Eating out is a major convenience cost. (Photo Credit: CC BY/Christian Cable/Flickr)

Instant gratification may feel good, but the truth is that the cost of convenience is killing budgets everywhere. Whether it’s a matter of “keeping up with the Joneses” or partaking in smaller daily indulgences, impulse spending can challenge the best budgets, particularly during a recession. With a little help from Wise Bread, here are five smart spending tips that will help you tame the runaway cost of convenience.

Cut back on cleaning services

If you have the means to support small cleaning businesses in your community, then by all means keep the wheels of the economy spinning. However, maid services are definitely a luxury for most people. Do it yourself and save. You’ll even get some exercise in the process.

Cut back the cell phone bill

Mobile devices are ubiquitous these days, but for most people who don’t rely upon them for business, they are yet another cost of convenience. Land lines are cheaper, and cheap VOIP telephone services are available for people with a computer and broadband connection.

Cut back television

Thousands of channels and still nothing to watch tends to classify cable and satellite programming for many people. Not only do TV addicts think they need the variety, but some will have multiple televisions within the same household, so ingrained is the passive habit. Read a book. Use the radio or Internet for news. Go outside and exercise. These options are cheaper than television and better for you.

Cut back on your ride

Having reliable transportation is necessary for school, work and other obligations, and in well-designed cities, public transportation serves the public need. However, most U.S. cities do not have adequate public transportation systems, so having a car is helpful. For those who need a car, buy based upon need, rather than signing up for all the bells and whistles. Paying for more car than you need is a prime example of the great cost of convenience. Try riding a bicycle instead.

Cut back on eating out

Cooking is an essential life skill that many Americans, unfortunately, never learn. Simple meals are not difficult, and as MSN Moneycentral reports, U.S. families with children tend to spend $300 per month or more eating out each month. With some planning, eating out can be cut to a minimum and save recession-starved families a few thousand dollars per year.

Sources

MSN Moneycentral

Wise Bread

Everyone is in search of emergency money. No one wants to get caught with a sudden hospital, automobile or appliance bill and have no way to pay for the expense. In today’s precarious financial climate, it’s crucial for everyone to find a way to bulk up their emergency funds. The best way to find extra money is to budget. It’s a great way to see where a consumer stands financially and see what he or she has to do to improve their situation. Budgets are useful tools that can be created with intricate software or a simple notebook.

Despite the necessity of a budget

Despite their importance, there are still some consumers making mistakes with them. Here are the top mistakes people make with their budgets.

1.) No budget. There is still a fraction of the population that doesn’t budget at all. Keeping track of monthly income and expenses can give a consumer a clear picture of how well, or not so well, money is working for them. For example, if a budget shows that a consumer is spending hundreds on clothing and dining in a month, that’s not a good use of cash. It would be better to scale back and fuel that money into either savings or investments.

2.) Lack of math skill. Too many people fall back on a lack of math skill as their reason to not have a budget. In today’s technological age, though, there is no reason to not have a budget. Software, from Microsoft’s Money to Quicken to lesser-known brands, can do the work of organizing a budget. All the user has to do is input their spending and income. The software does the rest. For those who want a very basic budget, a notebook and pen can do the trick, too. The only skill needed is consistency.

3.) Job security. There is also a growing number of consumers who believe that if their job is secure, they can count on money coming in and don’t need to budget. Whether a consumer is working for a huge corporation or a mom-and-pop business, they are at risk. The economy is very unstable and has been for over 12 months now. Though the recession is over, having a good emergency money fund was crucial to the survival of many Americans who were laid off unexpectedly. Employers are still holding back when it comes to raises, hiring and offering benefits and no one knows how long it will take for them to return to old ways of operating.

4.) Unemployment benefits are there. The reality of government-sponsored unemployment is that it is not completely reliable. If an employee leaves their job or gets fired, unemployment most likely won’t be approved. Plus, with the recession bringing the unemployment rate up to well-over 10%, the number of benefits going out is quickly draining the government-sponsored benefit plan.

5.) Not my job. No one anticipates tragedy like losing a job or an unmanageable emergency expense, but they do happen. The only way to mitigate them is to be prepared the best way possible, and that includes having a good working budget that is up to date. It also should be working for a consumer’s specific financial situation.

A difficult look at finances

In the end, a budget can save consumers from financial disaster. For anyone looking to bulk up their emergency money fund, it’s crucial to look at revenue and expenses and then make wise decisions based on the financial position. Much of saving can be done automatically due to banks setting up auto-transfers and shouldn’t be a task to remember. It may seem difficult to look at finances with a fine-toothed comb, but it is critical if liquid assets are to be built.

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The one thing you need to do in order to prepare for investing, besides applying for a short term loan, is to get completely clear on your financial goals. This will help to determine how much you need to invest, as well as how aggressive you want to get with your investing strategy. For example, if you are close to retirement and you haven’t started investing yet, then you will need to go with safe investments that will provide a secure income for when your main source of income becomes greatly reduced. However, if you are young and are just starting out, you have more time to recover from a bad investment here and there.

