Cooking on a Budget

Looking for a gift for both your wallet and your waistline? This weekend, instead of heading to the nearest restaurant, why not fire up the flavor in your own kitchen with friends and family?

“Inviting guests into my home is like sharing a piece of myself. It's a comfortable setting and it allows me to dip into my creative outlet,” says Kelsey Nixon, chef and former contestant on the “The Next Food Network Star” reality TV show. “There is a feeling in a home that you can't recreate in a restaurant.”

If the idea of an elaborate dinner party seems too time intensive and costly, here are a few simpler ways to entertain at home:
Drinks and desserts: Skip the cost of full entrées and limit the menu to all that is decadent. What’s your pleasure: champagne and cupcakes, cocktails and chocolate-dipped fruit? Offer a variety of drinks (be sure to include non-alcoholic options) and sweets for an event sure to delight every attendee.

Recipe exchange: Choose a theme and invite your guests to bring their best dish to share. For example, you could host an appetizer night or one featuring 30-minute meals. Ask each guest to bring enough copies of the recipe to give to everyone in the group.

Theme potluck: A variation on the recipe exchange, you can assign parts of the meal to various friends or family members, all based on a theme. The theme could be as broad as “Cuisines of the World,” for example, with guests bringing appetizers, salad, dessert, drinks and side dishes to represent different countries.

Ready to get started? Here’s a summery recipe that works as an appetizer for nearly any type of gathering.

Fresh Fruit Salsa with Cinnamon Chips

Yield: 10 servings

INGREDIENTS:
2 kiwis, peeled and diced
2 Granny Smith apples — peeled, cored and diced
1 pound strawberries, diced
8 ounces fresh raspberries
3 tablespoons brown sugar
10 (10-inch) flour tortillas
1/4 cup butter, softened
1 cup cinnamon sugar

DIRECTIONS:
In a large bowl, thoroughly mix kiwis, apples, strawberries, raspberries, brown sugar and fruit preserves. Cover and chill in the refrigerator at least 15 minutes. Preheat oven to 350 degrees.

Spread one side of each flour tortilla with butter. Cut into wedges and arrange in a single layer on a large baking sheet. Sprinkle wedges with desired amount of cinnamon sugar.

Bake in the preheated oven 8 to 10 minutes. Repeat with any remaining tortilla wedges. Allow to cool approximately 15 minutes. Serve with chilled fruit mixture.

—Recipe courtesy Kelsey Nixon

The Pleasures of Saving

When the recession hit, Americans responded quickly by changing their habits. The savings rate grew steadily in 2008, rising to 2.9 percent in the final quarter, and economists are predicting it will continue to grow as much as 6 percent.

Kelly Walters of Gulf Breeze, Fla., is one individual newly converted to the pleasures of saving. “I used to be a real keep-up-with-the-Jones’ guy, especially when it came to electronics and cars,” he says. “But I’m amazed at what a great feeling it is to have some money stashed away. I find there’s even a magic number — as long as my wife and I have a certain amount saved in our saving account at the credit union, I feel a sense of well-being I never had when I was living paycheck-to-paycheck and juggling to make bill payments every month.”

Walters finds that watching his savings grow affects his other financial behaviors. “The more we save, the more cautious I am about big purchases that could erode our savings,” he explains. “Now I feel sorry for my friends when I see them making choices, such as upgrading a car, that are based on status, rather than on what’s best for their families.”

Saving goes hand-in-hand with knowing exactly where and how your money is being spent. So, to help beginning savers launch their savings plan, many financial advisors recommend creating a budget if you don’t already have one. For those who are having particular trouble putting a check on uncontrolled spending, advisors will often recommend a micro-budgeting exercise, where household members track every penny they spend for a week or more, to learn exactly how much every spending habit costs.

