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Posts Tagged ‘Budgeting’

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Taking on too much & treating yourself…

Monday, February 1st, 2010

Okay, so what happens when you decide that you want to lock down your finances, follow a budget and get out of debt.  We know that getting out of debt can be a boring and tiring experience, but you can take some precautions to guard against that. 

First of all, stick to your budget, but allow yourself a little indulgence on rare occasion.  Why?  Well, it’s my opinion that everyone only has so much willpower to give to something, and eventually they will break and indulge anyway, so little indulgences keep away the big ones.  So, what types of indulgences are little?  Well, when you’ve got your finances locked down, and you’re buying basic needs only when it comes to groceries, TV and movies/shows etc., on occasion it wouldn’t hurt to buy a nice meal from the grocery.  Make that a special family night with a nice meal and some board games or something.  Or, you could save a couple of bucks every week out of your grocery budget to take the family to the movies or some other inexpensive activity.  Your choice!  The point is to indulge occasionally to keep you focused and on task, without blowing through your budget.  If you never treat yourself, you might fall off the wagon.  Notice to those of you who are “used to” treating yourselves…this does not mean you can do your normal “treating”…no mani/pedi’s, or blowouts, or daily cupcake from the specialty $10 a cupcake store, or expensive clothes/shoes/tools.  This is a small indulgence.  A $20 pick me up a couple of times a month.  If you can’t stick to that, you’ll never get out of debt.  And no, you don’t “deserve” those mani/pedi’s, because they are what got you into debt in the first place! 

Trying to do 2 or more hard things, like getting out of debt and quitting smoking (for example) at the same time, means even more added stress to your willpower.  You have to give a little slack and indulge yourself  while getting out of debt, because the alternative,in this example, is indulging in smoking.  Not cool.  And indulging a little there would save you money anyway, since once you quit smoking, you would have a ton of cash to put toward paying down your debt!

What’s the take away?  Get on a budget.  Pay off your debt.  Learn to live like an adult who doesn’t get everything they want every time they want it.  But stay on this path for the long haul by making the occasional small ticket splurge!

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Oh, the insanity!

Friday, January 22nd, 2010

Just when you think you’ve seen all the silly things you can on the Internet, you run across something that makes you CRACK UP LAUGHING!  Such it today’s article, 9 reasons to love credit cards, by Liz  Pulliam Weston.  As the title might indicate to you, our readers, I’m not a fan…and that’s putting it lightly! 

The article is a little lengthy, but it’s worth the read, if only so you can laugh at it as you read.  Here are some highlights:

  • Arbitration – The author says that credit card arbitration is a fabulous feature.  Well, when I used credit cards, I never had to use this feature, even when I had problems with stores.  Also, opinions are split as to whether arbitration is good or bad.  This article says the consumer doesn’t usually come out on the winning end. 
  • Automatic bill payment – Obviously, you can set up your bills to be paid from your account.  So?  You can do that with a debit card as well, which comes from YOUR money, not borrowed money. 
  • Bulwark against identity theft – The author points out that credit card companies have laws in place to make sure they don’t charge you for fraudulent charges, after a $50 fee, within 60 days.  This is true.  However, debit cards have systems in place as well.  Within 2 days, it’s a $50 fee and a $500 fee up to 60 days.  Most banks voluntarily choose to extend the $50 fee to 60 days, and not charge $500.  So again, it’s a wash.
  • Credit Improvement – I wish people would quit focusing on “improving your credit score through credit cards!  Having cash to pay for things makes credit cards pointless, doesn’t it?  Which makes your credit score less important.  Yes, you might need it to buy a house, but if you put at least 10% to 20% down when you buy the house, and have a good income, I doubt they will pay close attention to your credit score.
  • Extended Warranties – These things are a waste of money most of the time anyway, so tauting them as an advantage doesn’t really make sense.  Period.
  • Interest Free Loans – Well, interest free loans don’t matter if you pay for what you want with cash!  If you don’t have the money for it, don’t buy it.  Want money for “emergencies”??  That’s why you have an emergency fund!
  • Purchase Protection - Some cards pay to fix or replace items broken that you paid for with a credit card.  They don’t do it out of the kindness of their hearts.  You, and others, are probably paying for it, you just might not know you are.
  • Rental Car Coverage – Your auto insurance covers this.  So, why do you need more?  A silly advantage, considering auto insurance is mandatory, and credit cards are not!
  • Rewards, Rewards, Rewards- Yes, some cards offer rewards, but that only encourages you to use them more!  Also, unless you stay in hotels a lot, fly a lot or whatever else they offer “points” for, the points are not useful.  Other rewards are usually not worth it, or are something that you could have bought outright, and saved on interest if you carried a balance.  I do know 1 person who got use out of their points, but it was her business credit card.  In general, not worth it!

