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.


More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 403, exiting

More Personal Finance Information:

Related Articles


How To Free-Up 10% to 15% of Your Income
Would you be interested in freeing up 10% to 15% of your current income? Just imagine what you could do with this money. You could pay down your debts, increase your savings, or work toward that next important purchase that you have in mind.
10 Steps to Take if You Are a Victim of Identity Theft
There have been an estimated 9.9 million victims on America and over 40% of all consumer complaints in the U.
The Joys of Address Labels
Address labels are many things to many different people. If you are a huge fan of address labels, you aren't alone.
Identity Theft is a Major Problem: Whose Responsibility is It to Protect the Consumer?
We have heard a lot about consumers' personal information getting into the hands of identity thieves. More and more people are taking steps to minimize their exposure to such theft by reducing information on personal checks, refusing to share social security numbers with just anyone who asks, being prudent in their use of credit cards, and shredding "junk" mail that might allow another person to pose as them.
First Checking Account - When is it Time?
We all know that money doesn't grow on trees, but we all need it to survive. The use of cash will only go so far in life, as you can't send it through the mail.
Kundalini Lessons - Money
I've been going through and interesting growth period lately that I thought I'd share, as some of the lessons were pretty profound (at least for me).I've written before about my awakening and the joys and tribulations since, and I've also mentioned that it's an ongoing process which, as far as I can tell, doesn't really end til you shuffle off this mortal coil.
5 Ways to Absolutely Destroy Your Finances!
Ben Stein has a book called How to Ruin Your Finances. To be honest, I'm not sure an entire book is needed on the subject-there are some fairly quick and easy ways to accomplish the task.
Top 10 Ways Managing Your Money Is Just Like Riding a Bike
An avid cyclist and bike racing fan, I sit transfixed during the many hours of Tour de France coverage every July when the race rolls around. This year, during some of the less-than-scintillating early miles of the sprint stages, my mind wandered a bit, and it occurred to me that there are some interesting parallels between winning the Tour de France and winning at personal finance.
How To Get Ahead On A Low Income
Do you struggle from week to week trying to make ends meet? Are you consistently going without things that you really wish you could afford? Well I have some possible and practical solutions to your dilemma:1. TIPS TO HELP YOUR BUDGET STRETCH FURTHER.
How to Obtain a Non ChexSystems Bank Account Without Being Scammed
Predatory lending exists in the mortgage industry. It's typically when a mortgage broker add's on unnecessary fee's to a bad credit application, because he or she knows that the applicant is in a desperate situation.
Money Saving Tips. Maximize Savings on Everyday Items!
Frugal living is more than a lifestyle. It's a passion.
Budgeting Before Buying
With interest rates being at an all-time low, I can understand the urgency for people wanting to purchase a home. But I caution the first-time home buyer to learn how to budget their money before buying a new home.
Credit Card Debt - Watch Your Credit Report and Your Bill
Most consumers are aware of the importance of their credit report. This document, offered to consumers and lenders by the three major credit bureaus, offers a fairly complete list of financial transactions and debts incurred by a consumer.
Take Control and Master Your Kitchen
Those who keep a watchful eye on where their money is spent, have long conquered the kitchen woes. No last minute panic trips to the market.
A Fresh Start for Family Finances in 2005
While 40% to 50% of us make New Year's resolutions on January 1-a ritual that has existed since ancient times-approximately 60% to 80% of us have already broken them by the end of February, according to researchers.It's still not too late, however, to reset the trajectory on your family's finances, experts note.
Vesting and Your 401(k)
Do you have a 401(k) retirement account? Are you vested yet? Before you move on to your next job, it is critical for you to find out if you are fully vested in your retirement account before you make the move. If you are not, you could lose hundreds if not thousands of dollars in employer contributions.
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 on the problems of world debt, with the Live 8 concerts, the G8 summit in Scotland, the Make Poverty History Campaign (MPH) and the various anti-poverty marches, it seems that everyone wants the world's governments to behave more ethically towards the manner in which international finance is conducted. This is obviously a laudable attitude to take, and has gained immense momentum with such a groundswell of public opinion that even the UK Chancellor, Gordon Brown, has stated he is planning to participate in the Make Poverty History demonstration in Edinburgh during the G8 summit.
The Changing Shape of Family Finances
Super-mumsIt seems that the proof of maternal efforts is no longer found in the pudding ? it's in the spending. Women are increasingly outsourcing personal grooming tasks and the pressure of looking good, feeling healthy, maintaining a tight ship and IQ level has meant that housecleaning and gardening are again fashionable methods to promote the family brand; housewifery is now a career, with all the attitude of 21st century post-feminism.
Affording a Home
Can you really afford a house? If so, how much house can you afford? To determine this answer will take serious financial planning, and the best time to start is at least six months before buying the home.Although buying a new home may seem like an American Dream or romantic venture, the reality is that the house you can afford depends on your current income and debt obligations.
How to Choose Wisely a Credit Card
So, you've made the decision to apply for a credit card. It's an important step for any consumer.