If you have money in the bank, those funds could be used to put a down payment on a home for newlyweds, or to pay off student loans. If you don’t have money to spare, are you sure that going into debt is the right decision for a pair of newlyweds?

But don’t despair: it’s not necessary to forgo the wedding entirely—just approach the planning with a level head and incorporate cost-cutting measures that will result in a memorable occasion for family and friends, without incurring outrageous expense.

Start by discussing wedding expectations with your bride and both families to make sure you are all on the same page—will it be beer and fried chicken at the Elks Lodge or Champagne and Lobster Thermidor or at the Plaza?—and be clear on who will be responsible for payment.

Once the general style is established, get quotes from several service providers, and arrive at a reasonable budget. You may find that your expectations need to flex in order to remain on track financially. Weddings on a budget do not have to be chintzy or cheap; when handled correctly, the guests will never notice your penny-wise choices.

Wedding Gotchas

Industry experts estimate that couples typically overspend their budgets by 15%. We all know about the standard expenses such as catering, music, flowers, rings, attire, decorations, printing, photography, site and equipment rentals, officiant fees, and the cake.

But there are other hidden wedding costs that can add up to foil the best budgeter. These are costs such as dress alterations, tips, postage, delivery charges, gifts for the wedding party, salon costs for the bride, taxes, cake-cutting, corkage and coat check fees, and overtime charges for the band, photographer or servers. Keep these items in mind, and quiz vendors to nail down all costs beforehand.

Top 10 List for Planning a Frugal Wedding

1. Invitations. Never order oversized or oddly shaped invitations, no matter how attractive they are. Postage for a standard size first-class letter is 44¢. Over-sized or over-weight letters can costs as much as $2 each to mail. Consider sending a save-the-date email in lieu of a separate snail-mailing. If you are artistic, you may decide to make your own invitations either on your computer or by hand-writing the invitation cards.

2. Attire. Shop on eBay for the wedding dress. A gorgeous, used-once, designer dress can be had for a fraction of the price and no one will be the wiser. The groom and groomsmen can all wear dark suits from their own wardrobes (if available), meaning that only matching ties need to be purchased.

3. Timing. Avoid high-season (May through October) when prices rise sharply across the board. Avoid Saturdays and evenings to get the best deals.

4. Venue. Go for the non-traditional: parks, museums, sporting venues, private homes, botanical gardens, or beaches. You may incur extra charges for deliveries or rentals such as tents, tables and chairs, but you will probably come out ahead compared to a hotel or other event space.

5. Guest List. Trim mercilessly. This is the quickest way to reduce your bottom line.

6. Music. Consider creating a playlist of songs that can be set up on an iPod and played during the reception. You may have to rent a sound system, but this is a vastly cheaper (and more personalized) option than a band or DJ.

7. Decorations and Flowers. Make centerpieces and decorations with inexpensive, yet eye-catching items such as round paper lanterns, twinkle lights, tulle fabric, seashells, miniature potted plants or fishbowls with real goldfish. Choose flowers that are in season and avoid tropical flowers. Choose simple arrangements and add volume with less-expensive greenery.

8. Photography. Hire a pro for shots before and during the ceremony. Have friends and family take candid shots during the reception.

9. Bar. Stick to beer and wine and skip the liquor. If permitted, purchase your own beer and wine at a discount store, and bring it to the event. Even if you are charged for corkage, you will generally save on the total bar bill. Skip the Champagne toast. Champagne toasts are symbolic, and guests frequently don’t drink the Champagne anyway!

10. Seating. Use fewer, larger tables in place of smaller tables. You can seat 120 at 12 tables for 10 or at 20 tables for six. Using fewer tables saves on linens and table decorations and creates more interaction between guests.

Many blissful couples enter the meat-grinder known as the wedding industry completely unprepared. With research and planning, weddings on a budget are perfectly realistic. Planning a wedding can be a rewarding experience that will provide memories for a lifetime. And for the faint of heart, there is always Plan B: elope!

