How to Budget and Save Money: The Right Way - LifetimeWords

How to Budget and Save Money: The Right Way

| Posted in Personal Finance

Real Help for Real People - Front Page2

Welcome.  The link to our free spreadsheet is at the bottom of the page. It includes all instructions and examples. Please read this page thoroughly. It is critical to fully understand our method and mindset, to get the most out of your experience. There are no gimmicks or strings attached, just real help from real people, based on 30+ years of actual experience with this plan.

How to Think the Right Way About Personal Budgeting:

Some of the most frequently asked personal finance questions during this difficult economy revolve around "how to save money", "how to make a budget" and "how to live on a budget". Budgeting your money successfully is crucial to flourishing in any type of economy, much less a tough one.

There is a common misconception that good budgeting depends upon fancy forms, financial expertise, expensive software programs and/or solely on one's income. All of these false notions completely circumvent the only true goal of any personal budget: Getting the utmost value for each of your hard-earned dollars.

Those misguided beliefs above are the key reasons why many people are much worse off than they should be, regardless of income levels or familiarity with financial software. There are many people who are much "better off" with a lower income, a simple budget form and the right path, than those with greater salaries and top-notch computer programs.

These successful folks are the ones who have learned the secret: Keenly stretch your dollars WITHOUT sacrificing quality or "good living". This is the foundation for our budgeting method and it is the best method. It is the most effective method because it combines the three critical budgeting elements:

How to Budget graph

> Easy, accurate record-keeping

> Cost-slashing, WITHOUT SACRIFICE (the key component to getting ahead)

> Timing your cash outlays for maximum effectiveness

The net result: Much more money in your pocket without earning an additional dime or sacrificing a single thing.

We have been successfully managing a household budget for 30+ years and have survived many unforeseen "bumps and bruises" along the way. During that time, we paid off our mortgage early, put two children through college, paid for two weddings, managed to save a good deal of money and maintained a nice standard of living.

There were no magic tricks involved, just common sense, a few simple forms that we developed many years ago and a little effort. We have read countless "How to Budget" books and articles over the years and while a select few were beneficial, the majority we simply dismissed out of hand.

Unfortunately, too many budget or personal finance "experts" approach cost-cutting from the standpoint of scaling back on items and niceties as a first choice, as opposed to a last resort, as it should be. One author for a popular financial web site even suggested eating a sandwich or a snack before going out to dinner because you would be less hungry and therefore save some dollars.

Taking this "logic" just a step further, why not just stay home and save even more? It is this type of lazy journalism and advice that keeps people meandering on the path to mediocrity. We had a good chuckle and moved on.

There is a Better Way...

How to Budget - A Better Way

The Dining Out Example:

The basic idea behind going out to dinner is to escape your stresses for a bit, have fun, relax, enjoy a change of scenery and forget about cooking and doing dishes for the evening. If you are going into it overly concerned about the financial aspect, you are nullifying all of the good intent. A self-defeating exercise, from the start.

Our approach for "cutting back" on dining out expenses is quite the opposite: Cut only the bill, not the quality or quantity of dinner items. How so? By using, (See our Review) anyone can save 60% every day and 80% with their Specials. A no-brainer.

Bonus Tip: Combine with a free account (See our Review) and you get additional cash back on purchases from 

This is a much more effective approach and no one needs to worry about filling up on pretzels on the way to the restaurant.

While seemingly well-intentioned, it is this narrow-minded, defeatist assertion of the author and many like-minded peers that we reject. Cutting back on products, services and enjoyment to save money is not getting ahead, it is trading off. And trading off is not the path to better living. We fully support frugality, with the added feature that you can be frugal AND attain a higher standard of living,  simultaneously.

Certainly you shouldn't waste money on items which return little value but nor should you unnecessarily deprive yourself of the fruits of your labor. Break away from the antiquated "You can't have your cake and eat it too" crowd. A cake has only one purpose and the trick is to find the cheapest high-quality "baker".

It is this simple dining out example upon which our entire budgeting principle is based:

Why spend more for something when it is not necessary?

We take it to an extreme, however, and raise the question to:

Why spend MUCH more for something when it is not necessary?

Knowledge is power. Thus, we show pathways to similar savings in many areas of consumer spending (See our How to Save Money Cheat Sheet).  Some of these sites will even give you cash-back for doing exactly what you are doing now.. buying things that you need and want... WHERE you want.

Much like visiting the local market and discovering that Joe is selling a bag of apples for 10 dollars while John is selling an identical bag for 3 dollars, the choice is simple. These "supplier-replacement" and "supplier-rebate" cost-cutting techniques, combined with our simple forms, is the backbone of our budget plan. It works.

Furthermore, in many cases, the "3 dollar apples" highlighted are of higher quality than those in the "10 dollar bag". This is the underlying secret to truly getting ahead.  This is our practiced philosophy and is reflected throughout our site.

Our mindset on How to Budget and Save Money is clear:

1) Slash costs for the same items
2) Pocket the difference
3) Keep simple, accurate records

The old adage is true: "A penny saved is a penny earned". The real goal, though, is to multiply the benefits of that adage over time into "thousands of dollars saved are thousands of dollars earned", while not skimping or cutting out life's enjoyments.

This is the key to increasing your standard of living, net worth and happiness.

Download links:

Note: The spreadsheet files do not contain any macros, they are completely safe to use. If you see the following message at the top, it is ok to click the Enable Editing button to enter and save your data.

How to Budget - enable editing

Download: How to Budget and Save Money.xlsx (Microsoft Excel current version)
(See our Interactive Online version to preview.)

Download: How to Budget and Save Money.xls  (Microsoft Excel 97-2003 versions)

Bonus Download: Loan Amortization Schedule.xlsx (Microsoft Excel current version)
(Use our Interactive Online version)

Bonus Download: Loan Amortization Schedule.xls (Microsoft Excel 97-2003 versions)

Note: If you do not have access to Microsoft Excel or wish to automate and speed up the "bookkeeping" part of our plan, see our Full Review of Quicken. This is an inexpensive, powerful program with many great features.