One saved is one earned. Image: stevendepolo/Flickr/CC BY

The economic crisis affects most of us every day as we tighten our belts and keep our wallets in check. But like a dieter craving sweets, temptation is always there to consume beyond our means. Thankfully, there are simple things you can do when the cravings get to be too much.

Think ahead

Thinking long term can help. Instead of seeing savings and frugality as a chore, think big picture. You and your family will be happier if you aren’t overextending to pay off last month’s splurge.

Realistic frugality begins with a realistic plan. If a budget is too restrictive, it adds stress to your life. That constant pressure may lead to abandoning the budget altogether. Make your plan realistic, but not a “starvation diet.”

Include some fun

While a budget must begin with month-to-month obligations and essentials — mortgage, groceries, car insurance, utilities –  it should also include some “fun money.” If you enjoy sports, make sure to include some greens fees or club dues. If concerts or theater are your thing, figure in a ticket every couple of months.

Another way to achieve this is to keep a “fun fund,” which is reserved only for a specific goal. Instead of giving in to every impulse, focus on the really satisfying ones and put a little away toward it out of every paycheck. Maybe there is a trip you want to take, or one luxury item that you truly want. With a little patience and persistence, it can be yours.

Ways to cut corners

For the day-to-day items, there are many things you can do to cut corners. Here are just a few suggestions to get the ball rolling.

Most beauty schools and community colleges offer cut-rate haircuts and beauty services, as students need opportunities to practice their craft. While that may sound risky, rest assured most places only let advanced students touch the paying customers.

Second-hand and thrift stores are a wonderful resource for items we use every day. Flea markets, garage sales and Craigslist are good, too. Somebody once said one man’s trash is another man’s treasure. Go explore. You never know what you might find for a song.

Fuel expenses are one of the worst drains on our resources these days. Try public transportation, carpooling and consolidating trips. Remember, the less you are behind the wheel, the less you are spending.

Tell yourself ‘Wait’

The best thing you can do to stay frugal and on budget is tell yourself to wait. We see something on television, online or in a store and think we just have to have it. Tell yourself, “Wait.” How many times have we given in to that urge, only to see the item gather dust or wind up in the next garage sale? Chances are it is a whim brought on by budget fatigue, and the burning desire will go away. If the feeling persists, then maybe it is something worth saving for in your “fun fund.”

Sources

Walletpop
The Frisky
Retire by 40

Couples fighting over money is tragic. Life is hard enough. (Photo Credit: CC BY-ND/Media Anarchist/Guerilla Blog)

Loving relationships are built on a foundation of trust. For couples to live happily ever after, they must be able to trust one another with sensitive information, including knowledge of personal finances. If a couple isn’t on the same page – if they’re fighting about money – dark times lie ahead. Jill Gianola, a registered financial advisor with the National Association of Personal Financial Advisors, has some advice for how couples can best avoid money arguments.

Know your money personality

Using money wisely means different things to different people. Some see money as a path to short-term happiness, while others view it as a sign of future security. Once you understand how you and your partner view money, you can begin to form a meeting of the minds when it comes to planning your finances. Hopefully, your money personalities are reasonably compatible.

Share feelings and experiences

Rather than using a credit card statement like a cudgel to subdue your overspending mate, come down from the pulpit and share your feelings. Even talk about how you learned about money, and encourage your significant other to do the same.

Set aside a quiet time and place to talk with your partner about money attitudes. This is not the time to drag out the credit card statements or lecture your partner. Instead, talk about how money was handled when you were growing up. Share your fears and talk about what you hope your money will accomplish.

Talk about your savings goals

There are always larger financial goals on the horizon, such as funding a home, buying a car, or preparing for education or retirement. If you stay focused on the long-term goals as a couple, you can more easily commit to saving enough each month to reach those goals within a reasonable time frame. Thinking long term and knowing you can achieve your goals brings a confidence melts away a great deal of stress.

Your own private slush fund

This is nothing nefarious. Each partner should have some of their own money socked away, for them and only them. Use it for eating out with friends, or whatever impulse expenses that don’t fit into the larger budget.

Go for the switcheroo

If your money personality is significantly different than your partner’s, all may not be lost. An exercise in empathy could do the trick. Take a week to switch roles. If beloved is a binger and you’re a hoarder, try some role reversal and see what happens. Once the binger gets a close look at the books, perhaps they’ll see how much damage regularly unchecked impulse can do. Just make sure they pay the bills during the process.

If all else fails, call in the cavalry

If arguing over money simply can’t be helped, a neutral third party may be the answer. A financial planner can help arguing couples to define their goals with greater clarity and lay out an effective strategy. The next step beyond that would be couples therapy, as money probably isn’t the only issue on which you and your mate clash.

Sources

National Association of Personal Financial Advisors

SmartMoney.com

Couples, stop fighting about money

Get serious about extreme couponing and save cash. (Photo Credit: CC BY-ND/Dana/Cooking at Cafe D)

Saving money can be rigorous, but the rewards are ample. This is particularly true with your grocery budget. Tricks of the trade like “extreme couponing,” stockpiling and waiting for sales and clearance may seem like a bother at first, but the money saved and the pounds lost are worth the effort.

Kathy Spencer knows how to stock up and save

Boxford, Mass., mother of four Kathy Spencer spends a few hours each week clipping coupons and browsing the aisles of her local supermarket. According to MyFox Phoenix, the self-proclaimed “Coupon Queen” spends as many as four hours per week at the grocery store, hunting for deals. This dedication has enabled her to feed her family of six (plus one dog, two cats and a rabbit) for less than $10 per week.

Spencer’s nose for extreme couponing and stockpile-friendly deals even reduced the bill on a recent grocery shopping trip from $279 to 39 cents.

“I had always used coupons for items I would buy regularly, but as I started pairing what coupons I had with what was on sale versus using a coupon for what I normally was brand loyal to, I soon discovered if I had more $1 off coupons for items that went on sale for $1, I could get a stockpile of that item and not pay a penny,” Spencer told WorkItMom.com.

