Cutting Your Household Budget


When major changes occur in a family's earnings, many people choose to cut back expenses to determine a revised budget that adapts to the changes. Another reason to cut back a household budget is the realization that you don't really need to spend as you have in the past. Some families just choose to simplify so their focus moves from a more commercial lifestyle to one more conducive to quality time, meaningful experiences and pleasures money cannot buy. Whatever your reasons for cutting back your household budget, work with your family to gain their support and understanding so everyone can adjust.

Things You'll Need

  • Notepad
  • Pencils
  • Bookkeeping/accounting spreadsheets (print or software)
  • Checkbook(s)
  • Calculator
  • Previous monthly budget
  • Current list of expenses

Tips


  1. Review your existing budget or one you have recently used to calculate your monthly needs. Tally all expenses. Include mortgage or rent, utilities, insurance, food, car expenses (gas, oil, maintenance), education, clothing, travel, gifting, savings, miscellaneous purchases and whatever other items you have regularly spent money on to date.

  2. Compare your current income to the previous expenses. Subtract the anticipated income amount from the total of the expenses to get a figure that shows where you fall short. For example, in the past you've had $3,000 per month income, and your expenses including $200 for savings totaled exactly $3,000. Your new income is $2,200 per month. When you subtract $3,000 in prior months' expenses from $2,200, you are left with a shortfall of $800.
  3. Invite your spouse or partner and family members to sit with you to discuss how best to trim your household budget. Get their input and ideas. If the cutbacks are due to someone losing a job, which can be devastating to families, talk through your fears, worries and options calmly while also discussing other potential ways to meet your needs. If you are simply choosing to cut back because you want to save more, or you find you've been spending too much on things you don't really need, then share your thoughts and ask for input before finalizing anything.
  4. Create a new budget listing the items that are absolutely required for your general living needs. Costs for shelter and food are priorities. Ideally, make two columns next to each other and list the expenses down the page on the left. The first column next to the list of items will include all prior costs. The second one will give you revisions to meet the new income level.
  5. Work your way down the list of expenses you previously made, taking into consideration where you can trim corners. For example, if you have spent $100 a month on gifting, change the figure to $30 for items to make your own gifts rather than purchase ready-made items. Another area to trim is fuel costs -- look into carpooling, taking the bus, or using one instead of two family cars.
  6. Think through each expense you have commonly had in the past and ask yourself how much you truly need to spend for each budget item. Does your wardrobe need updating every six months, or can you stretch it out to a year? Ask yourself if you really need to go to the movies weekly, or would renting be less costly? Follow through until you've thought out all budget items.
  7. Tally the new figures and keep revising until the income and expenses match. Begin to live with your new decisions as soon as possible. Sometimes, having advance notice of financial changes can help you plan ahead. Some financial advisers suggest always having savings that equate to about three months living expenses, or job-loss insurance. Yet not all families are able to make ends meet, much less have extra for savings. Use your best judgment and research your options.


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Education Budget Reduction Strategies


School education budget reduction strategies may mean “doing more with less” for all school districts. In a perfect world all schools would be created equal and never face a shortage of learning materials. Unfortunately teachers, administrators and parents are forced to live within the budgetary confines in reality. Three distinct factors impact how much money a school district can spend to educate students -- federal funding, state funding and local property taxes.

Personal Responsibility

  • There are many ways to be more frugal in the classroom to stretch your school district dollars further. If you turned back the time dial about 20 years when today's teachers were students, several ideas will quickly come to mind. The cost of paper, copier ink and rental or maintenance agreements for the machines themselves total thousands of dollars per classroom each year. Instead of relying so heavily on printing daily worksheets, assignment schedules and spelling lists, task the students with writing down the material themselves. Even younger students can accomplish this chore with practice, which was commonplace for decades in American schools prior to the 1970's. By writing the information on the classroom whiteboard or giving it orally, it becomes a writing and listening assignment.

Web Based Communication

  • Utilize modern technology to share information with parents and reinforce classroom assignments. School website systems typically allow each teacher to have a page to post information and upload forms. Even if all of the parents did not have online access or a personal e-mail, you could cut down on the number of forms and notices sent home by approximately 95% each year. Most school forms request parent e-mail and cell phone numbers on the entry forms at the beginning of each school year. Plug in all of the parent e-mail and cell phone contact information into your cell phone and laptop to send mass messages quickly and without the added cost of school copier supplies and electricity. Add an online form completion function to the school website to save the office stay time and copier cost for necessary forms. Parents can complete and update information at their convenience and not have to hand-write information for each child in the family. The school secretaries will be able to store the information from the website and access them much more quickly than printed forms.

Aides and Tutors

  • Coordinate with local colleges for volunteer educational aids and tutors. Students may flock to an internship opportunity which will look good on their resumes and perhaps earn them college credit. Do not limit the scope of the volunteer corps to education majors. College students majoring in a foreign language, history, art or technology can aid teachers in specific classrooms. Although laying off teacher's aides and tutors is not an ideal situation, when working with reduced funds it may be the reality. Retired teachers, parents and grandparents may also be willing to lend a hand to help with small tasks, monitor recess and study hall sessions.