Before you start

Before you start investing however, you need to first determine when you will need this extra income. If you are close to retirement, then this will be within the next few years. Next, you need to determine how much you want to earn from your investing activities. If you are only looking for modest gains in the long term, then look for slow growth funds that will help you achieve that. But if you want aggressive gains in the short term, you will need to look for the more volatile stocks. While these are often risky and you could lose everything you put into them, they also can pay off very well, with the potential of making you very wealthy.

How do Payday Loans Help?

Once you have determined your financial goals, you will need to make sure that you have the financial resources to get started. That’s where payday and short term loans come in. But don’t misunderstand me—I am not, by any means, telling you to misuse these or get yourself in debt way over your head…because that will not help you achieve your long term financial goals. I am, however, telling you that if you do not have the resources to get started, applying for a short term payday loan could help you make the initial investment needed to begin your investing activities.

Be Responsible!

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I must caution you though—if you do this more than once or twice, you could get yourself into trouble by digging yourself into a hole. Meaning, if you take out a payday loan, and then when payday comes, you use that check to pay off your loan…then you take out another loan to cover your living expenses…and so on and so on it goes until you are buried so deep in debt that you can never recover. The responsible way to do this is to take out only that amount that you can comfortably live without from your next paycheck, so that you are not digging yourself into a hole.

Credit Cards?

Will credit cards work? That depends on the fees you have on your credit card versus the fees you end up paying for your payday loan. Determine the difference, and go with the method that will give you a lower rate. However, many people tend to have tarnished credit, so a credit card may not always be an option. Either way—you need to determine what will work for you, so that you can take charge of your financial future!

Racking up payday loan after payday loan should tell you something about your budget—it’s stretched to an over-capacity and that you are spending your money on things or services you can probably live without. Couple an over-stretched budget with an under-capacity imagination, and you have what you have—a lot of stress over something you can probably do something about. Why the imagination? Because, if all you can see are bills, upon bills, upon more bills, then you are not using your imagination to its full capacity for finding creative ways to remedy your situation.

First, you more than likely have some budget busters that are destroying your peace of mind. These are the “gotta have it” items, that in retrospect, you didn’t need. Items such as a bigger house (with the bigger mortgage payment), a brand spanking new car (with the big payment spanking you), and all the electronic gizmos and gadgets that you don’t need. How to get out of the trap? Stay tuned…

Budget Saver #1—Food Expenses

Probably the biggest drain on anyone’s finances is the expenses related to food, especially when you have at least one teenager in the house (Girls or guys—they both eat a lot!) There are some ways to cut down on how much you spend on food without sacrificing the good stuff or even changing what you eat. In fact, the only thing you really need to change is how you prepare your food.

What do I mean by that? Well, have you ever bought the convenience foods in the store? Stuff like pancake mixes, flavored syrups, premade breakfasts…things like that. Have you ever noticed how much they cost per serving? No? Well, let me give you an example: Say you buy pancake mix on a regular basis for $2.35 per box. Now say that you use at least half a box per batch, which comes out to $1.18 per batch. That isn’t bad, but what if I tell you that I use a pancake mix that comes out to maybe $.50 per batch? Would you be interested? The only thing I do differently is that I make my own pancake mix from scratch and I store them in zipper-type bags. Then I label them, and store them in the cupboard until I need them.

Also, when you make your convenience foods from scratch, you know what goes in there, and you can therefore control the ingredients your family consumes. This makes your mixes healthier and cheaper in the long run. Another thing that you may want to change is to buy generic brands over brand name foods. There isn’t much difference in taste, and all you are paying for is the advertising and label, which may require a payday loan to afford. Save a few bucks here and there by getting generic food. You’ll end up saving enough money to start a savings account!

Budget Saver #2—Utilities

This is the next biggest drain on your budget. But if you make the appropriate changes, such as better insulation and energy saving appliances, you will be able to slash your monthly bills and add to your savings account. Another thing—in the winter, if your windows are losing a lot of heat, putting up plastic on your windows will help to reduce your heating costs by at least one-third. Space heaters work wonders as well.

Budget Saver #3—Auto

Auto insurance, maintenance and gas—not to mention car payments—really take a toll on your budget. The best thing to do, first of all, is to shop around for cheaper auto insurance. Then, when you do find a cheaper company, only get the liability coverage. Of course, if you do not own your car outright yet, you will need to get the comprehensive, unfortunately. However, if you shop around, you can find the cheaper premiums.

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There are also ways to cut down on your car maintenance costs. Commercials today are popping up where you can pay a certain amount each month, and they will pay for any and all maintenance costs. Might be something worth checking into. Gas…the most fickle price of them all when it comes to your auto costs. If you have to commute a long distance to get to work, there are things you can do to cut down on these costs. Car pooling, move closer, or try getting your boss to agree to let you work from home. All of these ideas can help you slash the amount of money you paying for gas each month. Besides, getting a payday loan just to buy gas to get to work may not be such a great plan.

Best Budget Saver Tip!

The best budget saver tip I can give you is that you DO NOT have to have the latest gadget or fashion to hit the market right now. You also do not need to live in the newest or flashiest house, or drive the newest model of vehicle. Take my advice—wait until you can reasonably afford it…