Archive for March 2006

Money Tips

  • Negotiate with service providers on major purchases (like a crown at the dentist or a surgical procedure at the doctor). The world is full of service providers – get a deal!
  • If you have kids and a spouse, get good level term life insurance!!! You can get good quotes at Zander.
  • Budget for a vacation and put your spending money in an envelope (or a set of envelopes). This will guarantee that you will not exceed your budget.
  • When planning a large expenditure, let friends, co-workers, and family know what you are saving for. Many times, they will be able to locate that exact item in a slightly used state for 25% of the price of new.
  • Use Microsoft Money to track your money. It allows you to see exactly where you are spending money and generates some cool reports to help you think about your options.
  • Use Microsoft Excel to develop your monthly budget. It takes out all of the calculator/pencil erasing time and allows you to focus on the actual expenses/income part of the budget. It also prevents you from getting pencil erasor all over your clothes!
  • Keep copies of your monthly budgets. After doing 12 months worth of monthly budgeting, you will be able to pull up your previous year’s budget for the same month and ensure you are not forgetting an upcoming expense. Plus, it is just plain fun to see the progress you have been making!
  • Plant a garden. It is a great time for family to work together to create something that will yield excellent food dividends! That saves money! Check out this web site to buy some seeds if you want. I love Burpee.
  • Sell some junk out of your garage or basement. You don’t use it anyway. So what if you used to use it. Get rid of it and turn it into something cool – like a paid-off credit card that has been shredded.
  • Review your spending habits in detail at least once per year. Where could you tighten up the budget? Where do you need to start spending more money? What could you do to take your personal finances to the next level? Do this with your spouse!
  • Teach your children about money! Do this through paying them commissions for completing chores. Show them the mutual fund you have set up for their college tuition. Have them send half of their birthday money to the mutual fund so they truly understand that their money is working for them so they can achieve something far in the future (or maybe next year if you have a high school senior!)

I hope this helps out some. I would love to hear some more tips if you have some.

Budgeting Tips

I have some budgeting tips that have worked for me. If you have any additional ones, I would love to learn them!

1. Use a computer spreadsheet if at all possible (Excel, Quattro Pro, etc.). This takes the math out of the calculations. If you remember something that needs included in the budget, you don’t have to erase everything you have written and redo all the math. This allows you to focus on the budget items instead of items like, “You punched that into the calculator wrong …”
2. Do the budget monthly! Every month presents its own budgeting issues. In the summer, you may be more focused on budgeting outdoor activities. In the winter, you may be more focused on paying for Christmas gifts and preparing for tax season. Irregular expenses also crop up – clothes for the children, quarterly insurance payments, quarterly tax payments for the self-employed, life insurance, school pictures
3. Work like crazy to fully-fund your emergency fund with 3 – 6 months worth of expenses. If you have this fully-funded emergency fund in place, then you can cease budgeting week-to-week. For those of you who are balancing paychecks and which bill is paid with whose paycheck in which week, you KNOW what I am talking about. Once you have the fully funded emergency fund, you can just sit down and write out all the checks at once! Talk about eliminating stress!
4. If you have upcoming expenses that you know are coming, start budgeting for them now. It is so much easier to plan for a $500 expense over the course of 6 months than in 1 or 2 months.
5. Every 6 months or so, hold a little longer budget session (
6. Keep copies of all of your old budgets. Once you have been budgeting for 13 months, you can always reference the budgets from that month in the previous year(s). That will really help you remember some of the irregular expenses you may need to be planning for.
7. Ensure that BOTH of you are messing with the budget. This is not a one-person show. It will not work nearly as well if only one person puts the budget together.
8. If the budget is not balancing this month, put it away for a day or two. Then, agree to get back together to review what the issues were. It may be that a simple solution is available and the wait may help you figure that out.
9. Use envelopes. It eliminates debit card transactions. My debit card transactions went down over 75% when we converted to cash envelopes. It also holds you accountable to the budget and absolutely prevents overspending. If you were to try one envelope, I would recommend “groceries”.
10. If the budget does not balance to zero, do not allow yourself to turn to debt to fix the issue. There has to be a point in time that you say “enough is enough – we have gotten poor results the old way, we are not going back there”. You will be tested on this one. How strong is your willpower to ensure you achieve freedom from debt?
11. If you have an irregular income, you should still do a budget. The lame excuse of “I can’t predict my income” does not work here. You can plan for the known part of your income and prioritize the rest of the expenses in order from 1 to 350 (if you have 350 expenses!). When you get income in, you pay down the list in order of your priorities. Once you are out of money, the end. Maybe next month.
12. While you are saving cash for a major purchase, the rigor of saving every single month for that purchase makes you focus on that item more. I have found that I can find AWESOME bargains when I have to spend 7 or 8 months saving for a purchase. Many times the bargain is 1/2 or 1/4 of the cost I had saved for the purchase. Talk about celebrating! This is budgeting working at its finest!

Those are a few of the things I have learned while budgeting. I welcome your tips!

BOO to the non-savers. Down with you!

From USA Today last week: $575 – On average, U.S. households overspent their incomes by that much in January!!! Below the main headline is a line that states The negative savings rate worries some. WOW! It worries some?????? My goodness, what is it going to take to wake up???? What we are doing is NOT WORKING!

Americans are stupid about money. We will spend money to buy Snow White and her 7 dwarfs figurines for our yard (I know someone who did this!), but not even save a single dollar!

If you can’t save any money, something is dreadfully wrong! Your priorities are out of order. What are you doing with your money that is more important than saving it? Don’t start that with that old line of crap like “I am paying for food and utilities.” For most people, this is a minor part of your income. Let’s see what is NOT a minor part … a brand new car(s), a new computer, a fine meal, a trip to Hawaii, a ski trip, new furniture, an addition to your house, a new big screen TV, a new Harley, fine clothes from the mall, a new digital camera, a new tractor, a new four-wheeler, a new barn, a new whatever …

These expenses that you pay on every month – were they needs? Really? You are really going to need to do some serious convincing to get me to believe that these are needs. Is it worth being broke? Is it?

Get real! Get angry! Do something about it! Become debt-free and save money! You can then buy what you want with CASH, give more money away than you ever dreamed, and save even more for the future.

Go make something happen. Take your finances by the proverbial ears and yell “THIS IS NOT WORKING!!!”

Need help? E-mail me with your questions.

You can do one or the other.

I’m so in debt. It is so hard for me to get out of debt. My husband is not on board with it. It is not possible for me to get out of debt. I have spent too long living on nothing so I am going to start living now even though I have to get it with debt. I deserve it. Our situation is really unique, and that is why we are in debt. We are going to get out of debt soon. I can’t get out of debt without borrowing money. I need money to make money, that is why I have debt. Debt isn’t so bad. If I can use someone else’s money, why wouldn’t I do that? If I can borrow the money at zero interest, it is like having free money.

Excuses. Lousy excuses. Here’s the deal. You can either whine about debt or spend money, but you can’t do both! For those of you taking “advantage” of such “deals”, I ask you Dr. Phil’s question: “How’s that working for you?” You are carrying debt. You are sending a lot of your paycheck out to pay creditors. If you were laid off tomorrow, how long could you make the payments? Are you happy with the answer?

When you have debt, it comes bundled with stress! When you stop using “deals” to your “advantage” and realize that the “deal” is that you are being taken “advantage” of, that is the moment of truth in which you truly realize that debt is dumb.