Is this really a good idea?

Living for today is always a good thing. If we cannot live for the time that we are actually living and instead live in another moment, whether it is the future or the past, then we are not truly living. However, only living for the present moment is not a good thing either. It has been stated (I forget where) that most people truly do not think beyond two or three days in the future. And this is also why people don’t truly make long term goals, for the most part. And perhaps it’s also why budget planning is not a big part of what we learn growing up.

It is important that we learn to handle our money. If we spent everything as we got it, truly only living for the moment, then there would never be anything available for the longer term expenses, even including housing, insurance, and groceries. Never mind what such a thing would do to emergency planning and retirement. While 75% of Americans surveyed stated that they have saved for retirement, only 13% are very confident that they will actually have enough to retire comfortably. And only 44% have actually done any kind of retirement needs calculation.

Perhaps it’s a good idea to actually make some plans for the future. Without planning and knowing how one is going to handle crisis, retirement, and upcoming large expenses, then there is no way that one can know exactly how much is required for these expenses. Sitting down and doing some kind of estimate, even a rough one, would make planning a lot easier. Realistic returns need to be taken into account on all savings, as well. This can give a sense of hope and security. And it might surprise people how little they actually need to retire. I’ve figured mine out. And in today’s dollars, assuming that I have no consumer debt, and that my kids are grown up, I can survive on less than $500,000 dollars in savings. In fact, that may even be high, especially if my taxes are low, or if I decide that I want to work part time. Actually, I know that I will do some income producing activity. It’s just the way I am and I will do it to keep myself occupied and happy, doing writing, consulting, teaching, or artwork of some form.

Planning for the future also allows one to live a better life today. With solid future plans, written goals and knowing how to accomplish them, one then has more security in the present. It’s easier to plan for the day when one knows exactly how much money is available for the present, allowing for all other plans. This makes living for today all that much better!

• To keep a medium sized, mixed breed, spayed female dog the yearly cost will be approximately $1,196.00 per year (this does not include emergency medical care, initial vaccinations, obedience classes, the cost of fencing, or bed).
• To keep a spayed female, domestic long haired cat, the yearly costs will be approximately $899.00 (This does not include emergency medical care, initial vaccinations, the cost of an outdoor cat run or bed).
• To keep a domestic rabbit the yearly cost will be approximately $449.00 per year
• To keep a domestic guinea pig the yearly cost will be approximately $420.00
• To keep a domestic hamster/rat/gerbil the yearly cost will be approximately $225.00

None of these include one time costs for things such as vaccinations, collars, cages, feeding bowls, care products (brushes, clippers, etc). And of course any medical costs are not included, as they vary depending on the health of the animal.

A lot of people do not really think about the ongoing costs of a pet. And if you have a pet that does such things as destroy your property by chewing or messing in the house, then these costs only escalate. Also consider the impact that a pet will have on your lifestyle. Pets take care. They do require a lot of time and energy, and while that might be very worth it to some people, not everyone realizes the true commitment it takes in terms of personal time and effort.

If you decide to have a pet, also consider the long term health care costs. If your pet is a larger animal, such as a dog or cat, then the veterinary bills as the animal gets older can be considerable. Put this into your budget! There is pet health insurance available, which in many cases is a good idea (I used to have it for my dog). You could also self insure through a savings plan, such as putting $25 or $50 a month aside into your savings account and have it allocated to pet costs for the future vet bills.

Always plan your budget thoroughly, and remember each cost that you have!

What it is, is the person doing the budget each month is working on a cash only budget (no credit cards), and is not permitted to use the debit card from the bank. This is done purely to learn budgeting and is an exercise that may or may not be followed long term. At the beginning of each period, which is usually a pay period (when pay cheques are given), all the income is taken and put into different envelopes. Each envelope is labeled according to what the money is for, such as rent, groceries, cable, transportation, etc. Due dates of bills are also written on the envelopes.

The person managing the budget must be aware of how much is in each envelope and track the contents properly. Each envelope is then used only for what it is labeled to be used for. Of course, using these in conjunction with a calendar is a good idea, that way bills aren’t missed. And most bills are then paid either at the counter of the billing company or in person at the bank. It’s kind of a basic system for those who have never managed to understand budgeting or used for people who need a system that has restraint built right into it.

Keep in mind that this system does not allow you to use any credit cards whatsoever! You are restricted to the cash in each envelope. I kind of thing this is a good idea for those learning, and I will definitely use it for my kids when they are old enough to understand. What do you think?

Here’s a nifty little idea that a friend e-mailed me (thanks, Helen her blog is DeeplyFelt). She says that buying prepaid grocery cards really helps with her budget, because the budget is then all in the card. Plus it prevents her from browsing all the aisles in the different grocery stores. This way her family only uses the one store, which helps them to better manage what they are buying by really sticking hard to their list and not diverging from what they have already decided is their budget.

As far as I’m aware every grocery store offers prepaid cards. You can simply buy these at the check out or at the customer service desk. And by purchasing prepaid grocery cards you are also insuring that you won’t spend your grocery money on something else, because you have to spend that card at the grocery store. It’s not good for anything else!

This concept could also work for gas cards. I know I’ve done that. I’ve even used the points from my the gas station’s special little card to purchase these prepaid cards, as well as discount cards. And many grocery stores have similar points programs. It’s kind of like a double bonus, because you use the points to buy the card, then the purchase from the prepaid card also earns you points.

Has anyone else ever tried these strategies? Or something similar?