Personal Budget Training

Winning Words of Wisdom

The grand prize winner was announced for USAA's Winning Words of Wisdom.

Bettina Amrein won a $5,000 gift certificate for a cruise and a USAA Financial Planning Services Retirement Plan for her words of wisdom out of over 3,000 submissions.

"As a 20-year-old bride, I was disappointed by his refusal to spend freely. As a 30-year-old wife and mother, I accepted his discipline. As a 40-year-old working woman, I questioned his stubbornness. As a 50-year-old professional, I challenged is resolve. As a 60-year-old widow, I'm incredibly grateful for my husband's insistence to save."

Her advice is to spend smartly, accumulate and compound, vow to stick with your savings plan and envision your retirement goals.

Truly, this cannot be accomplished without a personal budget training of some sort and living within your means.

Labels: Budget, retirement, Will

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Scoring Your Financial Wellness

What is your Personal Financial Wellness Score?

I came across this handy Personal Financial Wellness Test from the Personal Finance Employee Education Foundation, Inc. (PFEEF), which is a not-for-profit organization that serves the public interest for non-commercial purposes. They educate employers on the bottom-line benefits of workplace financial education that improves financial literacy and personal financial behaviors.

Many people realize they have some financial behaviors that need changing. To succeed they must believe that they can successfully modify those behaviors, and they must have a plan to change. PFEEF believes that employers can help by giving employees easy access to quality financial programs. The result is that employees make informed decisions among their benefit choices that are best for them, take actions to enhance their current financial lives, and wisely save and invest for a financially successful retirement.

Not to mention having some sound personal budget training is one step to scoring high on the Personal Financial Wellness Score.

Labels: Budget, financial planning, personal finance

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15 Signs You Need To Be On A Budget

This was originally 15 signs that you need credit counseling from Bankrate.com, but why put a band aid on a bigger problem?

With proper personal budget training, you could get rid of these 15 negative activities:

*Your credit card balances are rising while your income is decreasing.
*You are only making the minimum payments on your cards, if that.
*You are juggling bills.
*You have more credit cards than your wallet can hold.
*You are at the limit on each of your credit cards.
*You consistently charge more each month than you make in payments.
*You are working overtime to keep up with your credit card payments.
*You do not know how much you owe and really do not want to find out.
*You have received calls or letters about delinquent bill payments.
*You are using your credit card to buy necessities like food or gasoline.
*You use credit cards because you have no cash.
*You are dipping into savings or your IRA to pay your monthly bills.
*You are hiding the true cost of your purchases from your spouse.
*You are applying for every credit card that sends you an unsolicited offer.
*You do not have a secure job or have an inconsistent income.

Labels: Budget, Credit Cards

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Housing Prices

How much should afford as opposed to how much can you afford?

With great mortgage rates and a plethora of foreclosures, it's almost too good to pass up on this deal. The possibility of getting your dream home may have some people in over their heads, so how much should you afford?

In a perfect world: Whatever house you can pay cash.

Realistic: If you have to, finance on a 15 yr fixed mortgage where the payment (PITI) is no more than 25% of your take home income. The monthly payment, including principle and interest, taxes, insurance, and association fees if necessary, should not be more than 25% of your take home pay on a 15 year fixed interest rate mortgage.

Example: If you make $100K a year, which would be around $75K after taxes, or $6,250 a month. So 25% of that is 1560.

Also, you should consider the size of the house that fits into your budget. How much of a house do you really need?

Labels: Budget, Mortgages

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Cutting The Credit Ties

It was time to break their bad plastic habits.

In this CNN article, it featured ten families who got rid of their credit cards and started living within their means. One family even credited Dave Ramsey for their turn around. The author of Zen Habbits blog is even featured since he reduced $30K credit card debt and is living debt free. Personal budget training is essential and all of these families operate on a budget and live within their means.

Labels: Budget, Credit Cards, Dave Ramsey

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What is a Sinking Fund?

Have you ever heard of a sinking fund? It is a common term in our personal budget training.

A sinking fund is a fictional place where you store your money for upcoming expenses that do not occur monthly but you know are coming up in the near future. There are two types. The first is for regular expenses that do not happen monthly, for example, homeowners insurance and property taxes. You know how much these are going to be, so you divide the total by however much longer you have before the bill is due, and you have your amount to set aside.

