If living the frugal life is getting you down. Think of some ways that you can splurge within reason. Learn to cook one of your favorite meals. The ingredients will cost more than a regular meal but if you prepare it yourself at home you will spend less than if you were splurging on a fine meal in a restaurant.

Another way to do this would be to maybe treat yourself to one special item at the grocery store once a month and make a night of it.

Food not your thing… then buy (or rent a dvd), make some popcorn and enjoy yourself. Saving money is a way of life but you should not let saving money rule your life. Money is a tool. Many people forget that and just like when you go to the hardware store you may see some tools that cost more money or require more use to get the best results. Just because you have a little money doesn’t mean that you can not enjoy nice things once in a while.

If you are a crafter and want to buy a special sewing machine, drill or whatever… then plan for it. If you use the item often enough and you buy a quality item then you will not have to worry about replacing the item in a few months because you bought a cheaper or less well crafted item.

All things in moderation… that includes spending. A splurge can be included in your spending plan, if you do not work so close to your earning threshold. Conversely, saving all of your money or investing all of your money is just as bad because then you do not have anything to live on.

A former co-worker of my mother’s invested a lot of her take home salary in the stock market each month and kept moving things and trading them, so much so that she had nothing to live on. Investing and saving is admirable but it is also important to be able to give your investments time to grow. Adding to your investments regularly helps but not selling and trading at the drop of a hat.

You will not get rich quick by living a frugal lifestyle. But living a frugal lifestyle will allow you to try and correct some past financial mistakes by paying off creditors or allowing you to save for a larger purchase so you won’t have to go into debt. Just like a diet or new eating plan… if you only save all the time then you will become resentful of money. When you splurge occasionally then you will appreciate your efforts in moderation.

When you earn more money after getting a raise or by moonlighting or a side job, you make plans for the extra cash. Many of us often tell ourselves the lie that when I get more money “I will get out of debt”or “I will save more.”

Yeah right.

Saving more doesn’t happen because if you are making considerably more, there may be obligations that go with the job, so you may spend more You may need to buy certain clothes or work related supplies. Then of course you want to fit in with your co-workers by going to lunch with them or socializing with them.

What can you do? If you are making the change to a dramatically higher salary you may be star struck by the numbers. If you are making a small jump in salary based on years of service or education then the salary amount will not be that great a deal even though it isi more. Even if you earn an additional 10% raise, with the cost of inflation, transportation and other necessities, the raise that you get may only keep you on pace with inflation in your area.

Why do we think that once we get a raise or make a certain amount that we will be so much better off? Because we haven’t really looked at the relationship we have with money.

When that new raise comes, the first thing you need to look at is how much more you could add to your pre-tax savings, an additional payment to decrease your debt or accelerate your car or mortgage payment. Of course you may want to add to something to a non retirement savings account.

The point is… when you get a raise or find a job with a higher salary do not throw caution to the wind. Before you first new payday comes, realistically and seriously think about how you are going to send the additional money you have. Rethink what you need to comfortably need to live on and go from there.

If you just added $25 each pay period to any outstanding bad debt (credit card) or $25 or more to your retirement investment you would see a big difference upon retirement. Then with the rest of the money you earn… use that for your fun money. Take a vacation, go to the theater, buy hobby supplies.

 t go into debt when you spend.

Save first, then spend but don’

You may know what your favorite credit card is or know the numbers by heart. Not a problem, the big question is: do you really know how much you take home every month? Really, honestly? How much do you take home? Of course if you have figured out your annual gross salary or your weekly or your biweekly salary. Then there are taxes and other deductions. So how much are you really taking home?

Let’s say you make $50,000 a year. Your gross earnings would be roughly $1923 based on 26 pay periods a year.. GROSS, not net. Ouch! Then there are the deductions: federal and state taxes, social security and a percentage of health insurance. These may total about 28% of your income in total. If you wanted to be proactive and save money in an employer’s 401(k) program then you have even less to take home. Although the 401(K) will benefit you in the future, it is still less money you take home. Fortunately, though you are not taxed on certain contributions that are made directly from your check. A $200 401(k) contribution really only costs you a percentage of the $200 because your taxable income is reduced by the contribution you make.

 BUT… that doesn’t help you now. After the deductions that you have your $1923 gross may suddenly look more like $1425 or less. That’s not so bad is it? So $1425 twice a month is still nothing to sneeze at $2850 can be manageable.

Where did my $50000 go? Fifty thousand dollars gross spends differently than fifty thousand dollars net. A net income of $50000 would be more like a gross income of $75000 or more. No matter how much you make in order to be able to have some left over means that you cannot spend all of your money.

Sounds simple… if you made $300 a day net and spent $325 you can see that you are spending more than you are earning. Could you live off of sixty percent of it – $180? Would you save 20% = $60? What about the other twenty percent … $60? You could become a philanthropist, tithe, give to a political campaign or open small college funds for all the children you know. Determine what you earn then you can figure out what you spend and what your needs really are.

 Do it… figure out how much money you actually take home monthly, or biweekly or weekly. Then figure out how much of that money has to pay for the necessities in life. The money that you have left over is what you have to spend for the fun stuff. There may not be as much money for the fun stuff when you do the math. That’s when you see that there is a great disparity between your gross and your net earnings. Have you included any money for your future?

Get a paper bag because it may make you hyperventilate once you see that you aren’t bringing home as much as you thought you were. You can still enjoy things in life, it may mean saving for a big ticket item instead of charging it. Take a serious look at your income before you let any more go.