My favorite quote from the article:  “I get all these goodies largely because so many other folks play the credit card game so badly.  The profits they generate for the credit card issuers essentially pay for my freebies.”  So, she plays the “game” well, and you pay for her rewards and benefits.  Why not just get out of the game?  Use debit cards or cash.  You’ll save more money in the long run!

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Other places to shop…

Monday, January 18th, 2010

You know, it always amazes me how many people shop “in a box”, and won’t step out of it for anything.  There are, much to the surprise or dismay of some, lots of places to shop other than the mall, outlet malls, strip malls and “boutiques”.    Consignment stores and the retail stores of charitable organizations like the Salvation Army and the Goodwill are great places to find a deal.

Consignment stores are retail locations where people take their gently used clothing and accessories are sell them at a fraction of what they paid.  The consignment store then turns around and sells the items at a discount.  This means a great savings on things for you.  A small disclosure…you DO have to scour the racks for the gems, and you DO have to scour the items for defects and you should ALWAYS wash the item before using/wearing it.  Also, I personally wouldn’t buy undergarments, swimsuits or shoes secondhand, unless your options are completely limited.  The discounts at some consignment stores can be up to 75% off the retail price, and there are consignment stores that are targeted to a specific audience, such as young teen/college age and professional women and maternity.  Check your local community for the options available to you.

As far as charitable retail sites like Goodwill and the Salvation Army, the same rules apply.  You have to look through things carefully before choosing to buy from them, and some things might “need a little work” before they can be useful to you, but these are not bad places to find a deal.  Not everything there is “crap”.  A lot of the time, things are merely discarded items that people no longer want…that doesn’t mean they aren’t worth anything.  As a matter of fact, Goodwill has an auction website, similar to Ebay, called shopgoodwill.com.  You can find antiques, collectibles and luxury goods that have been donated to Goodwill to bid on at this site! 

No matter what your thoughts on these places are, you shouldn’t judge them unless you’ve been there at least once.  If, after going to a consignment store, you don’t like what you see, simply don’t go back.  If however, you find it a worthwhile place to shop, then you are likely to save quite a bit of money over the years!

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Our State of the Union…

Wednesday, January 6th, 2010

Last night, your favorite southern couple had our bi-annual “State of the Union” or “budget committee meeting”.  Basically, a time when we sit down and review our budget and re-vamp any budgeted items that are receiving too much money or not enough money.  Now, we talk about our budget line items that affect us on a weekly basis, on a weekly basis.  These are the things we do every week, like buy groceries and gas.  The bi-annual committee meeting is for the things we don’t look at all the time, like web hosting fees and legal fees etc. 

As I said above, we also go over our budget reports to understand what is being under-funded and what is being over-funded.  We look at EVERY budget item.  Last night, we had to increase the money funding our medical budget and our grocery budget (I swear the grocery stores just keep raising the prices!).  Now, you might be asking “how do you increase a line item?”, and the answer is simple; Something else has to be cut back.  We took the money from our monthly savings (grudgingly) to fund the additional money needed for the medical and grocery budget items.  What if you have no savings?  Then you have to cut back on another line item, like cable, telephone or Internet.  Is your budget so slim that you don’t have ANYextras?  Then you need to try cost cutting to bring your spending in line with your budgeted amount, or increase your income to cover the overages.  It’s simple math…your budget must be balanced!  If there aren’t enough funds, you must cut back, or make more!