For more ideas, check out the excellent book Bridal Bargains: Secrets to Throwing A Fantastic Wedding On A Realistic Budget and the following blog posts on wedding budget tips:

• The Best Wedding Tips and Stories (an awesome collection of wedding-related posts!)
• 10 Budget Wedding Ideas From a Satisfied Bride
• The Frugal Wedding: How to Get Married On the Cheap
• Cheap Wedding Ideas On A Small Budget

Whatever the reason, increased food prices are putting a major dent in our household budget. Since we can’t do much about the prices, we have to look for other ways to reduce (or at least keep even) our overall food expense.

Food is a unique budget category in that normally when you are struggling with less income and/or increased costs, the natural inclination is to turn to cheaper alternatives. Unfortunately, as many people are discovering, when it comes to food this means an unhealthy diet.

Think of the cheapest foods at your local grocer – they are likely cheap pastas and boxed processed foods (Ramen noodles, mac and cheese, packages of potato flakes sold as “instant mashed potatoes,” etc). While these foods will do in a pinch, they aren’t exactly healthy staples to build the basis of a clean diet.

Nine Ways to Reduce Your Grocery Budget

1. Plan to shop every two weeks. Make room in your pantry (and your budget) to shop for enough food to last two weeks. The more often you see the inside of a store, the more likely you will give into temptation and deviate from your list.

2. Buy in-season produce. The simple laws of supply and demand tell us that things that are plentiful should be a little cheaper. Of course, the opposite is true if a particular produce item is not plentiful in your area, because it has to be shipped in from another part of the country (or world), and those increased costs to transport are passed along to you, the consumer.

3. Eat less. This one seems obvious, but to someone like me raised on three squares (big squares) a day, the idea of skipping a meal or two seems foreign. However, here lately I’ve been trying to eat only when hungry, not when the clock says 8:00, 12:00 and 6:00.

4. Grow your own vegetables. The last couple years we’ve experimented with square foot gardening. This year, we plan to expand on the idea and grow a variety of vegetables in garden boxes in our backyard. We also planted fruit trees last fall that will hopefully yield fresh fruits in the years to come.

5. Compare unit costs, not product packaging and creative pricing. Remember bigger isn’t always cheaper, and neither are the 10/$10 deals. I recently stocked up on a few items included in a 10/$10 sale and the next week the store returned the item to their normal price…$0.88.

6. Consider swapping beans or eggs for meats when looking for a protein source. Like any good carnivore, I like to build a meal around a good meat. Unfortunately, this can get expensive. Here lately, we’ve been enjoying eating “breakfast” for dinner – with scrambled eggs as the main course.  Beans also provide a nice source of protein and can augment a smaller amount of meat in dishes like tacos and chili to bulk up the recipe with out increasing the cost per meal.

7. Avoid the “junk food” aisle. Nothing good comes from this aisle. Soft drinks, chips, snack cakes, and cookies are simply empty calories. And they are expensive when you consider you can’t plan a meal around them. Your waistline won’t miss this aisle, either. Now, this is an area where I need to take my own advice!

8. Eat leftovers. One of the most effective ways to lower your cost per meal is to simply stretch your prepared foods across more meals. In fact, I have found that meals like spaghetti, soups, and meatloaf actually taste better the next night.

9. Freeze the extras. If you are short on freezer space, consider a second freezer to stock up on meats and vegetables when on sale, or to freeze leftovers of your favorite meals. My wife makes a huge batch of soup and freezes the portions we don’t eat the first two days for later consumption. Weeks later, on a particularly hectic day, we’ll toss the frozen soup in  a crock pot to thoroughly reheat and enjoy an easy meal.

These tips probably make sense in any environment, but are particularly important in the face of rising food costs, high unemployment and a time of high economic uncertainty. I highly recommend taking the time now to streamline your food budget and use some of the savings to build a pantry of stockpiled food.