The second type is for things that do not occur regularly, but you know will happen. Things like car repair, clothing, gifts, or furniture replacement. These things should be a line item in your budget, but will not have a fixed amount. This is something that you will decide. Most of this kind of sinking fund can wait till after you have established an emergency fund to deal with those surprises.

Labels: Budget, emergency fund, sinking fund

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Boomers Borrowing For Everyday Expenses

Here is a recent article that appeared on Yahoo.

The economic downturn is hitting about one in 10 middle-aged and older Americans especially hard, forcing them to borrow money for living expenses and seeking assistance from family, friends or charities, according to a survey released Tuesday by the AARP.

This is just another good reason to get some personal budget training so you can changed your lifestyles to live within your means. The people in these articles appear to just complain and not do anything to change their situations. Get on a budget and you can still enjoy life.

Labels: Budget, Debt

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The Breadwinner

Kathy recently became the family breadwinner because her husband has dementia. She is scared about doing her own budget. What advice can Dave give her?

Labels: Budget, Dave Ramsey TV Show, Family Sickness

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Budget Busters

Do you have certain expenses that wreak havoc on your budget?
Here are a few:

1) Gas - even with driving to work only, it takes its toll on the budget.
2) Eating out - Those dinners add up and so do the drinks and appetizers.
3) Utilities - If you are not on a level payment plan with your local utility company, it could keep your budget predictable.
4) Gifts - Do you buy gifts for everyone you know for the weakest celebrations?
5) Compulsive buying - EBay and Amazon buyers beware, just because an item is at a great price, doesn't mean you have to buy it.

What are your budget busters?

Labels: Amazon, Budget, Ebay

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Be Fruitful And Multiply

Guess who is expecting?

We have just learned that the Duggar family, as featured on the Discovery Channel, is expecting their 18th child around New Year's Day.

The fast-growing family lives in Tontitown in Arkansas in a 7,000-square-foot home. All the children whose names start with the letter J,are home-schooled. The Duggars feed their entire brood for less than $2,000 per month. Every Duggar child learns to play both violin and piano. And best of all, the Duggars are debt free.

Labels: Budget, Debt Free, Duggar

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Trash Your TV And Save

Trash your TV and save not only your brain.

I figured that with a 12% mutual fund that you could fund for 5 years with just your cable/direct TV bill money, you would have nearly $6,000 dollars. That money could pay for many of your goals in five years time. Definitely a reason to get your utility money down and dump the one-eye monster!

What to do with your time? Take up a hobby and the best place to learn is at the library.

Oh, there is even a web site dedicated to trashing the TV.

Labels: Budget, money saving tip

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Do You Splurge?

This blog is about budgeting, erasing debt and being able to afford things in the future. So do you enjoy life today amidst all of the budgeting?

I think that even the most frugal person has one or two indulgences they allow themselves. With Dave Ramsey, he advocates for a blow fund that is regularly funded, but the expenses are not tracked. And there is nothing wrong with that. In fact, I think it is good. It is these splurges that keep us going as we save for the future. What do you splurge on and why?

My grocery bill is high, but we buy a lot of fresh ingredients for quality dishes. Just ask Jim, or anyone else who stops by and dines with my family.

Labels: Budget

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12 Tips To Finding Extra Cash

Here is a checklist of non-essential items that you may be paying for regularly. If you are really hurting for cash, consider eliminating some of these luxuries:

1. Alcohol - Are you out partying too much?
2. Beeper/Cellular Phone(s) - Can you reduce or eliminate?
3. Cable/Satellite TV - Can you reduce or eliminate?
4. Club Dues - Can you reduce or eliminate?
5. Magazine Subscriptions - How about the library?
6. Internet Service - Can you bundle with your phone service?
7. Smoking - It is only going to increase your medical bills.
8. Impulse Shopping - Practice a little self-denial.
9. Eating Out - Try cooking at home and master some dishes.
10. Long Distance Calls - How about a good old fashion letter?
11. Babysitters - Hey, all they do is eat your food.
12. Landscaper/Mowing Service - Lose weight in the process of becoming debt-free.

Consider what you spend annually on the above items. For a short-term solution, try to minimize some of these non-essentials from your lifestyle. Do this at least until out of debt and feeling a sense of relief. I realize I am making suggestions that may be cramping your style, but remember, it is only temporary.

