ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Positive Dollar Budgeting

Updated on June 9, 2012

Getting Your Budget into the Positive

Many people are in negative dollar household budgets, since their overspending on credit cards or taking out loans has set them on this path.

This often happens from a change in circumstances. The debts and usual expenses keep going out, but the family has less money coming in. Every week I meet nice people who are suffering in this particular situation, they are often hard workers too, and so it could happen to you.

What is Positive Dollar Budgeting?
What I've learned is you need to develop your budget with a view to get a certain balanced figure per month, plus 10% more.

This 10% is for your emergency fund - kept in a separate saver. And if it builds up to more than 2 or 3 months income, then it can feed into your mortgage offset, or future fund.

When you are out of balance with the budget, then you both need to start on the most flexible expenses. These are:

  • entertainment
  • alcohol
  • takeaways/ cafe / dining out
  • homewares
  • furniture, except whitegoods
  • holidays
  • clothing
  • gifts, and
  • food (to some extent)

You also need to avoid - or at least remember - some hidden expenses that can "blow the budget". These include:

  • Train fines (travelling without a ticket)
  • Speeding fines
  • Out-of-registration fines
  • Drivers license expired fines
  • Bill overdue payment fees
  • Credit card overlimit / late payment fees (from $9 to $30 each)
  • Many excess withdrawal fees
  • Centrelink repayments
  • Accountant yearly or quarterly fees.


Many of these can be avoided by good planning or at least awareness. If you're at a loss for paying a bill or you don't have enough food, go to see your Neighbourhood Centre or local church charity. If you don't want to do this, at least ask for the hardship officer at your utilities provider. Explaining your short term problems, you can usually negotiate better payment terms. In some cases, charities will help out with a voucher, a food parcel, or furniture.

Credit Cards and Fees

If you have a credit card with a high interest rate and rewards points, then if you are not paying the full balance off monthly, you need to look for ways to replace or eliminate it. Look for a zero percent balance transfer offer. Then when you get that card, do not use it - in fact, put it in the freezer in a block of ice. This is because it is a lethal weapon, and new purchases may be charged at 18% interest or more (Australian rate).

Be highly aware of when the transfer offer reverts to a regular rate, and be aware of any fees involved in the transfer (read more tips on what to avoid with balance transfers).

Using credit cards makes positive dollar budgeting pretty much impossible. You need to know exactly what you spend, and have control over it as much as possible. Even people on very good incomes ($80,000 per year plus) have difficulty knowing where their money is going, and often do not have an emergency fund. If their credit card limit is their so-called 'emergency fund' this is not a good plan since if they lose their job or get very ill, they will not be able to pay it back for a long time. So these are the reasons that I advise against them.

You can keep track of where your money goes with the free online budgeting software or else download your banking account into a spreadsheet (this is best if you keep track of all cash buys for manual input, and use a Visa Debit for everything else).

Positive dollar budgeting is all about being in "positive territory" and saving something for the future.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)