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Budgeting

A Handy Budgeting Tool From Kiplinger.com

If one of your New Year’s Resolutions for 2010 is to create a budget and stick to it, I found a nifty tool that you might find helpful.  Kiplinger.com has a budgeting tool that will help you get started.  It lists several possible expenditures that your family may incur, and it has the function to do the math for you, so you will know in an instant how successful you were at sticking within your budget.

Don’t be discouraged if at first you find it difficult to determine how much should be allocated to each expense.  It will take time to figure out what is practical and reasonable.  It will also take some time to get used to having to stick within a set budget, but you can do it.  Believe me, it’s worth it if you don’t want to squander all of your money.

I especially like the fact that this tool also accounts for your savings budget, containing fields for an emergency fund, a vacation fund, etc.  The tool was created for Americans as one of the fields is labeled Retirement/401(k), nevertheless this tool can be used by anyone, and Canadians can put their RRSP savings into this field.

If you don’t already follow a budget, I want to encourage you to set one up for 2010.  This tool will help you to get started.  Click this link to check out the budgeting tool.

January 18, 2010
Budgeting

Create Some Financial New Year’s Resolutions for 2010

Now that 2010 has come upon us, I think it’s important to make a few New Year’s Resolutions.  When it comes to finances, it’s always important to set goals and to stick with them.  I want to share with you my three main Financial New Year’s Resolutions for 2010 in hopes that they will encourage you to set your own goals for this New Year.

Resolution #1:  Stick within our grocery budget.  I often tend to overspend on groceries and I have discovered that little extras here and there tend to add up quite quickly.  I vow to be more careful in 2010 and am bound and determined to stick within my grocery budget.

Resolution #2:  Since my husband and I plan to do some extensive traveling in the near future, we want to save as much money as possible this year in every way possible.  I also plan on working some overtime in the hopes of building up our travel fund even quicker.  I find it is much easier to save when we have an exciting use for the money.  It is quite boring to save otherwise.  So, yes, my second resolution is to save, save, and save some more!

Resolution #3:  I vow to do more homework on learning how to be more tax efficient with our money.  I will do more number crunching to determine how much is worth contributing to our RRSPs and how much should be set aside elsewhere to supplement our retirement income.  I also want to do further research on the home renovation tax credit to see if we can take advantage of this program before it’s too late.

For other financial resolutions ideas for 2010, check out globeinvestor.com’s article on the subject at this link.

January 6, 2010
Budgeting

Why Have Fun On A Budget

why have fun on a budgetMost people, when they are on a budget, believe that pain and suffering is the result of being on a budget. That is so far from the truth. The pain and suffering is due to the fact that you don’t live by your budget and the money problems start coming.

We all know that you can only live so long if you are spending more money each month than your income. You can live on your credit cards or other personal loans for so long until they finally catch up with you. Then you not only not have the extra money you have been spending each month, but now you have to start paying back what you have already spent.

So, living on a budget is a smart thing to do. We should all agree to that by now. But why should you have fun while on a budget? If you don’t build some fun into your budget, you will not live on it very long. Without recreation and excitement in our lives, we will start to crave something to do or something to buy or somewhere to go, and that usually involves spending money we don’t have. Someone will invite you out to dinner, or you really feel you deserve a vacation, or that new entertainment system is just the thing you need right now. You look at yourself and how much work you have been doing and talk yourself into spending that money because you deserve it.

Well, there goes the budget. You fell right back into the same rut that you were trying to get out of when you started your budget. Then the guilt falls on you and you just give up trying.

Don’t let this happen to you. Build some fun money into your budget to take the edge off of your desires. Even if you have to scrape by on another category, you need to have some money for fun. It will do you and your family a great service. And, don’t feel guilty about it either, you do deserve some extra things in your life, just make sure you plan for them in advance.

You will be glad you did when the end of the month comes and you have stayed on your budget. Just remind yourself that things will get better when the old debts are paid off and you can start enjoying the extra money you have worked so hard to get.

 

December 21, 2009
Budgeting

Prioritizing Your Bills

when going through tough times, pay the most important bills firstMany times when we experience a drop in income, it is difficult to know what bills to pay first. You must know which bills are essential to your survival and which are not. There are basically three categories of bills: essential, nonessential and borderline. The biggest mistake you can make when going through financial difficulties is to pay the creditor who is yelling the loudest first. It is important to prioritize your bills when allocating how much money you have to work with. Whether you are having problems paying your bills or not this will help you take control.

The first step in prioritizing your bills is to know exactly how much income you have and how much you are spending per month. Keep a journal of all your expenditures. This includes the trip to the ATM machines, your gourmet coffee drinks, and the trips to the fast food restaurant. Write down every penny you spend for thirty days. You will be surprised at how much you can cut back and apply to your debt. Once you see where your excess spending is going, begin adding the extra money to your bills.

Essential bills are defined as survival and should be paid first. Mortgage or rent payments, utility bills, and food are included in the essential category. The next would be mandatory insurance such as car insurance. Medical needs could also be put into this category. Child support and any loans such as automobiles, furniture, and so forth that are secured or used as collateral to obtain the loans should be included with the essential bills.

Nonessential bills are debts in which no immediate consequences could occur if paid late. They are unsecured and include credit and charge cards, attorney, medical and accounting bills, and newspaper and magazine subscriptions. These should be paid after all the essential bills are paid.

Borderline bills can fall into either essential or nonessential categories. You are the only one who can determine which one. Borderline bills may include such things as life insurance, private schools, child daycare, health clubs, gyms, country clubs, clothing or court judgments. When reviewing your borderline bills you must move them over to either the essential or nonessential category.

By prioritizing your bills in the order of what should be paid first, you will begin to get in the habit of making sure your essentials are always paid first before running into a money shortage.

About the Author

Deborah McNaughton is an author and credit expert. She is founder of Financial Victory Institute, which specializes in financial education. Deborah has programs to train individuals to become credit consultants and teach financial seminars.

November 21, 2009
Budgeting

Never Give Up – You Can Develop Effective Money Management Skills

never give up - you can take charge of your financesAlthough you may have failed at managing your money wisely in the past, it’s never too late to start to develop good habits.  Whenever you begin to feel it’s a losing battle or that there is just no way you can make ends meet let alone save for your retirement, think of WD-40.

For those of you who have never heard of it, WD-40 is a spray designed to repel water and prevent corrosion. It’s creator, Norm Larsen, invented WD-40 in 1953 after 40 attempts!  That means he failed 39 times before finally getting it right!  He was persistent.  If he had given up, the world would never have been able to benefit from such a product.  In the same way, you cannot afford to give up on developing good money management skills.  Giving up is not the answer.

There are many ways you can improve your money habits.  You can meet with a financial planner at your local financial institution and they can crunch some numbers and help you to create feasible goals for yourself.  You can create a budget and stick to it, and you can also read books and Internet articles that will give you ideas on how to save money and invest it wisely.

Although it will take discipline now and mean that you will be making some sacrifices in the present, you will reap the benefits in the future.  The sooner you start getting your finances in order, the better off you will be.

November 11, 2009