Labels: Budget, money saving tip

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Recession-Proof Yourself

I recently came across an article by Mary Dalrymple and she had a few good points about dealing with a recession.

Do not invest your grocery money in stocks. Just because the market took a steep dive keep the steady investing up every month and plan for the long run with the dollar cost averaging. This gives you plenty of time to weather the market’s cyclical ups and downs.

Take risks that let you sleep at night. Stocks will go up, and stocks will come down. If this rule has you reaching for a sleep aid, diversify your investments to match your tolerance for risk. Dave Ramsey recommends noload mutual funds and to put 25% into each of these four types of funds: Growth, Growth & Income, Aggressive Growth and International.

If it seems too good to be true, it is. Now that the market took a dive, my inbox gets loaded with different stock advice for some real winners, especially penny stocks that offer 400% returns. Plan for the worst-case scenario. Have a fully funded emergency fund, that is 3-6 months of living expenses saved.

Let your conscience be your debt guide. If times are tight for your family, you might not need that extra pair of shoes or eating out every other night. Actually, writing out a budget and sticking to it, can show you where you money is really going.

Labels: Budget, investing, mutual fund, recession

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Are You An Impulse Buyer?

Impulse buying is defined as making an unplanned purchase, more on the lines of spontaneous. This means buying anything at the checkout when grocery shopping or buying a car on a whim.

Planning a purchase of any kind is absolutely necessary if you intend to use your money wisely. That extra pack of gum will not break your budget, but with the prices of groceries today, it does not take a lot to put a dent in your grocery budget. However, buying a car without prior planning can get very expensive. Besides the apparent things like researching for the best price and interest rate, amount of down payment, money for taxes and license, you need time to decide which car is right for you and/or your family.

Here are few tips may help prevent impulse buying:

If you see something you like, leave the store without it. Go home and look at your budget. Then if you can afford it, go back the next day after you sleep on it. In addition, this will give you time to think about whether you really need it.

Always go to the grocery store with a list. Buy just what is on your list. If you see items you would like to have, make a note to put them on your list for your next trip. And do not go hungry, you end up shopping with your stomach.

Consider the entire price of an item before buying. This includes taxes and any other accessories needed to make the product complete, including any warranties.

Planning and budgeting is dull for some of us, but when you budget your money and plan purchases, you will certainty be able to make better purchases and feel groovy about it.

Labels: Budget, buying

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Lindsay Lohan Falls Off Wagon And Is In Need Of Money?

In a video obtained by The Associated Press, it shows the recently rehabbed actress taking a swig from a champagne bottle while in Capri, Italy. Also, in another story from MSNBC , Lindsay Lohan is bumming bills from her pals. A source told Gatecrasher that the once wealthy actress is openly mooching money from her friends; even after running up $736 bar tab on the Italian island. Sounds like she has more than just financial problems to deal with at this point.

Labels: Budget, Celebrity Finances, Lindsay Lohan

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Suze Orman says to screw budgets!

From her book The Money Book for the Young, Fabulous & Broke:

"Screw budgets! Is it a good idea to take a look at where your money is going in order to figure out how to keep more of it around? Sure. But I'm not going to be pushing Budgeting 101 on you. I heard from so many people who said they wanted help with budgeting. No, you don't! Budgets are about as successful as fad diets where you lose a ton of weight at first and then gain even more back. Big surprise. Operating on denial, constant worrying, and incessant monitoring is not sustainable. The same is true with money. If you force yourself onto a strict budget, chances are you'll never be able to stick with it, and you'll end up with more debt than you started with."

If that doesn't sound crazy enough, keep in mind that she also pushes that you worship at the alter of the great FICO... oh and makes lots of money selling their stuff. As shown very clearly in the movie "Maxed Out" - She's a sell-out. Besides selling out to companies like Fair Isaac, she also sells out to the idea that self denial is bad - a modern myth that is responsible for most of our social problems today.

The title of her book is appropriate. Keep that attitude and you will stay broke!

Labels: Budget, Suze Orman

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The Grocery Budget

This was the most difficult category in my budget to get an estimate from when I first started. Grocery bills are a constant, whether for a single person, or an entire family. However, families always seem to be trying to cut costs, especially where groceries are concerned.