Double your coupons and freeze for savings

Buying multiple copies of the Sunday newspaper in order to secure multiple copies of valuable grocery coupons and frequenting online coupon sites work, but the real trick is to shop at stores that will double coupons. Spencer does it, and so can you. Doubling a 50 cents off coupon to get $1 off makes a big difference and makes stockpiling food possible.

Storing non-perishable or long-lasting bulk foods that are free or almost free can save you from emergency or impulse buys later, which almost always come at a premium. Plus, freezing meats for the long haul can give families numerous healthy food options.

Dietitians say it can be done

USA Today reports that in a recent study, a group of dietitians found that it is possible to feed a family of four for less than $10 without resorting to extreme measures like gonzo coupon-clipping. A popular suggestion was to make big sandwiches with fresh-baked, whole-wheat bread. Use sliced turkey, some cheese and green- or red-leaf lettuce. Leave out the lettuce and turn it into a panini if you want it hot.

By doing this and serving seasonal fruit as a side dish, families can not only save money by avoiding packaged, processed foods but can eat healthily. Substitute hearty soups, simple chicken dishes, Sloppy Joes, large salads, omelets or other egg dishes for similar effects.

For the meatless crowd, Keith Ayoob of New York’s Albert Einstein College of Medicine suggests cubing a 12-ounce block of tofu, cooking it in tomato sauce and pouring it over whole-wheat pasta. Add a salad and you’ve got a healthy, inexpensive meal.

Sources

MyFox Phoenix
USA Today
Work It. Mom!

Saving $100s weekly

A personal budget is necessary to keep finances in order. (Photo Credit: CC BY-ND/vanuk/Dreams Come True)

Making a personal budget is an essential element of being financially stable, yet 94 percent of Americans wish they were better at it, says the Financial Planning blog. Building a successful spending plan requires that all regular and semi-regular expenses are accounted for, yet people still tend to forget things that can sink a budget after the first couple of months. Here are a few critical points for every consumer to consider.

Budgeting for an emergency fund

Setting aside money for something that may never happen seems pointless to some consumers, but following the Boy Scout motto “be prepared” is a wise course of action. Certified Financial Planner Peggy Cabaniss of HC Financial Advisors suggests that having six months of living expenses (not gross income) socked away is a good idea, writes Banknote. Until that goal is reached, building the emergency fund should be a priority. Try having money transferred directly from your paycheck into an interest-bearing vehicle like a short-term bond, says Cabaniss. Don’t leave it in your checking account.

Saving for something big

After your emergency fund is complete, it’s time to start saving up for the big stuff. Whether it’s a vacation, car or down payment on a house, making a budget is necessary for big expenses. Separating the monthly allotment before it hits the checking account will help keep you disciplined. However, it is important to be realistic with your savings goals when planning for a big purchase. Don’t try to save more than you can handle by cutting essential expenses.

Remember recurring expenses

Make a mental checklist of all regular and semi-regular expenses, says CPA and CFA Barry Picker of accounting firm Picker & Auerbach.

“Invariably, something shows up that throws the budget into disarray,” he told Banknote.

Overestimating a personal budget is rare, but underestimating is common. Thus, review bank and credit card statements from the past year to see what you actually tend to spend in any one category. Using personal accounting software like Quicken or Microsoft Money can make this task easier. Common trouble areas when making a budget include utilities, lunch expenses, snacks, cell phone bills, insurance, auto repairs and clothing. If you’re buying clothes for young children, using resale outlets can free up a great deal of room in the budget.

Plan for the birthdays and holidays

Resorting to credit cards during gift-giving seasons is easy, but the financially smart consumer budgets cash ahead of time in order to save a great deal in the long run. Vice President of Public Relations Gail Cunningham from the National Foundation for Credit Counseling advises that consumers look at what they spent for Christmas and divide it by 10. That’s how much to put away each month through October.

Sources

Bankrate.com

Financial Planning

Microsoft Excel is your friend when making a budget

Hard times have made consumers more determined to negotiate and businesses more willing to make a better deal. Image: CC jazzengirly/Flickr

A positive side effect of the recession for many Americans is learning how to negotiate for better deals. Dickering on price is ingrained in many cultures, but Americans traditionally negotiate only on cars and houses. However, tough economic times have an affect on sellers as well as buyers. Businesses in home repair, car repair and even health care will forgo a few dollars to get your business.

Negotiating medical bills

When it comes to negotiating medical bills, doctors and hospitals do it all the time with insurance companies. As people lose their health insurance and are forced into lesser coverage, negotiating with patients is becoming more common. A procedure often has different rates based on whether Medicare, Medicaid or private insurance pays for it. Doctors and hospitals would much rather work with a patient than deal with a bill collector. Negotiate for a better deal directly with the doctor. Offer to pay quick cash up front. When the hospital gives a quote, make a counteroffer. It’s easy to find the going rate for medical procedures in different regions of the country online.

Negotiating auto repairs

Americans are accustomed to negotiating for a better deal with auto dealerships. So why not do the same with auto mechanics? Take a look at the auto repair estimate and ask if after market parts can be substituted for original equipment. Never give auto mechanics carte blanche. Some of the items on the estimate could be eliminated outright. Never ask questions such as “do I need a tune up” that may signal uncertainty about what repairs are required. If the car repairs aren’t an emergency, shop around for the best deal. Find an auto repair estimate database online. Always know exactly what kind of work will be done on your car before dropping it off.

Negotiating home repairs

Home repair contractors are notorious for including costly change orders that grossly inflate the original estimate. Get several bids, check references and wait until the home repair contract is signed before handing over any money. Include a budget for contingencies and unexpected problems. Each payment in the contract should rest upon a particular degree of progress made on the project. A sum equal to 15 percent of the total home repair contract should be held as a final payment that isn’t made until all the work is complete.

Sources

New York Times

Supermechanics.com

Suite 101

If you're going to spend your payroll tax holiday, and you will, make sure you do it up right. Image: CC Dan 4th/Flickr

The payroll tax holiday is giving everyone with a paycheck a 2 percent raise for the next two years. Personal finance advisers suggest using that extra money to pay down debt, but the government hopes you will spend it to stimulate the economy. If you’re like most people, you will spend it, so spend it wisely.

