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Budgeting

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
General

Lower Your Standard Of Living and LIVE

lower your standard of living and LIVEAre you one of those people who have been suckered into the concept of endless consuming? It can happen without your even realizing it. Ads hit you from every direction telling what you need to buy to be good-looking and successful. The “right” list usually includes the right car, the right neighborhood, the right clothes, even the right schools for your kids. Have you ever noticed that the list is endless? And there’s those “easy” payments, so why not?

In our society consumerism has almost become a religion with heaven being that blessed day when we can relax because we have it all and are, therefore, OK. I suggest that you think again and on your own this time.

Those who have maxed out credit cards only to obtain new ones know that something is missing in the plan to “have it all”. Peace, freedom, even individuality are often sacrificed to the need to keep up and hopefully surpass the norm. Working longer hours, getting more competitive jobs, pushing and stretching are ways to try to win the battle. But then there’s that bigger house and hotter car, offering a rush, momentarily.

There is a way out but it involves reassessing priorities. It’s usually a long, slow process to over-extend to the point of disaster. Likewise, there’s a way out that can slowly take you in the opposite direction. It’s called…less. Believe it or not, most of us can live quite comfortably in a smaller home and used, paid for, cars can get us where we want to go. Plain foods don’t cost what prepared foods do, and a smaller, simpler wardrobe can still be attractive.

My kid’s father was a carpenter. That meant lots of work in the late spring, summer and early fall. The other six months were pretty “iffy”. Bad weather often prevailed, housing starts and sales slowed down and our income either stopped or was drastically reduced. The answer to this was to set up a standard of living that used half of the good-weather income and left the other half for the lean months. We did that and sailed blissfully through the tough times.

The same thing can be done when retiring. Moving into a park model trailer in a camping club might sound like a sacrifice. However, once you have looked inside a new unit and toured a well-appointed park, you may change your mind. Hot tubs, indoor swimming pools, senior centers are all part of the camping club I belong to.

Why not rethink how your life is playing out and factor in some peace and satisfaction? Why not lower your standard of living and LIVE! Why not indeed?

About the Author

Luise Volta’s life has included careers in nursing, teaching pre-school, interior design, Real Estate sales, insurance adjusting, and dairy herd testing.

December 19, 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