The best thing to do is keep track of what you buy for groceries. This is going to be a real hassle for a month or two because you will need to keep track of your grocery purchases. All of them! All you would have to do is save your grocery receipts during that time and add them up. This should give you a good idea of how much you spend on a monthly basis for food. I have seen between 5-15% and 15-20% of the take home pay for the month spent on groceries. My family grocery budget is about 28%, but we group in the small items such as cleaning supplies. Do not include going out to eat; put that in a separate category or you will never make it to the next pay day.

With all of that said, the bottom line is that you need to spend what ever it takes on groceries to survive. In too many cases people will pay their bills out of their grocery budget. That is not going to get you out of debt. Utilities, food and shelter are the basics. Put them first no matter what your bills are or how many times you get called to pay you other bills.

Labels: Budget

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Definition of Budget

Besides the dictionary version of Budget, there's the one below. While said tongue-in-cheek, it is not far from reality for the majority. Many a truth are spoken in jest!

Labels: Budget, Funny

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Pay Your Bills Online

When it comes to paying bills online, you basically have three choices:

1) You can make many payments directly through a biller's Web site by entering a credit card number or authorizing a withdrawal from your checking account.

2) You can sign up for a bank's online bill-pay service.

3) Or you can use a third-party service, many of which collect bills for you and send e-mail alerts when payments are due.

I still like to be in control of my money, so I go with using my bank's online pay service. The utilities and mortgage are on automatic withdrawal and the others I pay online through my bank. I save $2-3 in stamps right there a month and plus my bank has prepaid deposit envelopes which I can mail in deposits when I want. Just recently my bank announced it was accepting scanned checks, which makes things even faster.

So when you start paying online, all you have to do is punch in how much was paid into your budget spreadsheet and work with what is left.

Labels: Budget, Financial How-To, online payments

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How Not To Get Rid Of Credit Card Debt

I was surfing at Bankrate.com and came across advice on how to get your credit cards under control. Out of their six steps, I agree with step one, after that only one, maybe two more of them will actually take care of the credit card problem. The other three steps do not correct the problem, only gets you access to more debt!

The only steps to take are:

1. Stop using credit cards and write down all your debts except your home.
2. Arrange them smallest balance to largest.
3. While making minimum payments on the larger balances, start paying on the first debt until it is gone.
4. Keep the snowball rolling to the next debt and the next. You will start seeing the wins early with the smaller debts and actually get to see some accomplishments.

I cannot express how a budget can change your life and give you a piece of mind that you are in control of your finances.

Labels: Budget, Credit Cards, Debt

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UPDATE: Free Budget Spreadsheet - Pro-Rata form added.

I just wanted to let everyone know that I've updated our free budget spreadsheet. Besides a couple small errors that were fixed, we've also added a "Pro-Rata" form. This form makes it easy to calculate how much to pay each creditor when minimum payments cannot be made.

Download your free budget spreadsheet today!

Labels: Budget, Financial How-To, Free, Spreadsheet

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Monday, July 7, 2008

Winning Words of Wisdom

Saturday, July 5, 2008

Scoring Your Financial Wellness

Saturday, June 28, 2008

15 Signs You Need To Be On A Budget

Thursday, June 26, 2008

Housing Prices

Wednesday, June 25, 2008

Cutting The Credit Ties

Wednesday, May 28, 2008

What is a Sinking Fund?

Friday, May 23, 2008

Boomers Borrowing For Everyday Expenses

Wednesday, May 14, 2008

The Breadwinner

Monday, May 12, 2008

Budget Busters

Friday, May 9, 2008

Be Fruitful And Multiply

Tuesday, May 6, 2008

Trash Your TV And Save

Tuesday, April 22, 2008

Do You Splurge?

Monday, April 14, 2008

12 Tips To Finding Extra Cash

Thursday, February 7, 2008

Recession-Proof Yourself

Wednesday, January 23, 2008

Are You An Impulse Buyer?

Friday, January 4, 2008

Lindsay Lohan Falls Off Wagon And Is In Need Of Money?

Wednesday, January 2, 2008

Suze Orman says to screw budgets!

Tuesday, December 25, 2007

The Grocery Budget

Sunday, December 16, 2007

Definition of Budget

Wednesday, December 12, 2007

Pay Your Bills Online

Tuesday, December 11, 2007

How Not To Get Rid Of Credit Card Debt

Wednesday, November 21, 2007

UPDATE: Free Budget Spreadsheet - Pro-Rata form added.

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