Get real about your payroll tax holiday

Most people don’t have the personal finance discipline to do what personal finance experts suggest with the payroll tax holiday. That fast cash will be spent as quickly as it comes in, and the economy will get a $120 billion shot in the arm. That should be good for everyone. So instead of letting your payroll tax holiday blend into your routine spending unnoticed, figure out how much extra money you’re making. Then buy something you’ve always wanted or something you really need. The Obama administration will thank you.

How much is your payroll tax holiday?

The 2 percent raise made possible by the payroll tax holiday is actually a reduction to 4.2 percent from 6.2 percent of the amount taken out of your paycheck for Social Security. If you make $40,000 a year, that adds up to an extra $800, or $66 a month. Personal finance experts will tell you to divert 2 percent of your paycheck to an additional savings account or increase the minimum monthly payment on your credit card with the highest interest rate. But the economy you depend on lies in the balance. In the spirit of national unity, why not buy yourself an $800 present?

Money to burn

Invest your payroll tax holiday in your health. A gym membership and a new pair of running shoes goes a long way toward your physical and mental well-being. Speaking of mental well-being, take your significant other out to dinner and a movie more often, or take the vacation you’ve been putting off while you’ve been waiting for the economy to turn around. Get an iPad, buy a professionally tailored suit for the first time in your life, take a cooking class, or learn how to speak Chinese. The payroll tax holiday is one of those rare moments when you have money to burn. Be sure to enjoy it.

Source

Philly.com

Before you pop the cork on the New Year, make some financial resolutions to make sure it's a good year. Image: CC geishaboy500/Flickr

Now is the time to get your personal finances in order. A new year is a good occasion for tying up loose ends on your financial checklist. Get off to a good start in 2011 by taking care of tax issues and re-evaluating your financial priorities.

What to put on your year-end financial checklist

Take financial steps in the week between Christmas and New Year’s Day that will make 2011 a better year than 2010. There are a few days left to address some critical tax issues for 2010. Charitable donations are still good for a 2010 tax deduction until Dec. 31. For another 2010 tax deduction, now is also a good time to dump depreciated stock. You can sell it and write off a loss up to $3,000. Consider converting an IRA to a Roth-IRA. You will pay tax on your Roth-IRA conversion, but if you do it by Dec. 31 you can spread the tax out until 2012. This week is also your last chance to get a free credit report in 2010 to make sure it’s accurate.

Financial resolutions for the new year

Find new ways to be thrifty. Start with credit card debt. Getting rid of credit card debt should be an even higher priority than saving money. Why? because the return you get on savings doesn’t come close to the high interest rates you’re paying on credit card debt. Pay down the expensive credit card debt first, then start saving. You’ll be able to save more. To help pay down credit card debt faster, figure out how much a habit costs and give it up. Make your own coffee or ride your bike to work. Take the money you would spend on lattes and gas and increase your monthly credit card payments.

Work together on financial goals

A lot of personal finance advisers recommend writing down your financial goals for the coming year. However, most people who do that soon forget them. In addition to writing down your financial goals, tell a member of your family or a friend you trust what your priorities will be. Ask them to hold you accountable to your promises and offer to do the same for them. Together you can both be more successful than you would going it alone.

Sources

Sacramento Bee

Wall Street Journal

Creating a monthly budget can provide a realistic outlook of how well you can reach any financial obligation. (Photo: Thinkstock)

Your credit score is affected by many factors, including missed bill payments. In fact, missed payments can hurt you more than other bad financial moves. To prevent late bill payments, plan how you will spend your money carefully by creating a personal budget.

Protect your credit score

Your credit score follows you wherever you go. It is consulted for information about what type of a credit risk you are and helps lenders decide if they should give you a loan and what interest rate you qualify for. Keeping your credit score healthy should be a key concern as you plan how you can pay bills each month and meet your financial obligations.

Pay your bills on time with a simple budget

Lenders want to see that you pay your bills and that you pay them on time. To avoid coming up short of money when bills are due, make a budget.

Use an excel spreadsheet, computer budget software or just a piece of paper. Make several columns with the first listing the name of each bill. The next columns should list the due dates and amounts owed. Break each set of bills up according to paydays. Group the ones due on or before the next payday and total them up and make sure that total is less than what you’re earning on that payday. Remember that any money left over after the bills are paid may need to be applied to larger bills due later in the month, such as mortgage and tax payments. Completing a budget that includes all the bills and paychecks you earn will quickly show how well you can meet all your bill payments each and every month.

Don’t miss payments — how a payday loan can help

If situations arise that aren’t built into my budget, I know that not paying those bills is a bad decision. Maintaining my good credit is vital to my financial health, so during times of need, I have used a payday loan from an online payday loan company to help pay bills on time. I have found the application to be fast, simple and completely secure. I’ve had up to $1,500 deposited into my account in just hours of applying. I didn’t have to fax anything, my credit was not checked and the payday loan was not reported to the credit bureaus. My credit score was not affected and since I chose to pay back the loan using a short term installment loan, I was able to stretch out the effect it had on my budget. A payday loan allowed me to pay bills on time and stick to my budget.

Need a payday loan? Start your online application HERE!

Creating a personal budget to learn how you spend your money is a good way to get the most out of a payday loan. Flickr photo.

The best way to get the most out of short term credit is to create a personal budget. Nobody wants to be on a budget. But everybody has to be on one, no matter how much money they make. When short term cash advances or payday loans become part of your financial strategy, controlling spending with a budget is the best way to make sure the money being borrowed is used in the best way.

Why create a personal budget?

Creating a personal budget involves working with all the information available about your finances. It may sound elementary, but when you decide to get a payday loan, you have to know where your money is coming from, how much you have and where it all goes. One of the biggest reasons most people avoid budgeting is that they would rather not know how they really use their money.