Field Trips

  • Field trips are also a common casualty when the purse strings tighten for school districts. If the cost of visiting community attractions is too high, duplicate the experience at the school. Network with area businesses, colleges and attractions to the school. You could organize a culture fair, science fair, farming or animal event outdoors and workshops related to career exploration. Virtual field trips to locales around the world via web cams are offered through many educational websites.

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Strategies For Cutting a Budget


Budget cutting can be one of the most challenging tasks in financial planning. Doing more with less is a main goal for managers who pursue budget reductions. Successful execution depends on effective business planning and people management. Any downsizing or cost cutting must not harm the major capacity of an organization. Managers should determine the right size of the cuts, choose applicable strategy, ensure sufficient cash balances and communicate all actions to staff members.

Establish the Cutting Plan

  • The first step in developing a strategy for cutting a budget is a clear definition of reasons why budget reduction is necessary. Management should have common understanding of reasons driving the cuts and agree on all steps for budget reductions. After the size of cuts is determined all upcoming changes must be communicated to personnel.

Strategy

  • There are three main strategies to cut the budget: across-the-board cuts, targeted cuts and technology-driven cuts based on outsourcing. Across-the-board cuts, which cut equally across all departments, can endanger the main business of the organization if it harms major profit centers. Targeted cuts are relatively easy to manage because they relate to a particular business unit. Technology-driven cuts are based on technology advancements and require careful study of new opportunities and whether outsourcing brings new benefits to the organization.

Cash Balance

  • The main danger of budget cutting is a lack of cash for financing the company's operations. Therefore, as a part of any reduction plan, managers need to ensure that the company has enough cash to cover operational expenses and pay immediate expenses. The strength of cash balances is an important element of the successful budget cutting.

Communicate

  • Translate your budgeting initiatives to company's personnel. Explaining reasons for cuts and how they relate to sustainable development of the company is necessary to gain support at all levels.

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What Is a Budget Cut?


Government entities, businesses and individuals create budgets to manage their daily financial affairs. While all thrive on having a balanced budget, the term "budget cut" is largely associated with governments, which are charged with making sure their spending does not outpace their revenues. If that happens, budget cuts may be in order.

Time For A Budget Cut

  • State and local governments provide a wide variety of services to citizens, including those for education, health care and transportation, using collections from income, property and sales and use taxes. If any or all of these taxes decline, services end up on the chopping block as a means to reign in costs.
    Most budget cuts occur during economic slowdowns or recessions, which is usually when tax revenues decline. They are rare during booming times when the economy is strong, because there are usually enough revenues going into government coffers to take care of spending needs.

Who Makes the Cut?

  • Government officials, including lawmakers, are responsible for making sure budgets are balanced. They do this through a series of financial planning meetings where they gather information about the spending needs of government departments.

Health Care

  • Health care services include the operation of hospitals and clinics. Budget cuts could lead to a reduction of their staffs, including doctors and services. Cuts can also lead to the closing of some clinics, and in worst-case scenarios, hospitals could be closed.
    Patients receiving prescriptions at discounted rates may lose that benefit. Programs that offer free check-ups, dental and vision screenings and other services could be scaled back or eliminated because of budget cuts.

Transportation

  • Roads and highways are in constant need of either being built or repaired. While citizens may see projects for them as being desperately needed, officials often have to turn to transportation projects as a way to make budget cuts. They do this by delaying projects, scaling them back or canceling them all together.

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How to Plan a Budget Cut in Nursing


Budget cuts are inevitable in any business when revenues decrease and expenditures increase, and this is true for health-care facilities such as hospitals, doctor offices and nursing homes. The nursing budget can be one of the areas administrators try to pare down to improve the bottom line.