Best case scenario, your pantry will provide cheaper food than is currently available in the store. Worst case scenario, your pantry will provide food if there isn’t any in the store. It’s my hope that we never face the latter scenario, but I’d rather be prepared just in case.

How are you dealing with increased food costs?

Photo by robson2313

PAYGO requires new federal spending to be offset by budgetary cuts or tax hikes. Makes sense; without paying as you go you will surely wind up deep in debt, which is exactly how we find our country. As most things political go, PAYGO seems to be more for show, as politicians on both sides have ignored their own rules, or taken advantage of lapses in PAYGO, to spend like maniacs.

Since the idea of debt first came along, people have opted to borrow versus saving for a variety of reasons. Farmers often needed to borrow money for seeds and tools to produce their first crop. Many business were started with loans, because they had significant upfront costs that owners were unwilling or unable to cough up. Homeowners cannot usually afford to buy a house for cash, so we choose to take out a mortgage.

These examples all seem relatively easy to justify, but then a little tool came along called the credit card, which made it much easier for households to borrow money for everyday items. With credit cards, the idea of paying as you go became nearly obsolete.

Every now and then I hear stories of someone who built their own home. They often saved up to buy some land, then the materials, then completed as much as they could on their own while saving to pay someone to finish up those things they lacked the expertise or physical ability to do themselves. I’ve always admired these types; not only for their self-reliance, but because they understood the pay as you go way of managing your money.

My wife and have implemented PAYGO in our own household, on a smaller scale. A few months ago we agreed not to sign up for any new subscriptions, or add to our recurring monthly expenses, without canceling something equivalent.

For instance, after living for more than a year without cable television to speed up our get out of debt plan, we decided to sign back up for basic programming. Doing so would add about $30 to our monthly budget. To pay for it, we scaled back our Netflix membership (a $10 savings), canceled a weekend newspaper subscription (I can read it online – $10 saved), and I canceled a forums membership I no longer participated in (at $9.99/month).

In our example, we eliminated two things that were no longer useful to us, or that we no longer enjoyed, so it wasn’t too big a deal. However, we have had times where we wanted to add a new service or subscription, and couldn’t identify we were willing to eliminate. Enter the other side of the PAYGO equation: Increasing income.

The government can increase income by raising taxes. Fortunately, we don’t have the ability to levy a tax on others and collect their money, so we have to raise the funds ourselves through work. If you receive a raise at work, you may want to allocate a small percentage of your new income to adding something to your household that would add value.

Perhaps you’d like to listen to audio books on the road to increase knowledge on a particular subject. Or maybe there is a cooking class you’d like to attend, or a gym membership could help relieve stress. Whatever it is, use a small percentage of your new, monthly income to reward yourself. Notice I said “small percentage.” There is a risk here of lifestyle creep – inflating your lifestyle to meet or exceed your new income. Tread carefully.

By implementing a pay-as-you-go system in your personal finances, you will not only avoid debt, but you will be able to take pride in the things you own because you really own them, they don’t own you. And yes, that’s right out of Tyler Durden’s Guide to Personal Finances.

*This article appeared in the Carnival of Personal Finance – Tour of Ireland edition

This morning I submitted a guest post in support of their Family Budget Boot Camp. It was tough to settle on addressing my post to one individual family, but I related most to Lori, a single mom struggling to get her finances, and her career, on track after a divorce.

As I mentioned in the post, I was raised by a single mother, so I am familiar with the financial struggles that go along with raising children on your own. My mom did an amazing job of juggling a career and being a present parent, and I have no doubt Lori will do the same.

Hope you’ll take a moment to visit the Family Budget Boot Camp site to read my post, and learn more about the families involved. I’d even suggest adding a word or two of encouragement, or sharing some money-saving tips, in the comments at Parenting.com.

My post: Guest Blogger, Frugal Dad, on the Financial Challenges of a Single Parent

Thanks to the folks at Parenting.com for inviting me to contribute!