Budget before you borrow money

Creating a personal budget isn’t as bad as it sounds. Most of the work is front-loaded at the beginning. Once your finances are dialed in, tracking income and expenses is pretty much automatic, if you stay on top of it. CNN reports that what may seem like drudgery gets spiced up by facing the reality of foolish spending habits. It’s better to learn what they are on your own. Most of the foolish spending is pretty common and fairly easy to eliminate.

Personal budget for debt reduction

To create a personal budget, get started by making a list of all of your regular monthly expenses, including what you spend on fun things like eating out, entertainment and hobbies. It’s very important to include minimum payments toward debts, including payment in full of personal payday loans at the end of their term. About.com says don’t forget to build in money for debt reduction. Use software like Quicken or Microsoft Money to make it easier. These personal-finance programs have the built-in budget-making tools that can create your budget for you.

Settle emergencies with instant money loans

Subtract expenses from earnings to see how much you can expect to have left at the end of the month. If your personal budget comes out on the negative side, go back over each expense, look for places to make cuts, and figure out where you are willing to make sacrifices to get out of debt. After taking care of emergencies with instant money loans, debt reduction should be your first priority. Then you can start saving money to meet your financial goals, like a nice vacation, retirement investments or an emergency fund.

Live by your personal budget

All the time you spend creating a personal budget will be wasted if you don’t put your budget to work. Try to live within your budget. See how it feels. At the end of that first month, look over your spending to see if it matches up to your budget. If things are still out of whack, consider small money loans while you figure out how you can work harder to control spending. You may have to rework your personal budget to be more realistic as far as how you actually spend your money. Then, crunch the numbers again until you’ve made it right.

Personal budget tips:

Here are some money-saving tips courtesy of freefinancialadvice.net:

• Do not use credit cards. If you must, pay them in full each month
• Consolidate your credit cards and student loans at a better rate
• Refinance your mortgage or car loan at a lower rate
• Use coupons to shop–try coupons.com for free local coupons
• Occasionally buy generic, or non-name brand merchandise
• Stop smoking
• Don’t try to compare yourself to your friends and neighbors

What is Net Worth?

Let’s start by defining net worth. Simply, your net worth is all that you own minus all that you owe: the financial difference between your assets and debts. It’s the reason we all work for a living, for the hope that what we owe is actually less than what we own!

Improve your NetworthIQ

Without heaps of instant cash, improving your net worth can be a challenge. There are hundreds of tools and helpful hints to get you started (or keep you) on the right financial track. A great way to improve your net worth is to improve your NetworthIQ. NetworthIQ is a free online tool that helps you track, share and compare your net worth. NetworthIQ helps you keep track of your assets, debts and liabilities.

Make a budget

Many people have a hard time improving their net worth because they aren’t keeping track of what they are making and spending. That is why creating a budget is so important! A budget is the best place to start if you want to increase your net worth. NetworthIQ is just one of many online tools that can help you budget. Mint.com is another fantastic budgeting site.

Improve your net worth

With a way to keep track of your finances, you can start to build your net worth. Save, save, save! Improving your net worth will take time and energy, and you have to start somewhere. It is much easier if you already have a savings base, but what if your debts outweigh your assets? Or what if your net worth is zero?

Instant cash can help

One of those mountains of instant cash would come in handy if your net worth is zero or if it’s negative. But like NetworthIQ, there are other online tools that can help you work on your net worth, like online payday loans. Online payday loans are a form of instant cash,. Hard work, budgeting tools like NetworthIQ, and some instant cash will have you well on your way to increasing your net worth.

Start your instant cash loan application HERE!

Helpful Tips for Dressing up Your Unit

As a renter, you don’t have tons of options when it comes to making over the look of your apartment. You can’t tear down walls, replace appliances or change out the flooring like you would in a home that you own, but this doesn’t mean that you have to suffer along with a bland, boring unit. The following are a few easy ways to add a touch of class to your apartment, without breaking the bank:

Idea #1 – De-Clutter

It’s amazing how much clutter can creep into your home over time – whether it’s the stack of utility bills from years past that’s still sitting on your desk or the tacky candle holder you received as a gift from your well-meaning aunt. Unfortunately, all of this clutter is making your apartment look dirty and disheveled, so it’s a great place to start when it comes to budget makeover ideas.

To get started, begin in one room and go through every shelf, drawer, closet and cabinet to weed out items you don’t need any more before moving on to the next room. Start off with two major piles – one of things to keep and one of things to get rid of. Later on, you can sort this second pile into items to be thrown out, items to donate and items to give to family members or friends. Don’t be afraid to get a little strict with yourself here – chances are if you haven’t used it in the last year, you won’t use it in the next one!

Idea #2 – A New Coat of Paint

Of course, this idea needs to come with a warning – check with your landlord before you paint, as some don’t allow it or only allow certain colors. If you do have the go-ahead to paint your pad, flip through decorating magazines or turn on HGTV to find out what the in colors are right now and which ones will work best with your existing furniture and décor. Rich, deep red and gold colors are two good options, as are cool blues and greens, depending on your style preferences.

Once you have your ideal colors in mind, it’s time for a trip to the hardware store. There, a painting professional can help you pick out all of the paint and equipment you’ll need to make your apartment look new. One thing to keep in mind – the type of paint you buy should reflect the amount of wear it’ll be subjected to in the room you’re painting. If it’s a kitchen or a bathroom, be sure to buy paint with a semi-gloss finish; other rooms can be kept neat and tidy with a duller eggshell finish.

Idea #3 – Add Mirrors

Decorating with mirrors is a great strategy for small apartments, as they bounce light around the room and give the impression of a larger space. Best of all, decorating with mirrors doesn’t have to be expensive! Discount home goods stores like Ikea and Kirkland usually have mirrors on sale for $20 or less, and you only need one or two to make a big difference in your apartment.

If the mirror you buy doesn’t come with its own hanging hardware, stop by the hardware store and ask an employee there to help you pick out the right fasteners for the job. Remember, a broken mirror that’s fallen off the wall isn’t just a mess to clean up – it’s seven years of bad luck as well!