Now I challenge you to have your own budget committee meeting (if you’re single, you still need to have the meeting with just yourself, or a friend/family member you trust to share this info with)!  Sit down and figure out how much you spent on all your expenses this last year!  How much did you go over? Under?  Do you even have a budget?  First things first, you need a budget.  Get out a pen and paper, and write down all of your expenses, in order of importance (1. housing, 2. food, 3. electricity etc.), then write down your income.  Assign amounts to each category.  If you run out of income before you reach the bottom, then you either need to cut back your expenses, or increase your income.  Did you reach the bottom with money to spare?  Great!  If you have debt, use the money to pay it off, if not, start saving an emergency fund for 3-6 months worth of expenses, and after that, for retirement! 

It’s our opinion that money works for you and not against you if you watch it like a hawk.  Don’t give yourself the opportunity to mess up!  Start this year off right, and take your budget committee meeting to the kitchen table tonight!

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Get organized!

Wednesday, December 30th, 2009

It’s the end of the year…it’s time to get organized!  You need to look back at your bills throughout the year, your income and your other expenses…if you haven’t started your budget yet, now is the time!  Make it a resolution to get your life under control and to get out of debt!  Get mad!  Make the decision that this time next year, you will be out of debt (or well on your way to being debt free) and stick to it.

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We’re on vacation, but…

Monday, December 28th, 2009

I still wanted to give a tip for this Monday.  If you’ve been heading out for the after Christmas sales, remember that it’s not a sale if you didn’t need the item in the first place!  Already bought something you don’t need?  It will be a lesson in being a grown up to take it back to the store and returning it!  Make yourself proud!  Don’t fall into your usual patterns!  Save that money!  Don’t spend it!

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Gen Y-ers grow up!

Friday, December 18th, 2009

Today’s article is from Foxbusiness.com, and is titled Growing Up Financially Is Hard to Do by: Gail Buckner.  It’s some interesting commentary on how the Gen Y-ers are responding to the recent economic turmoil!

Generation Y is a term applied to those people currently 22 to 33 years old, of which, I am a member.  These people are typically the offspring of Baby Boomers, and according to many in the work force, are nothing like their parents, especially in how they view their jobs.  In the past, this (my) generation has been characterized as a bunch of job-hoppers.   But now that they and their friends are experiencing layoffs and financial problems, the number of those surveyed that had changed jobs in the last 2 years dropped from 40% to almost half of that, and almost a quarter of them plan to stay with their employer until they retire…now there’s some surprising information!

Another interesting thing of note, however, is that the economy and higher rates of unemployment have changed the optimism and confidence typically displayed by this group of people, and they are becoming more financially conservative…all I have to say is that it’s about time! 

Apparently, a new survey shows that 41% of Gen Y-ers have become more fiscally conservative in the last year, and nearly 2/3 say they’re “trying to save more now than a year ago”.  I think that is incredible!  To know that a lot of people from my generation are waking up and saving is great.  And as far as retirement, in the last year the number of Gen Y-ers that are saving for retirement rose from 18% to 53%, but the majority of them are only focused on an emergency fund (which is a good start!).  Considering that more than 30% of Gen Y-ers owe more than $5,000 in credit card debt, saving for an emergency and/or retirement is a nice change of pace. 

No matter what their motives, the Generation Y group has started to notice the benefits of saving money and job security.  I have feared that my fellow Gen Y-ers would never learn this lesson, but I am happily wrong.  Maybe it was the economy, maybe it was the fact that it became cool to be a “recessionista”…or maybe it was that we got tired of hearing the word “recessionista”, and started watching our money to get people to quit using that word…either way, it happened, and hopefully it’s here to stay!

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Stop enabling your grown children!

Monday, December 14th, 2009

It is estimated that Baby-Boomers provide $59,000 in monetary help to their grown children over a typical 5 year period.  If you’re a Boomer, you want a money saving tip?  Stop enabling your children by supplementing their income and either cut them off completely or cut your “gifts” down by 75%-85%! 

This is one of the most ridiculous things going on in our society right now.  I cannot believe that Boomers are giving so much to their grown, totally able to work (even if that job is “beneath them”) adult children.  I mean, come on…so what if the job doesn’t pay $100,000 a year with nice perks etc.  There is value in being able to say you are making it on your own.  Let’s break down that number above…$59.000 in 5 years is roughly $12,000 a year, or $1,000 a month!  That is a part time job!  You want that lifestyle?  Don’t get it from your parents, who would like to retire soon!