Unfortunately, no magic debt eraser exists, but like I tell my son, “let’s pretend.” Let’s pretend for a moment that you do not have any debt. How much different might your budget look?

That’s the idea behind creating a dream budget, an exercise I have toyed with informally a few times, but was sold on after reading a post at Enemy of Debt. Here’s how I created our “Dream Budget.”

1. Grab a copy of your most recent budget. Highlight the amount of total expenses, total income and any savings contributions you are making.
2. Make a second budget minus any payments related to debt. Leave the mortgage payment for now, but remove credit cards, student loans and car payments.
3. Using this new “dream budget,” calculate the difference between total income and total expenditures. This difference is the amount you are spending each month to service debt.
4. Find a new home for the difference. What will you do with this new excess? If you are like most families with a $400 car payment, and several thousand in credit card debt, you could easily free up $700-$800  a month by paying off debts.
5. Break out “savings” category into more targeted goals. Finally, there is enough money to invest in a Roth IRA, save for the kids’ college tuition, put a little away towards a replacement car, and maybe even a little towards a down payment on a new home.

What’s standing between you and your dream budget? Debt. Debt is like a soul-sucking black hole in your financial world. Being in debt is worse than the worst job you’ve ever had, and the worst relationship you’ve ever been in, combined. To put it bluntly, being in debt sucks.

Most of us are aware of this fact, at least intellectually, but by creating a dream budget you finally have evidence of the things debt is robbing from you with each required payment, and it has a way of getting you fired up, emotionally.

Consider just the interest accumulation on your debts. How would you react if your bank was reaching in and grabbing $148 a month out of your checking account? You would be outraged, and rightfully so! Well, that’s the equivalent of allowing credit card companies and other loans to tack on interest each month on a large balance of debt. Get rid of it once and for all, and free your budget up to do bigger and better things.

Keep this dream budget handy if you feel motivation for your get out of debt plan waning. It might just be the kick in the pants you need to get back on track and make your dream budget a reality.

When the time comes to set up your debt free budget, consider using Mvelopes to create a virtual envelope budget.

Fortunately, the June 2009 edition of Money magazine generated some ideas in the article, “Discover Your Budget Style,” written by Ismat Sarah Mangla.  The article describes one method of budgeting that appeals to me.  It is referred to as the “bucket budget.”  The bucket budget is for those who prefer to track spending with less granularity.  So rather than tracking every morning latte, the dry cleaning bill, the occasional meal out with friends, and baseball cap you bought for your son, you would simply track these categories as part of a larger “variable expenses” budget.

The Money article goes on to explain how to implement the bucket budget.  I’ll consolidate their detailed steps into a few quick bullets below.

• Two checking accounts and one savings account are required
• Calculate saving contribution desired from each paycheck and have employer’s payroll office direct deposit that amount into an online savings account
• The remaining amount of paycheck should be deposited in Checking Account #1 for payment of major, fixed expenses such as the mortgage payment, power bill, etc.
• With what’s left in Checking Account #1, divide the amount by four and schedule equal, weekly deposits into Checking Account #2.  This second checking account will be used to purchase all variable budget items, such as food, clothing, and entertainment expenses.

From the Money article:

The system creates “artificial scarcity,” forcing you to live on less and within hard boundaries.

I like the idea of creating this “artificial scarcity.”  If you are like me, I tend to let cash burn a hole in my pocket, so if I withdrawal all of my spending money at the beginning of the month, or the beginning of the pay period, it tends to run out well before my next paycheck.  In the past, when this happened I turned to credit cards to float expenditures to my next paycheck, or I dipped into savings.  Using the bucket budget system, we would never be more than a week from refreshing of our supply of cash.

One word of caution:  to avoid costly overdraft fees it is probably a good idea to save up a little cushion for both checking accounts, since the timing of automatic deductions, subscription payments and your weekly allotments could draw down your balance at the worst possible time.  To keep things comfortable, I’ll try to keep $500 in each account and treat that number as the floor amount, rather than $0.