Mismatched Money Styles

It’s one of the oldest recipes for romantic comedies out there – spendthrift girl falls in love with penny-pinching boy and the two spend the rest of the movie bickering over their conflicting money management styles. In real life, though, this situation isn’t nearly as funny. A mismatch in financial personalities can lead to serious conflict – even divorce – if the parties aren’t willing to work with each other on their shared financial future.

Of course, this doesn’t mean that you’re doomed to eternal marital strife if you find yourself in this situation. With a little practice, it is possible to overcome these differences and create a healthier, happier future – at least as far as your money’s concerned. Here’s how to get started:

Lesson #1 – Practice Good Communication Skills

Unfortunately, money is one of those things that no one ever talks about, so it can be difficult to begin an open and honest dialogue with your partner about your financial situation. However, you’ve got to start somewhere, so focus on speaking in “I” phrases (for example, “I feel” rather than “You make me feel”) and listening to everything your partner shares with an open mind. Be patient with one another and respect that it might take some time to work through months – or even years – of differences.

Lesson #2 – Discuss Your Financial Goals

Instead of focusing on your differences, concentrate on the things that bring you together as a couple – your shared financial goals. For example, if you have shared credit card debt that needs to be paid off, focus your energy on eliminating the debt, instead of on what each person is or isn’t doing right. If you’re saving for the down payment on a new home, discuss the steps that each of you can take to ensure that you reach your goals together. By teaming up to strive for your common goals, you place yourselves on the same side of the argument – instead of fighting one another’s natural spending habits.

Lesson #3 – Set a Budget Together

Once you have your financial goals in mind, it’s time to lay out a concrete plan for reaching them together. The best budgets require both parties to make sacrifices and compromises, while still leaving some room for error. A plan that requires one partner to change completely to match the other – for example, a plan where the free-wheeling party is required to cut all extraneous expenditures – will only lead to resentment in the long run.

After you’ve put together your joint budget, support each other as you make progress towards your goals. And, although it can be difficult, try not to chastise each other for small mistakes – whether from the spender who falls out of line and makes an extra purchase or the saver who diverts funds away from the shared goals. Keep your final goals in mind and you’ll find that it’s easy to work together as a team – no matter how different your usual money management styles may be.

A metric, in this sense, is simply a standard of measurement or a means of measuring your progress toward achieving your financial goals. Anyone can come up with general financial goals and can create budgets to help them achieve these goals; however, there has to be a way of monitoring your progress. Without a means of determining whether or not your budgeting plan is working, or working as effectively as intended, there is no real way to recognize and correct errors or oversights. These metrics will show you if you are on track to achieve your goals within the appropriate time frame or whether you will have to adopt more stringent measures to get yourself where you want to be without resorting to fast cash loans.

Compare spending rates

Most budgeting focuses on saving money by allocating a certain number of dollars for each expense and keeping the expense within that limit. However, to effectively save money you have to know what your previous spending was for that expense and then set your target amount below that level. For example, if you determine you want to save twenty percent on your monthly electricity bill, first you have to know how much you have spent on that bill in the past. Since electricity consumption tends to vary throughout the year, simply basing your twenty percent on your last bill is not very effective. Instead you should track down how much each electricity bill was over the past year and then compare the current month to the same month the year before. Comparing your current spending rate to your past spending rate serves as an excellent metric for determining how successful your expense cutting is.

Monitor all spending carefully

Small amounts frequently add up to significant expenses over time. Little things like buying food for your pet or buying a coffee on your way to work may be costing you more than you suspect. Therefore it is important that you track absolutely all spending, not just major expenses. The easiest methods for doing this are to obtain and record receipts for all of your spending and to ensure that your check book is properly balanced. Today, most the details of most major bills (loan payments, utility and service bills, and so on) can be found through your service provider’s websites, so take the time to register yourself and regularly keep track of how much is being charged and how much you have paid. Tracking your cash flow can serve as an excellent metric to determine your current expenses and give you ideas about how you can trim these expenses.

Keep it simple, pay with cash

Budgeting and effective money management is all about carefully keeping track of your expenditures and even small amounts of money – such as fees connected to your checking or credit accounts – can significantly skew your results. In general, cash is much easier to keep track of because you take out a fixed amount and when it is gone it is readily apparent. Using checks and credit/debit cards is trickier, because many transactions result in additional fees on top of your actual purchase. Since most people have at least some degree of overdraft protection it is much easier to use more money than you actually have with checks or credit cards. Carefully tracking your cash flow, as well using tangible cash for as many expenses as you can, makes it much easier to effectively measure your spending habits because you will notice small expenses much easier.

Be sure to include all expenditures

In many cases, one person in any given household is much more serious about budgeting and tracking expenses than other members. This can lead to misleading results if other members of the household are spending money on expenses that are part of the budgeting effort. You may bring your own miscellaneous household spending down to the desired amount, but if your spouse is spending additional money on household expenses, the budget is being broken. This can be a real problem for household budgeting, like your food bill, where even small, seemingly insignificant additional spending can completely change your measurable results. So it is essential that your metrics include all the appropriate spending, not just the spending done by selected members of the household.

Analyze everything

All the metrics in the world will not help you if you do not actively use them to analyze your progress. The whole is idea of the metric is to see how well you are doing and see if there is room for improvement. This means you have to regularly analyze your results and record them. By plotting out your progress you are effectively creating a new metric, one that tracks your success or failure rate and helps you determine what more you need to do. Metrics are tools for analyzing your budgeting progress, but they are quite useless if you do not do the actual performance analysis.

Now that the recession is over, people are still having a difficult time managing. Though the market is showing some signs of stabilizing, people are still trying to get out from under the huge debt they stored up. If you are one of the millions of people who are struggling with debt survival, here are some tips on how to handle your finances.

