You Need a Budget has put together a contest for moms who budget. I am a mom, and I do budget (loosely), but I’m really not that into running a “tight ship”, as the contest states. But you might do well in this contest. All you have to do is share your creative budgeting techniques, and you could win. Some of the prizes being offered include:

• A trip to the spa at the Four Seasons in Dallas.
• Personal finance gift package.
• YNAB gift packages.

The contest started yesterday, and you have until August 3, 2009, to fill out the entry. you get extra entries for social media (Twitter, YouTube, Facebook, etc.). The grand prize (Four Seasons) is awarded after voting from America. If you are a man with a female partner, have her sign up (or do it in her name).

My creative budget technique? I enter credit card transactions in my check register. That way, when I don’t spend more than I have. When the statement comes, I write the check for the entire amount, knowing the money is there. I don’t pay interest on my credit card, and I get the reward points.

Yes, things are looking serious.

No, the bailout plan isn’t some magic cure-all.

This is stuff we’ve seen coming for weeks now.

So now is not the time to start panicking.

Nor is it time to give in to fear-mongering. (I’m talking to you, CNN! Compare these two photos — thanks markzero — and see that far from being in a panic, the guy is just talking into his microphone: CNN cropped photo vs. Yahoo! full photo.)

Take a look at your investment portfolio and at your personal finances. Do what you can to get things in order.

Investment portfolio

Look at your allocation. Is it weighted somewhat conservative? Do you have a good mix? Index funds? Companies that are likely to survive? Try to avoid looking at your retirement account statement, and remind yourself that over the long haul, the stock market gains. Consider unloading only the especially vulnerable investments. If something still has solid fundamentals, stick with it.

Also, consider cash investments right now. You won’t get big returns, but many of them are guaranteed, including a recent guaranty for money market funds and also an increase in protection for FDIC-insured accounts. They can present a reasonable way to get some return for those who have a lower risk tolerance and are especially concerned about riskier investments.

Personal finances

It’s back to basics here:

• Try to reduce your debt as much as possible.
• Redo your budget and cut out the non-essentials to ensure that you spend less than you earn.
• Look for true bargains.
• Try to find ways to earn a little more money to pad the emergency fund.

Chances are, you are not going to see an immediate impact from this. But down the road, things could get a little rough. With proper preparation now (even better if you’ve been preparing for a few weeks or months  now), you should be able to weather things fairly well.

What are you doing to prepare for the future?
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

One of the things I have noticed over the years is how much more money I spend during the summer than at any other time of the year. Controlling summer spending is something that is hard to do, since there are so many things available to spend money on. Consider:

• Increased electric bill as the air conditioning is turned on.
• Family events and reunions lead to increased travel.
• Summer vacations.
• Activities for children who are out of school (day camp and the like).
• Eating out as the summer schedule messes up meal planning.
• Home improvement and yard projects.

There are some things that are a little cheaper. Fresh produce means less money spent on food, and the fact that our garden starts to yield its bounty is also helpful. But that savings doesn’t do much to offset the costs of summer spending.

One thing we have done is use personal finance software to take a look at our overall spending throughout the previous year. Then we average it out to a monthly amount. We set aside, in a high yield savings account, the “extra” money from our overall average. That helps reduce the impact of our increased summer spending.

Do you find you have to resort to budget tricks in order to offset summer spending?

A budget mentality is a nice tool when you are starting out with money management. But eventually, you need to:

Develop a net worth mentality.

This is about the long term, and looking at the big picture of your overall finances, rather than just managing them month to month. My guest post on Moolanomy looks at the difference between a budget mentality and a net worth mentality.

This post is part of the b5media Business Channel Great Blog Off! Find out more about the Blog Off here: http://www.b5media.com/b5media-blogs-for-a-cause-and-raises-money-in-support-of-charity/

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Not too long ago, I wrote about the “recession diet.” While we may not technically or officially be in a recession, many people are nevertheless feeling the pinch. And with food prices rising, it is no surprise that Spam is seeing an increase in sales (hat tip: Miki at Leadership Turn).

Yep, items that are considered “downgrades” are seeing a rise in popularity as households try to squeeze the most of their hard-earned dollars. Discount stores are seeing some success as well with people turning to the off-brands that are found at dollar stores and similar businesses.

Are you buying things differently because of new household budget constraints?

image credit: Matthew W. Jackson

If you’re like me, it’s time to make an adjustment in the monthly budget. The dairy that we use is announcing increased prices on milk, cheese and eggs. And the fuel surcharge for delivery has gone up. Again. Not that we mind that much. After all, we like supporting local businesses — especially those with sustainable practices. But it does mean that we’re making adjustments.

But we’ve noticed a change at the grocery store as well. Food costs more. And we all heard about that panic-induced trend to hoard rice a few weeks ago. (Disclosure: I did not hoard rice. There is nor reason to, since the US is not experiencing a rice shortage.)

So is wheat the next target? Probably not. In fact, the wheat harvest is likely expected to be very good this year. But that isn’t changing the rate of food prices inflation on items like bread and pasta. Why is this? Wheat prices are dropping, and the harvest should be abundant.

The answer is in other issues. Harvesting wheat requires energy. And all the steps in between — the steps that take wheat and turn it into flour for bread and pasta — take energy as well. And energy prices are going up. Then you have to transport the food to wherever it is going. So that adds to the cost.

So, it is time to accept that, right now, even with economic stimulus tax rebate checks on the way, it is time to think about what you are spending your money on. Because more of it is going to be spent on food.
image credit: US government

Not too long ago, I posted about the idea of using net worth to set goals for your personal finances as opposed to always being concerned about your budget.

In a guest post for Moolanomy (yes, I’ve been hitting up the guest posts pretty hard), I expound on the idea of a net worth mentality v. a budget mentality.

Which mentality do you have?

Trent, over at The Simple Dollar, has a very interesting post up regarding net worth. He looks at how to move from having a budget mentality to developing a mentality that focuses on net worth. This got me thinking about the differences between making a budget and focusing on net worth.

Budget v. net worth

While a budget can be a useful tool, it is important to note that a budget is really more about teaching yourself to be disciplined and to look seriously at your cash flow. The idea is to try an set up a system where you are living within your means. But it really doesn’t do much in terms of advancing your wealth because it focuses you on the minutae of your cash flow and your expenses.

When you focus on your net worth, you are looking at what you have now, in terms of assets minus your liabilities (debts and other obligations). This means that you can get a snapshot of where you are at in terms of building wealth. When you have a net worth mentality, you focus on creating goals that will help you increase your wealth (which is not the same thing as income) and/or decrease your obligations.

The idea is to set goals that will allow you attain financial freedom with wealth, rather than merely managing your resources with a budget.

What financial goals do you set for yourself?

image credit: Oxxo