To further enhance this system we plan to incorporate our envelope budget system.  When the weekly transfers are made to Checking Account #2, we will withdraw a portion of the money in cash and use it to fill our envelopes.  This allows for some specific budget category tracking for things like food and entertainment, and keeps us from overspending in those particular categories.  For remaining categories like gas purchases or subscriptions (Netflix, the gym, etc.) we’ll stick to a debit card for convenience.

I recognize this budget system won’t work for everyone.  After all, some people enjoy tracking spending across dozens of categories.  I used to.  However, I found myself spending too much time in front of an Excel worksheet, and too much time beating myself up for overrunning the “Magazine” category because I renewed my Money subscription last month.  Just imagine–if I had continued to be that strict on my budget categories I would have missed out on reading about this very idea.

Budget Committee Meeting Minutes

Balance checking account.  The first item addressed is our checking account, which by this point in the month could usually use a quick balancing and reconciliation with our online account.  We make sure all outstanding checks are accounted for before “closing out” the month’s final balance and begin tracking the new month.

Review last month’s budget.  It is also at this point that we perform a final review of our budget categories together to determine where we missed the mark, and where we were successful.  The review for March revealed I spent too much money on eating out.  My excuse was that I was on the run a lot visiting my mom (who remains hospitalized), but really that’s a poor excuse – I could have packed something to eat or waited until I got home.  Sometimes you just can’t account for everything when setting a budget a month in advance.

Update personal balance sheet.  If we have stuck to the plan this part is always something to look forward to, but if we have spent more than we should, or not saved as planned, we usually dread this review.  Take an inventory of all your debts and update their balances in whatever format you use to track your net worth.  We use a simple Microsoft Excel worksheet with a column for each month and a list of debts and assets down the side.  Looks like we are on track as our debts continue to get smaller, and our savings continue to grow.

Modify budget amounts for next month’s expenditures.  Some months we just carry forward the budget amounts from last month, but it’s rare.  There always seems to be something happening, especially when you have kids in school.  Yearbooks, camp registrations, clothing, and spring pictures were all mentioned yesterday and affected a couple categories.

When my wife and I first married I handled all of the bills by myself.  After a couple years my wife began to take a passive interest in the finances, but was never particularly interested in knowing all the gory details of debt, account balances, etc.  Basically she just wanted to know how much was in the checking account at any given time.  I recognized that to pull off our financial turnaround I would need her support, and started holding these monthly meetings to discuss our finances.

At first the budget meetings seemed like a chore, but over time my wife enjoyed having input in the process, and I certainly appreciated her input.  With us working together we were blindsided far less by unexpected expenses.

If you are not currently doing something similar with your spouse, I highly recommend sitting down tonight and reviewing finances together, even if it means missing the latest episode of Desperate Housewives.  That’s what TiVo is for!

In the early chapters of his book, Cramer discusses a unique way of budgeting that carries monthly expenses out to yearly outlays. It got me to thinking. My wife and I are big soft drink drinkers. Besides them not being healthy, I wondered in what other ways these things were affecting our lives.

$360 a Year on Cocal Cola

In a given week we probably go through 2 twelve-packs of Coca Cola (or Diet Coke, depending on how good we are being, or not being). Our local grocery store generally offers a 3/$10 deal making these close to $3.50 each with sales tax. That comes out to $7.00 a week on soft drinks. Convert that to a 52-week, annualized expense and it comes out to about $360 a year for our family budget’s food category. That is nearly a dollar a day!

Over the next couple days my wife and I plan to take a look at our family budget and annualize all our expenses to determine what’s costing us the most over the course of a year (can you imagine what the cable bill looks like…yikes!).

By magnifying these monthly household expenses by 12 it really helps to illuminate those categories of the budget that need to be trimmed. Over time, we plan to create family budget spreadsheet to track all of these expenses (we already budget cash expenditures each month using Mvelopes – an online envelope budgeting system), and I’ll now have an “annual” column to calculate as well.