How to handle debt

There are some things to do if you have debt. Here are the most important:

1. Budget. Get on a strict budget. This is of premiere importance when you are mired in debt. You want to know where the debt problems are and what you’ve done to create it. Write down everything you spend for a month—from your daily coffee to child care. Get specific with where your money is going down to the penny. Once you have that, then categorize your items as necessities or discretionary.
2. Plan. Have a debt plan to pay down your highest interest cards first. You want to minimize the time you are paying on them because they are costing you more in the long run. The best thing to do is write everything down and start paying one by one. Work on the highest, then the next, etc., until you work your way down to the smallest debt you have. For bigger amounts it may take a second job to help, but you’ll be thankful you made the extra effort when your credit card debt is gone.
3. Consolidation. Should you consolidate or not? We’ve all seen the commercials for consolidation. They advertise as if the one move to work with them will solve all your financial problems with one phone call. That is not true. The basics of a consolidation company are that you are taking one big loan to cover all of your existing payments. It can work if you are willing to sever your credit card payments afterwards. Also, beware of consolidation firms that ask for large upfront fees to fix your credit. You can do that yourself with some care and organized work.
4. Be honest. It’s important to do some self-analysis and find out why you got into debt in the first place. Was it due to overspending? If so, why? Is there an emotional reason you are spending so much? If you knew you didn’t have the money, what compelled you to buy anyway? You need to know what beliefs are going on in your head when it comes to spending and be willing to change them. The worst thing you can do is get on track financially, only to fall back into your old patterns of spending.
5. Collectors. If your debt gets to the point of having collectors call, you need to know what your rights as a consumer are. Debt collectors cannot harass you or abuse you. They cannot imply that you have committed a crime or imply that you will be arrested if you don’t pay a debt. You have the right to tell them to not call you at work or home.

Moving forward with debt

It’s important to understand the rules of debt and how to manage it. Understand that it is up to you whether you want to get out of debt for good. A lot of it involves taking a hard and cold look at your former actions, and then being proactive about changing them in the future.

Dating on a budget takes creativity, but it can be meaningful and fun. Just because you need a loan till payday or a little cash advance, doesn’t mean that your love life has to suffer. You can still enjoy romantic, unforgettable dates when you are tight on cash. The following are but a few examples of inexpensive, but memorable activities you and your beloved can share together.

Create a mutual bucket list

Find a relaxing environment, such as a picnic at the park or an evening in front of the fireplace and, with pen and paper in hand, create a bucket list together. A bucket list is a list of things that you want to do before your time on earth is up or, to put it more simplistically, before you kick the bucket. While most people have individual ideas in mind, it can be fun for couples to create a list of things that they want to do together before they part. This can be anything from helping each other get out of debt to taking an exotic vacation together. Let your imagination run wild and have fun with it.

A well-planned list that is then lived out is likely to leave a legacy that other couples will want to emulate. At the very least, the list will allow you to create plans of how you can best enjoy your lives together. When creating your plan, remember to select a scenic locale that you will enjoy looking back on when you recall the place where your dreams were created.

Adopt a pet together

If you’re already married or planning to be together for the rest of your lives, why not celebrate your union by adopting an orphaned pet? This is a major decision and not one to be done on a whim, so make sure that you’re ready for the shared responsibility of a pet. Also, be sure that you are financially able to afford a pet’s basic care without going into debt. If you determine that you can do so, then pick a day to browse a few animal shelters in order to find one that both of you can love for a lifetime.

An afternoon of meeting animals that have been lost, abused, abandoned or neglected, doesn’t cost a thing beyond a little time and compassion, and actually makes dating on a budget meaningful. The specific pet adoption costs are far less than buying a pet from a store or a breeder and the memory that you will create in exploring this activity together will be one that you can treasure for a lifetime.

Make a list of mutual goals and hide it in a secret place

Do you have a clear set of goals for your relationship? These goals should be things that you each want to do to help your relationship thrive and to make it better. For some people, this can mean saving money to buy a house or even something as simple as promising to never go to bed angry with each other.

Whatever your goals may be, sit down and write them down together, make a copy for each of you and then select a place where you can safely bury or hide your original copy. When you’re done dating on a budget, each year on the same date that you created the list, take it out again and see how many things you’ve managed to accomplish. Doing so creates clear guidelines on how you hope to grow your relationship and helps you revisit, renew and add to those goals every year.

Make your own memories

When you’re short on cash and dating on a budget, expensive dinners and elaborate weekend activities are out of the question. However, with a little creativity and by focusing on what’s most important, you and your beloved can still enjoy quality dates without going into debt. Try these ideas and formulate a few of your own to learn how to create romantic fun that will also create meaningful memories.

Budgeting is a lot like dieting – almost everyone has tried to do it before, but most people fail to stick with their plans in the long term. Why is this, and do these trends mean that you’ll never be able to stick to a budget yourself?

Why Budgets Fail

The truth is that most budgets fail for the same reason that most diets fail – they’re too restrictive. Telling yourself that you won’t spend a dime on coffee ever again (despite a twice-a-day Starbucks habit) is a lot like saying you’ll never eat another piece of cheesecake. Eventually, you begin to feel deprived and lose the resolve to stick with your budget.

In order to succeed with budgeting, you need to take a more balanced approach. A good budget is one that allows you to stay within your means while still allowing for the occasional splurge purchase – just like a lifetime of healthy eating will help you maintain an appropriate weight without dieting. In the following steps, we’ll look at how to set up a budget that works for you.

Step 1 – Information Gathering

It’s tough to plan a budget when you aren’t familiar with how much money is going in and out of your wallet. For this reason, most financial planners recommend that you take at least a week to write down everything you spend before attempting to create a budget. The easiest way to do this is to carry a small notebook around with you so that you can write down every purchase, from groceries and utilities to smaller sundry items, like soda or gum.

The longer you carry out this information gathering task, the more information you’ll have to use in this step of the budgeting process. If you can, try to go a whole 30 days so that you can see how your family’s spending fluctuates over a month.