The bottom line is this:  If you’re a Boomer and are looking at your retirement nest-egg, realizing that retirement is going to be tough (if possible at all now or in the future), then you need to evaluate where your money is going.  If, that money is going to your children, it is time to cut them off!  They can have what’s left when you’re gone (if anything) and do what they want with it at that time.  Why would you risk your livelihood on their new car/home improvement etc.?  Teach them the hard lesson that sometimes you have to take care of yourself.  They will have to learn that lesson when you’re gone anyway, and it will be easier if they have your shoulder to cry on when they learn that lesson.

Are you the child of a Baby-Boomer?  Do you “borrow” money from them that you never pay back?  Perhaps it’s time for you to realize that you’re draining their retirement money, and that you need to grow up and pay your own way.  Nowhere in the “how to be a parent” handbook does it say that your parents are responsible for paying your way from birth to YOUR retirement!  Cut them a little slack!  If you can’t live without all of those nice things that you’re buying with their money, get a part time job…otherwise, perhaps it’s time you learned to live within your means!

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Good news! Your turkey is cheaper this year!

Friday, November 20th, 2009

Today’s article is called It’s all gravy: Cost of Thanksgiving meal sees biggest drop since 2000, by Jonathan Berr.  I am happy to share that according to this article, the average cost for a Thanksgiving meal for 10 people dropped $1.70 this year.  Now, I know that you’re saying to yourself, so what, right?  Because it’s only a couple bucks, right?  Wrong!  Every little bit helps.  When you save $2 here and there, it adds up to movie tickets, dinner out or eventually, an extra % point added to your 401k. 

Let’s not forget, however, that when we save, someone else has to take the hit.  As the article points out, in this case, that would be farmers.  They are receiving less for their products, and so that means harder times in their households this year.  I am all about a deal, but I hate that it comes at the expense of others…keep this in mind when you go to buy your turkey this year.

On a personal note, I would like to take the time to ask our readers to have a generous heart and donate a couple of cans of food to a local charity this year to help feed families who are struggling.  With a lot of people out of work, food banks and pantries will be running low on their normal stock of goods, so we all need to chip in.  At Thanksgiving, I like to donate by giving food, and at Christmas, I like to donate by giving toys, coats and other goods to local charities.  If you have $5 to spare this year (skip a latte or brown bag a day?), buy some non perishable food items and donate them.   The Salvation Army website is a good place to start.  The main page has a place to enter your zip code and find your local donation center. 

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Lay-a-way…It’s back!

Wednesday, November 11th, 2009

For a very long time, I didn’t hear anything about lay-a-way.  The stores I visited didn’t seem to offer it, and the commercials on T.V. didn’t suggest it as a shopping method.  That has changed recently, and I am quite happy about it!

You see, it’s become part of our culture to shop-shop-shop.  Retail therapy, they call it.  Think about that statement.  They want you to come and spend money to make yourself feel better.  Is that the way we should be relieving stress/improving our mood?  I don’t think so.  It’s an instant gratification thing.  We are like children with a shiny new toy…retail therapy!  How ridiculous!  Sounds like we’re simply encouraging ourselves to act like children.  I think we should act like adults.  Adults save up for things.  They have delayed gratification.  They don’t get retail therapy, they relieve stress by being with friends and family (or getting a REAL therapist, not one that doubles as a satchel purse and is called Louis Vuitton).  This, is why I like lay-a-way.  It allows people who don’t have the cash to pay for something all at once an option that doesn’t charge high interest and isn’t a credit card.  As a bonus, you don’t get the merchandise until you pay for it in it’s entirety, so it teaches delayed gratification!

I should note that we don’t really use lay-a-way ourselves, because, as most of you know, we save up throughout the year to pay for the things we want.  We have a Christmas category in our budget, that receives money each and every week.  This ensures we will have the money that we have determined we want to spend on the holiday, in time for said holiday (and in case you’re wondering, we determine the amounts in all budget categories at our “new year new budget” committee meeting, held in January).  If however, you haven’t been keeping up with your budget (and I really hope you have), then lay-a-way is the way to go for you.  Just remember this phrase…I WILL NOT use credit cards on presents!

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