When I was teaching on the high school level I used to tell my students, "If you fail to plan ahead you are planning to fail." The same is true once we move on to endeavors beyond academic training, but the cost is much higher if we do not plan. There have been many times along the way that we have found ourselves in a financial quandary simply because of a lack of planning. So, you ask, how do you start? With first things first!

1. Decide your priorities.

We started our planning with non-negotiables. This is the part of your budget where items must be paid for like: mortgage, food, electricity, etc. We do "bottom line" budgeting at our house. When the category is out of money, the spending either stops or money is shifted from a discretionary account to cover it. That means if we have a very cold winter and our heating costs exceed the amount of money we set aside to cover it, we have to cut something like long distance phone calls. For the first six months on your new budget, do a monthly reevaluation, and after that, reevaluate once every six months. This helps you catch areas where you spend money, but you did not account for it in the budget (for us that would be stamps).

The next section of our budget would be negotiables (or discretionary spending). Be willing to honestly define if an area is really a negotiable. Sometimes the area may be negotiable one month, but NON the next (ie. eating out). This helps you keep a balance if you are saving up for something special or have unexpected medical costs. Also, shop around -- especially with things like long-distance phone call plans.

Last, but certainly not least, we have savings--both short and long term. Short-term savings may including things like: emergencies, field trips, dinner out, new book, ice cream on a Sunday night, bills due next month, or a birthday gift to purchase. Long-term savings could be something like: three month's income in case of job loss or catastrophic health need, vacation, retirement, annual bills (such as taxes, insurance, car registration, etc.), new furniture, or household improvements.

2. We have found it crucial to have one person in "charge" of the checkbook and bill paying.

This can be a sensitive area in a family and it is really important to talk this one out. One person in charge of paying bills and handling the check book decreases the possibility of over-spending or writing a check on insufficient funds. Decide which spouse is best organized or (as is the case in our family) which can best handle the stress of a tight budget. Meet monthly to talk about what is going on with the family finances. Just because one person takes the ultimate responsibility does not mean both should not participate in the process.

3. Saving money in the kitchen

I have found menu planning to be a great time and money saver.

When you do your grocery shopping, there are a few things you should know to help you save money. Loss leaders and sales can become best friends with your budget. It took me a while to learn how to do this. Because I planned menus long-term, I often felt like I couldn't shop weekly sales specials. I have learned to reserve some grocery funds for really great sales. The whole purpse of "loss leaders" is to lure people into the store so they will purchase other things that may not be so cheap. That doesn't mean, however, that you have to succumb to the temptation to buy those other, more expensive things! When purchase quantities are limited, try to arrange it so one of you can go by the store a few times during the course of the week. For instance, in April, apples were only $1.28 for a five pound bag. That is a substantial savings (in our area) considering how many apples we eat--plus they stay fresh pretty well if you keep them in the fridge.

Coupons are another way to save money in the grocery store. It is really possible to save with coupons IF you check to be sure the brand-name product is really cheaper once the coupon is deducted than the store brand is to begin with. Try to watch for special double-coupons, double bonus coupons, or triple coupons and try to purchase things for which you have a coupon that are also on sale.

4. Saving money on household necessities

You can save money on cleaning supplies if you make your own and buy in bulk. Personal categories (shampoo, deoderant, toothpaste, toilet paper, etc.), however, are a little more difficult to work with. Deoderant, for instance, is not something most people can or want to make. So, in those areas, the best way to save money is consider the brand you purchase and try to buy things on sale. I have found that "off" brands like Suave work just as well as more expensive "name" brands, and they bring quite a savings. Try to keep track of the place that has the best price on those things and buy them there. Evaluate if a "must need" item is really that. For instance, can you use cloth napkins or just wash dishes instead of using paper plates? We save paper plates for Wednesday nights in our house because we have to leave early that night to get Bradley to AWANA. The time savings is worth more than the money we'd save. I think we started saving money the best when we learned to ask ourselves the hard questions. There are places where I sacrifice time for money and vice versa. At least I know that is a choice I am making.

5. Saving money on family needs

Clothing and shoes is a big drain in the budget for many families. These are the best ways to save money on clothing and shoes: trade with friends and family, buy second-hand, shop sales at discount stores, or make your own (clothes that is! I don't know too many people who can make shoes!).