Step 2 – Analyzing Your Information

With your notebook in hand, it’s time to analyze where your money goes each month. To begin, assign each expense you wrote down in your notebook to a specific category, such as “Mortgage/Rent,” “Clothing,” or “Medical Expenses.” If you’re having trouble coming up with a list of categories, do an internet search for a budget worksheet – you may even be able to find a free version you can download to your computer to organize your expenses more easily. Once every expense is assigned to a category, total the categories and determine what percentage of your total expenses come from each category.

Step 3 – Making the Tough Decisions

When you’re finished analyzing your financial information, you’ll notice one of two possible patterns – either you’re spending less than you make or you’re overspending, based on your current income.

Obviously, the more serious of the two scenarios is that you’re spending more than you’re bringing in as income. If this is the case, you need to either cut your spending or increase your earnings – relying on debt to cover your excesses isn’t a strategy that will work in these tough financial times. However, cutting your expenses may not be as difficult as you think. Reducing the number of times you eat out each month, spending less on new clothing or beauty services and reevaluating your cell phone and cable plans to be sure you aren’t paying for more minutes or channels than you use are three easy ways to trim the fat from your new budget.

Finally, don’t forget to leave a little wiggle room in your budget to accommodate the occasional fun purchase. If possible, put a few dollars from each paycheck into a separate account to be used for expenses that fall outside of your budget. And give yourself a break – you may stumble occasionally, but with continued diligence, you will eventually meet your financial goals.

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(Photo from sensibleabode, Flickr.com)

In a perfect world, we’d all have enormous bank accounts with endless funds for home renovations. Unfortunately, most of us are struggling enough to make ends meet without worrying about putting the money we’d like to into our homes. However, improving the appearance of your kitchen cabinets doesn’t have to be expensive. Check out the following tricks that’ll have your cabinets looking like new for under $20, leaving you with extra cash in your pocket.

A simple scrubbing

One of the easiest ways to improve the look of your kitchen is simply by cleaning the doors of your cupboards. If that sounds too good to be true, hold on – don’t knock it until you try it! Kitchen cabinets take a beating in everyday life, whether from spills and splatters or frequent opening and closing. Dirt and grime can build up slowly, so you don’t even notice them getting dingy over time. A simple cleaning (according to the manufacturer’s instructions) will have them looking like new in no time at all.

Replace your hardware

Another “Don’t judge it until you try it” kitchen upgrade solution is to simply replace all of the hardware on your cabinets, including the handles, drawer pulls, and hinges (if they show). If they’re more than five years old, chances are they’re dating your kitchen, so pull them all off and start fresh. Today’s modern looks include sleek styling and brushed metal finishes; most hardware stores will have a good selection on hand for you to choose from.

When you head into the hardware store, remember to take your old hardware with you to help gauge the sizes you’ll need, as well as the location of the screw holes on your cabinets. The easiest way to swap out your hardware is to purchase new fixtures that are as similar in size and shape as possible to your old ones, although this isn’t your only option. If you’re dead set on new fixtures that don’t line up with the old holes, you may be able to fill the holes with putty, refinish the cabinet door, and then re-drill the screw holes. It’s a little bit more work, but it may be worth it depending on the look you’re going for.

Refinish your cabinet doors

Another low-cost kitchen upgrade option is to refinish your cabinet doors instead of completely replacing them. This is a more involved, “hands-on” option, so be prepared to roll up your sleeves and get dirty. If your cabinets are painted or stained, you’ll need to sand the finish off and wipe them down before refinishing them with your chosen paint or stain. Be sure to get all of the traces of old finish off the doors, otherwise the new finish will end up streaked.

Of course, refinishing cabinet doors isn’t an option for all cabinets – some synthetic cabinet doors simply can’t be redone this way. If you aren’t sure, take a trip to your local home improvement store. A professional there can help you determine whether or not your cabinets can be refinished and, if so, what tools you’ll need for the job.

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Budget travel tips are a great way to break away from the mundane and enjoy a vacation without having to borrow money in order to have a little fun. Besides, enjoying leisurely activities during one’s off days helps to relieve stress and increase productivity. Although a cash advance or a payday loan can also help relieve stress, few things compare to a good old fashioned vacation.

Some of the best budget travel tips include:

Off Season Travel

Consider traveling during periods considered to be off season in order to get better rates on hotels and sightseeing activities. For instance, in the Caribbean, hurricane season begins in May and ends towards late September. As fears of being caught in a disaster zone keep people away from the Caribbean at these times, those who venture into these parts anyway find that they are able to pay a fraction of what they normally would for room accommodations and activities. Further research may also reveal that severe hurricanes have been few and far between in certain areas. This is a “travel at your own risk” tip, but many do so and find that they have a blast without breaking the bank.

Get off the beaten path

Consider traveling to rural areas in Canada and the United States, which are beautiful and may cost far less than more active tourist destinations. Since these areas are generally targeted by fewer vacationers, their rates for hotel stays tend to also be far less than one would ordinarily pay for a comparable vacation elsewhere. This is, by far, one of the best budget travel tips for those in need of a quality vacation.

Check out early

When it is time to return home from vacation, if an early morning flight is booked, consider checking out of a hotel the day before to save money. For instance, if a flight is scheduled for the wee hours of the morning, there is really no need to pay for an extra night at a hotel. Considering that airport security on domestic travel requests travelers to check-in two hours before the flight takes off, this means that one needs to arrive at the airport sometimes before dawn breaks. In calculating the time it takes to wake up, dress, check out of the hotel, travel to the airport and return a rental car, some find themselves getting up at two or three in the morning to prepare. By now, the lack of a need for a hotel room should be apparent. Since it’s the last day of vacation anyway, budget travel tips like this one suggest that people check out the day before they leave, store their luggage somewhere and find something fun to do until it is time to go to the airport. Of course, for travelers with children, this budget travel tip may not be the best.

Travel the old fashioned way

Consider traveling by train or bus. Often these options offer very affordable travel prices along with unforgettable scenic routes. As budget travel tips go, it doesn’t get much better than this. In today’s busy world, people often want to get to their destination in a hurry, but patient travelers are smart enough to consider the cost efficiency of old-fashioned rail or bus travel, as well as are appreciative of an inexpensive way to experience a breathtaking countryside.