Tips


  1. Notify staff about impending budget cuts. When business is down and money is short in health-care, most staff members and nurses know it. Let everyone know that budget cuts are going to occur before you even decide what exactly is getting cut. This prepares them for staff reductions and cost-cutting measures that may be employed in the future.
  2. Allow staff to provide suggestions for budget cuts. Nurses and other staff in a medical facility are often aware of excess spending that occurs in their specific area. They may be able to provide suggestions on purchases that can be cut or a way to reduce expenses that will have minimal effect on duties and performance while saving the organization money.
  3. Make a short-term and long-term plan. Unfortunately, you don't always have a clear indication in nursing or health-care of how long a budget cut will last. You may only need to cut back on expenses for one year, or the deficit could last much longer and require cutting expenses for several years. As a health-care organization or nursing department, you need to determine a short- and long-term plan for making it through the budget woes you're currently facing.
  4. Determine what types of cuts would be best to make. Look at services, staffing, hours, purchasing, employee benefits and any other expenses that may have room for reduction.
  5. Make the tough decisions. One of the hardest budget cuts you may have to make in nursing is cutting staff or reducing the hours each employee can work. Be sure to consult with key people in the organization to ensure that your cuts do not have a detrimental effect on patient care. Also be sure to consult with your Human Resources department to be sure that the cuts you are making are fair and legal.
  6. Make a plan for how the company will continue after the cuts are made. Your remaining nursing staff will be looking for reassurance and leadership and will want to know how their jobs might change.
  7. Make a plan for notification and departure. If you are laying people off, notify them as quickly as possible so that word can not spread before people learn that their jobs were eliminated.
  8. Announce the cuts. Be sure to plan meetings that are convenient for all effected. Invite key managers and Human Resources staff to attend to help answer questions your staff may have. Be honest, even if you have to tell the staff that you are not sure what the future holds. Trust is key when cutting a nursing budget.
  9. Arrange for services of laid-off workers if you can afford it. Look for companies or government agencies that can provide counseling and placement services for people who have lost their jobs. Providing this type of package shows current and former staff members that your company cares about them.


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How to Cut the Office Supply Budget


Businesses everywhere try to save money any way they can, especially if it prevents laying off employees. Smaller companies have a hard time financially as it is. There are many things that companies of any size can do to help save money around the office. The office-supply budget is one place where companies can cut back and save a few bucks. Look at last year's budget and plan to spend less this year.

Tips


  1. Use scrap paper. Do not throw away the paper that comes out of your printers only half used or junk mail that comes from your fax machine. Start a box for saving scrap paper. Use this scrap paper for inter-office memos or other paperwork to save on your clean paper. Do not use scrap paper for your clients, however. Give them clean, new paper.
  2. Think about the pens you typically use in your office. Use ballpoint pens for much more ink usage. Keep in mind that the ink from gel pens might write nicer, but they last only about half as long as a ballpoint pen.
  3. Reconsider leaving on the counter that bowl of mints or candy for your customers. Know that candy is not a huge part of your office supply budget, but that every little cutback can help, especially since it is probably your employees that eat most of the candy and not the clients.
  4. Find an office supply store that has rewards where the more you spend, the more you receive in free merchandise.
  5. Recycle your ink cartridges. Have your ink cartridges refilled instead of buying new ones. This can save you up to $10 per cartridge depending on the type you have. Find an office supply store that gives you money in exchange for used ink cartridges, even if they are no longer viable.
  6. Purchase generic brand office supplies. Pens, paper and staples are pretty much equal no matter what brand they are, except for the price.
  7. Look for sales on office supplies. Buy cases of paper or envelopes when they are on sale instead of waiting until you are completely out and have to pay full price. Buying in bulk is also a helpful way to cut expenses.
  8. Lease some of your office equipment instead of buying it. In some cases, purchasing equipment comes with contracts that allow service only on broken-down equipment, which can be an outrageous cost, or you might have to pay for each copy you make on a copier once you get past a certain limit.


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How to Write a Memo Announcing Budget Cuts


A memo containing the bad news about budget cuts is as stressful for the person who has to write it as is for the employees who receive it. But there are ways to handle crafting the right sort of memo for this unhappy task, and it involves keeping qualities such as tone, directness and empathy in mind. Face the bad news squarely in your memo, explain what happens next, and you will go a long way toward a reasoned acceptance of this negative situation.


Tips


  1. Explain what's happening as soon as you can in the memo. Begin with the recognition that the news you're going to deliver is unwelcome. Then lay out the reasons for the budget cuts, and do so in a calm, rational manner.
  2. Describe what the budget cuts mean for employee jobs. That's the biggest question you'll have and you need to address it early on. State what departments in your company will be affected by the cuts, and how many jobs will be on the line.
  3. Avoid using angry, condescending or mocking language anywhere in your memo. Respect your employees by telling the truth, and in a compassionate fashion. But do not apologize or write excessively about how upset you feel. Your employees are likely to see such comments as insincere.
  4. Express interest in feedback. Inform your employees how they can reach you with questions about the budget cuts. Try to anticipate the sorts of questions they will ask, and be prepared to give credible, concise answers.
  5. Thank employees for their time, not only for reading the memo, but for their hard work and commitment on the job. Avoid phony compassion. Instead, show empathy and concern. Give them support by including information in your memo about counseling and other forms of employee assistance that might be available.
  6. Direct the employees to human resources for more information about the budget cuts. While that department should inform employees about arrangements such as severance pay, insurance, and job placement, avoid sending employees there to answer concern-oriented questions. It's your responsibility to make employees feel more at ease, and they should come to you with those questions.
  7. Include any attachments you may have regarding the budget cuts. After signing off your memo with a pledge of availability for any questions, you can also add a postscript that directs readers to charts and other statistical information that backs up the decision to cut the budget. This may help employees better understand the reason for the move.


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