These exercises can prove very valuable. But to jump-start your savings plan, the best advice is to simply put some money into savings first before a single bill is paid. Make it the first priority, even if it’s only $5 per pay check. As your savings grow, you’ll find ways to cut spending even more and make the savings grow faster, because you’ll learn the pleasure of saving.

Basic Saving Tips

• Bring lunch to work. If buying lunch at work costs $5, but making lunch at home costs only $2.50, then in a year, you could afford to create a $500 emergency fund and still have money left over.
• Save your loose change. Putting aside fifty cents a day over the course of a year will allow you to save nearly 40 percent of a $500 emergency fund.
• Ask your physician to consider prescribing generic drugs. Generic drugs can cost several hundred dollars less to purchase annually than brand-name drugs. 
• Use only the ATMs of your credit union. Using the ATM of another financial institution once a week could well cost you $3 a withdrawal, or more than $150 over the course of a year. 
• Keep your car engine tuned and its tires inflated to their proper pressure. Doing both can save you up to $100 a year in gas.
• Borrow books rather than purchasing them. Borrowing books and reading magazines at your local library, rather than purchasing reading material, can save you hundreds of dollars a year.

Back to Basics: Budgeting 101

BUDGET – It’s really not a bad word. Unfortunately though, these six little letters can make the toughest among us cower. Resist your instinct, grit your teeth and read on.

Budget is perceived to be a word of constraint, but it should rightly be considered a word of empowerment. A budget doesn’t limit the individual or the family, but rather the limitation comes from the amount of household income relative to objectives. A budget is a mechanism that helps you recognize this natural limitation and make better choices in light of it. Take some time this summer, find a quiet place to work and begin developing a budget. You’ll be surprised at just how liberating it can be.

Step 1: Develop a clear understanding of your needs, wants and priorities. Write a list of everything you need and want. Next, think about and prioritize your wants. There are no right answers here. While drinking a $5 latte on a per day basis is not more important than retirement to me, it does not make it wrong if this is a priority for you. Label each want with a number that corresponds to its level desirability. After you have prioritized your wants, calculate the cost of each want. Many of these costs are easy to calculate, but some require a greater level of expertise. Things like college and retirement costs often times require a more detailed calculation and professional help may be in order.

Step 2: Clearly understand your income. This is a fairly easy task. You should consider all sources of income, not just your employment income, but also any rental income, interest or dividend income, pensions, and social security. If you want to develop a monthly budget, make sure you list all income in terms of monthly income (There are 4.33 weeks in the average month).

Step 3: Assess and categorize your expenses. This is a little more difficult, but reviewing bank and credit card statements can make this process easier. For variable expenses, you may want to look back over a period of time to compute your average monthly expense. For annual or quarterly expenses, be sure to adjust them to reflect the monthly cost. You will then use the wants/needs list that you created in step one to categorize these expenses. Once this data is in front of you, take some time and review it. You might be surprised at the amount you are spending on groceries, eating out or filling up your tank. This is what we want to fix and where the fun begins.

Step 4: Create a budget. Obviously, you have to insert your needs first. You may want to take some time to consider each need and its associated cost to ensure that you are getting the best deal.

Step 5: Adhere to your budget. There are many systems out there and you have to find one that works for you. I would recommend taking a look at the envelope system of budgeting or some derivative. If you are more technology savvy, you may want to utilize mint.com or similar personal finance websites. The key is not how you stick to your plan, but that you do stick to your plan.

After assigning a price tag to each need item, subtract the total of those costs from your monthly income. This calculation will leave you with your discretionary income. You will want to parcel this money out to your wants based on your personal prioritization.

A good budget will help you understand where your money is going and help you make better decisions about how to manage your financial life.  Sites like mint.com help you quickly pinpoint weak spots in your spending and see how they add up.  For example ongoing debits like subscriptions and memberships can really start to add up, or extra curricular classes might start to resemble private education when totaled.  Creating, understanding and managing your budget will help you allocate your money towards things you really want and help you make decisions about cutting things that don't fit into your big picture plans.