A new outlook

Just because you’re short on cash and sometimes need a little loan till payday, doesn’t mean that you can’t enjoy life on a budget. Once people learn to do so, even when they no longer need help from a payday loan or cash advance, they discover that saving money by spending less is easy to do and most adopt it as a permanent lifestyle choice. These budget travel tips, when used wisely, are proof that it doesn’t take a whole lot of money to have a ton of fun.

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Everyone is in search of emergency money. No one wants to get caught with a sudden hospital, automobile or appliance bill and have no way to pay for the expense. In today’s precarious financial climate, it’s crucial for everyone to find a way to bulk up their emergency funds. The best way to find extra money is to budget. It’s a great way to see where a consumer stands financially and see what he or she has to do to improve their situation. Budgets are useful tools that can be created with intricate software or a simple notebook.

Despite the necessity of a budget

Despite their importance, there are still some consumers making mistakes with them. Here are the top mistakes people make with their budgets.

1.) No budget. There is still a fraction of the population that doesn’t budget at all. Keeping track of monthly income and expenses can give a consumer a clear picture of how well, or not so well, money is working for them. For example, if a budget shows that a consumer is spending hundreds on clothing and dining in a month, that’s not a good use of cash. It would be better to scale back and fuel that money into either savings or investments.

2.) Lack of math skill. Too many people fall back on a lack of math skill as their reason to not have a budget. In today’s technological age, though, there is no reason to not have a budget. Software, from Microsoft’s Money to Quicken to lesser-known brands, can do the work of organizing a budget. All the user has to do is input their spending and income. The software does the rest. For those who want a very basic budget, a notebook and pen can do the trick, too. The only skill needed is consistency.

3.) Job security. There is also a growing number of consumers who believe that if their job is secure, they can count on money coming in and don’t need to budget. Whether a consumer is working for a huge corporation or a mom-and-pop business, they are at risk. The economy is very unstable and has been for over 12 months now. Though the recession is over, having a good emergency money fund was crucial to the survival of many Americans who were laid off unexpectedly. Employers are still holding back when it comes to raises, hiring and offering benefits and no one knows how long it will take for them to return to old ways of operating.

4.) Unemployment benefits are there. The reality of government-sponsored unemployment is that it is not completely reliable. If an employee leaves their job or gets fired, unemployment most likely won’t be approved. Plus, with the recession bringing the unemployment rate up to well-over 10%, the number of benefits going out is quickly draining the government-sponsored benefit plan.

5.) Not my job. No one anticipates tragedy like losing a job or an unmanageable emergency expense, but they do happen. The only way to mitigate them is to be prepared the best way possible, and that includes having a good working budget that is up to date. It also should be working for a consumer’s specific financial situation.

A difficult look at finances

In the end, a budget can save consumers from financial disaster. For anyone looking to bulk up their emergency money fund, it’s crucial to look at revenue and expenses and then make wise decisions based on the financial position. Much of saving can be done automatically due to banks setting up auto-transfers and shouldn’t be a task to remember. It may seem difficult to look at finances with a fine-toothed comb, but it is critical if liquid assets are to be built.

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Consumers everywhere are looking to increase emergency money funds. In the recession, many people were surprised by the performance of their credit resources. For too long people believed that credit would be there for them in times of trial. Unfortunately, during the recession of 2008/2009, credit lenders fell short of their reputation. When things were the worst on consumers, credit card companies went into their own damage control. They increased interest rates, tacked on fees and slashed limits to mitigate their own losses, but did so at the expense of the consumer. Having learned a good lesson, consumers realized that the old mantra “Cash is King” is a phrase to live by.

So how do consumers start storing up emergency money in a depressed economy that’s just starting to recover? One of the biggest expenses every week is the food budget. For people looking to really start saving, it’s the target area to start with.

Eating at restaurants

Everyone likes to eat at their favorite restaurant. For many Americans, it’s almost a ritual of the week to finish a Friday with a meal at a local pizzeria, steak house, or Mexican food diner. The thing about eating in restaurants is that consumers can expect to pay three, four and even five times more than it would cost them to make a comparable meal at home. The only way to cut down on cost is to buy fast-food, but the problem there is health. Most lower-priced fast food is stocked full of calories, fat, sodium, and cholesterol.

The best thing to do when it comes to going to restaurants is to find coupons or specials, and to cut back. Instead of going to restaurants every week, consumers should go once every two weeks. Using “two for one” specials or going on off-nights can also save money.

Bulk retailers

There is a reason why big-box bulk retailers have grown exponentially in popularity over the years. They offer savings to consumers who have space to store 48-packs of paper towels. Places like Sam’s Club and Costco can save on grocery bills by cutting back prices drastically. The best thing to do with budgeting is to pay close attention to what items cost the most and then see if buying in bulk can bring savings. That savings can better serve consumers by shoring up an emergency money fund or increasing an investment account.

Pay for food with cash

There is a huge lesson to be learned by the recession: Credit costs. It may be convenient and quick, but there is a price for everything. Interest rates can eat away at savings and specials, and if customers don’t pay off their debt immediately, hefty interest rates make the cost of buying on credit even worse. A recent study showed that before the recession about 63% of grocery store shoppers bought items on credit, and only about 40% of that group paid their cards in full at the end of the month. Post-recession, only 37% of consumers are buying food on credit and close to 70% are paying the debt off in full.

It seems that the recession did get through to millions of consumers. They understand the cost of credit and how to manage. Leslie Feinstein, writer for Economy.com, said, “Food, low-cost clothing and everyday expenses shouldn’t require a credit card to manage. Credit is for big-ticket items that would take a big chunk of savings. That is when they are convenient; other times they end up just costing.”

The difficult economy

Finding emergency money is not always easy or quick, but it is still necessary. Looking at grocery buying habits is one of the best ways to increase savings. Cutting back on going to restaurants, buying in bulk, and paying with cash are all tricks experts use to save money. Every consumer needs to do the same, or at minimum cut back, in today’s difficult economy.

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