10% of income as funds become available.

Some Important Points:

Applying extra funds to your debt first will not help you gain financial security. Emergency savings and variable expense savings goals should be met before debt is reduced in order to remain debt free. After all, these sources will be the foundation you will fall back on in order to remain debt free. If you can build a reserve for emergencies you won't have to use those nasty credit cards. This is an important defense that builds financial security. If you use a good debt reduction plan, debt will reduce, and in a reasonable amount of time. As long as you stop creating debt. Just be patient.

Paying more on your debt, instead of saving, is not going to help you pay for that major car repair when the car breaks down. It will most likely do the opposite of your intended plan and send you running for the credit card to bail out.

Of course once you have reached your goals for savings and your variable expense account, then you should start applying extra funds to your debt reduction plan.

Using money saving tips reduces expenses in your budget in an effort to help you build that financial security. Through saving money on everyday expenses and living a frugal lifestyle, you free up monies to apply to your savings and variable expense account. These are the defenses that build a strong foundation for your financial independence.

These "defenses" prepare for the inevitable expenses that will arise. Many of us had just forgotten to plan correctly for these types of expenses. That's how we got in the "big red mess" to begin with. Properly preparing for necessary variable expenses is your defense against feeling the need to use the credit cards.

Once you have balanced your expenses with your income, you have created a Budget for Debt Free Living. Congratulations! You are on your way to financial freedom and security. Enjoy! This concept is simply "living within your means." Something that many of us in today's "plastic society" have forgotten to do.

Live Debt Free to Be Free. You Deserve It!

Cheryl Johnson is a mother of four helping herself and others become and stay debt free. Publisher of Simple Debt Free Living at http://www.simpledebtfreeliving.com - A self-help plan, ideas, and resources for debt management, household budget planning, frugal and debt free living, and extra income opportunities. Money saving tips for groceries, clothing, gifts, home decorating, weddings, and much more. A money saving tip a day keeps the credit card away.

---

Simple Ways to Save Money

Things are so expensive these days. We seem to be... Read More

Budgeting -- The Critical Flaw That Causes Most Budgets to Fail

Budgeting. It's a word we're all familiar with. Everyone knows... Read More

Safely Save for Your Childs University Studies Using An Education IRA!

This investment retirement account (IRA) is useful to you as... Read More

10 Quick And Cheap Ways To Cut Your Heating Bill

When you received an energy (heating) bill last winter, were... Read More

Dramatically Improve Your Stock Trading Success

Get Access to Realistic profitable strategies & discover the mindset... Read More

How Electronic Checks Work ? Will Paper Checks Eventually Go Away?

Traditional checks probably won't disappear anytime soon, but processing checks... Read More

Financial Fitness - Are You Exercising the Right Muscles to become Financially Fit?

Are your financial muscles well toned and healthy or flabby... Read More

How to Attain Your Dreams on a Single Income

If you recently became a single parent and see your... Read More

Check Fraud and Verification

Before buying personal or business checks you should inform yourself... Read More

Benefits of Personal Finance Software

In this age of information, keeping track of your finances... Read More

7 Simple Ways To Save Money

Each of us knows how to spend money, but do... Read More

The World is Not Enough - Calling for a More Ethical Approach to Personal Finance

At a time when the entire world's attention is focused... Read More

University: A Course in Personal Finance

Recent findings from the Educational Policy Institute indicated that the... Read More

Are You Ready To Be Fired?

Your boss has just informed you that your department is... Read More

Your Dry Cleaner?s Double Standard

Women are charged more for dry cleaning services. Don't fume,... Read More

First Checking Account ? When is it Time?

We all know that money doesn't grow on trees, but... Read More

What is ChexSystems?

Commonly referred to as the first of the three major... Read More

How To Free-Up 10% to 15% of Your Income

Would you be interested in freeing up 10% to 15%... Read More

Want Your Savings to Earn a Higher Rate of Return? Try Internet Banking

Doesn't it seem like the only impressive numbers we've seen... Read More

Risky Business: You May Not be as Daring as You Think

I thought I was through with exams when I finished... Read More

What Are We Teaching our 2005 Graduates about Money?

Now that we are in the month of June I... Read More

Identity Theft ? More Tips on How it Can Be Avoided

Recent security breaches at several credit card companies continue to... Read More

How To Protect Yourself Against Identity Theft

Identity theft is a serious crime that continues to grow.... Read More

Why Live Frugally

What is it about being frugal, why do it at... Read More

More Money? My Cup Runneth Over...But Im Still Thirsty

Most of us, especially those of us who have debtor's... Read More

10 Steps To Improve Your Financial Situation

Here are ten steps you can follow to help improve... Read More

Organizing Your Finances - Thinking Outside the (Shoe) Box

If you're like most people, your personal financial records are... Read More

The Wonderful World Of Address Labels

Ever wonder where address labels come from? Avery® is perhaps... Read More

How To Place an Online Order for Checks ? It is Easy as 1-2-3

If You Have an Existing Account and 5 Minutes, You... Read More

Knowing Me, Knowing You: Why ID Protection Plans Are Flawed For Fraud

ID theft is a major consumer concern, though there is... Read More

College Expenses: Seven Ways to Save on an Education

Many people graduate from college owing thousands of dollars in... Read More

Saving Money - Are You Doing Enough?

It is estimated that we, as consumers, waste an average... Read More

Expenses A ? What Are They And What Can We Do About Them

It is crucial as an individual who is striving for... Read More