Haircuts do not have to be an expensive part of your budget. In our family, the fact that I do all the haircuts (except my own) saves us, on average, $25 per month. You can learn how to cut hair more easily than you think. (Big Tip!! Keep styles simple) There are videos that can be purchased (better yet, see if your library has a book or video for you to use for free!) with simple hair-cutting kits at stores like Wal-Mart. The savings will more than pay for the video and kit if you have to purchase one. You could also barter with a person who operates a beauty shop out of his/her home or go to a beauty college for haircuts. If your children have simple styles, they cannot be easily harmed by someone who is less experienced. Most beauty schools have an instructor that supervises and checks every haircut too. This might be a good way for you to learn how too!

Sample Budget Categories: Tithe, Mortgage, Food, Spending, Entertainment, Electric, Gas, Trash, Car Payment, Car Gas, Car Maintenance, Phone Local, Phone Long Distance, Clothing, Household, Life Insrance, Car Insurance, Medical, Credit Cards, Medical Debt, Education, Savings (long and short-term)

Things I don't buy that save me money:
1. Cleaning rags. Cut up old towels and zig zag around them on your sewing machine.
2. Paper towels. Very Expensive when compared to reuseable resource like cleaning rags.
3. Soft drinks, Kool-aide or other drink mixes. They have no nutritional value and are expensive. We save them for rare treats when we have company (but even then when company asks what to bring I often tell them to bring soda that they like so I don't buy too many kinds and have it be wasted). Drink water! It is really good for you and your kids.
4. Pre-packaged foods like Hamburger Helper or Lipton Soup Noodles. It is way less expensive to buy bulk noodles and put in my own herbs.
5. Pre-packaged cookies or cookie mixes. I think Ihave bought a package of oreos once within the last year.
6. Name brand soups.
7. Name brand saltines or graham crackers.
8. Chips are a treat in our house, and I only buy one bag for the month (usually pretzels or tortilla chips as they are the most nutritive and less expensive).
9. Trash bags for small wastebaskets. Use plastic bags from the grocery store--they are free!

Other tips:
1. Buy heavy duty aluminum foil. It is easy to wash and reuse because it is more sturdy. I have found that for the price increase it is worth it because one box can easily last me six months or more.
2. Rinse and reuse zip-loc type bags unless you had meat stored in them.
3. Dilute fruit juice half and half even when your children pass the toddler years. That way they can have two cups and still stay in the 8 oz. per day recommendation by the AAP, but feel like they are getting "more." Kids only know what they have experienced.
4. If you are not one to bake bread, buy your bread at a bakery outlet. You can often get two or three loaves for a dollar that way, and you can't tell the difference (I find storing the bread in the fridge reduces the risk of it molding more quickly).
5. Do not go grocery shopping when you are hungry. You will make more impulse buys.
6. Keep a list of basic supplies and items that you buy and what you usually pay for them. That way if something is on sale, you have a reference point.
7. Try substituting one meat meal per week with a bean recipe.
8. Have a sturdy baggie or plastic container in your freezer for the purpose of storing small amounts of leftovers (ex. one spoonful of corn or meat). When container is full, add water and bullion cubes with herbs to make a hearty soup or stew.
9. If you use dryer sheets, buy a brand that still works well with two or three uses. I find that the Wal-Mart brand is very reliable for this. OR simply cut the dryer sheets in half when you buy a box--works great! (thanks for the tip, Karen!)
10. Experiement to find the least amount of laundry detergent you can use and still get the load clean. I started out with using half the recommended amount, but discovered that 1/3 the recommended amount still works well (probably depends on which brand you buy--I use Tide with bleach alternative). Use either detergent or pre-wash stain treatment on stubborn spots.
11. Check out videos from the library instead of renting them from a video store.
12. Make your own baby food, and don't buy prepacked baby juices (just dilute regular juice).
13. If you have a baby or are planning on having one--breastfeed! It can save you as much as $1200 over the course of one year.
14. Cut the front off Christmas cards and turn them into post cards. Your children can write thank you notes for Christmas gifts they received this way. Postage is less too!
15. If you really like a particular magazine, and going to the library to read it is too difficult, then consider asking a friend to share a subscription with you. Better yet, get two or three friends to share the price!
16. Find out which stores in your area honor competitor's sale ads. That way, you can take the sale ads with you and shop at one store. This saves a lot of time!
17. Do an internet search on the word freebies and you will be surprised at some of the offers out there. Only do this if you have a few hours to do some net surfing.