Search results matching tag 'budgeting'

Re: HELP!

Edey — Sun, 08 Nov 2009 15:46:20 GMT

Precise record keeping will go a long way in helping you stay within a budget. That means recording all receipts, all expenditures, even cash. Doing this will give you a clear picture of where your money is going, and where you can make adjustments on those expenditures. If you can work with a computer program, it will be quicker, but if not, good old paper and pen, and using columnar paper for bookkeeping will work too.

At the beginning of each pay period, write down what you expect will come out of that paycheck, basing it on past expenses and total it up. Keep that money aside, either just on paper (meaning the money is actually in the checking account), or phyically put the cash into envelopes. If it is just on paper, then keep that list handy so that if you think you will spend money on something - look at what you have left of your paycheck and make a judgement if you can spend that money now. Remember to also plan in emergency expenses.

To get things turned around, you have to spend a few months (or a few years) telling yourself you don't have the money to buy things unless you absolutely need it. Eventually being strict with yourself this way you will come out on the other side better and be more financially secure than when you started, and you will have learned the experience of truely wise money management. It is very much worth it. Edey

I fell off the no credit wagon....

Anne Cross — Tue, 22 Sep 2009 21:37:00 GMT

...but am climbing back on. Well, I've been trying to accomplish a couple of goals in these last few months -- one was not to incur any more consumer debt, and the other was to get some stuff fixed around my house. It turns out that I over did it on the latter, leading me to fail at the former.

I had a flurry of stuff fixed at my house: new storm windows, patching holes in my soffit, sealed some flaking stone on my stoop, got a new garbage disposal, and some burnt out outlets rewired. Nothing especially glamorous, but things that have improved my quality of life. I knew how much money I had, but I kept thinking I'd get a little extra somewhere.... turns out that was not a good way to think. Not only did I not get a little "extra" I also am earning about $20,000 less this semester than I thought I would.

So I took out a cash advance on my credit card for living expenses, since I blew through savings for all that house stuff. Then I had to get my car fixed for $500, and I charged it. So I'm really not in the place financially that I expected to be right now, but I'm very grateful that I have enough money to live FRUGALLY through the end of the year. I'm going to use my unexpected free time to work on a writing project (that I hope to sell one day), and to try to drum up more business for the new year.

It's disappointing, because that other money would have really put me in a great place financially, but I'm really really grateful that I have enough to get by for a while. I learned a good lesson about not counting my chickens before they're hatched...

Pay My Bills

Gary — Tue, 18 Aug 2009 18:24:00 GMT

Dear Dollar Stretcher,

I really struggle with the discipline aspect of saving money. I have heard of companies who put your money in a trust, pay the bills and give you an allowance to live on. Do you or any of your readers know anything about how these companies work or if anyone has had any bad experiences with these?

Mary

Mary has a problem that's probably more common than we care to admit. She has trouble controlling her spending. And, to her credit, she wants to regain control.

But, I don't recommend that she use a firm to pay her bills. Three reasons why I don't.

First, not all of these firms are legitimate and responsible. Signing up with the wrong company could have disastrous effects. Not only could you lose your money, but your credit rating could be destroyed.

Secondly, why should Mary want to pay someone to do what she can do herself? These firms will work with her to create a budget. Once she has a budget made they'll collect her paycheck and allocate it to her various monthly bills and give her an allowance for incidentals.

She can do that herself. You can find all kinds of budget worksheets by doing a web search for 'making a budget' or look for info here.

She can set up a special checking account to be used for routine bills, like the electric bill. That account will only be used to pay those specific bills. In fact, if she can set it up for online payment and not even have any paper checks, that would be best. Less temptation.

Individual debit cards can be used for things like her groceries and food shopping. One for each category. For instance, she can add the amount that she has allocated for food each pay period to her food debit card. When she's grocery shopping she uses that debit card. Since she can only spend what's on the card, she's effectively stopped when the money is gone.

She'll probably have some incidental expenses that aren't easily put on a debit card. She can set aside a certain amount of cash to cover those expenses each pay period. Again, when the cash is gone the spending must stop.

Anything beyond that goes towards an emergency fund or long-term savings.

Mary may find that her income doesn't cover her expenses. That means that she must reduce her spending or increase her income.

She doesn't say, but past debts might be part of the problem. If she has a large amount (typically $10,000 or more) of credit card debt, she might want to check out a reputable credit counseling agency. She'll want to find a credit counselling agency that's a member of one of the two associations: Association of Independent Consumer Credit Counseling <aiccca.org> or National Foundation for Credit Counseling <nfcc.org>

The third reason that I don't recommend these firms might be the most important. Hiring someone only deals with the symptoms. Unless Mary addresses the root cause of her spending problems she will always struggle with spending issues. That will be true no matter who has control of Mary's charge cards and checkbook.

Mary needs to understand why she's spending money. Often people who have problems controlling their spending are trying to fill emotional needs. For instance they may feel loved or powerful when they buy something. What they're buying is only important to them as it relates to fulfilling that psychological need.

There are a number of clues that could identify that she has that problem. One is if her head says "stop" and she buys anyway. Another is if she feels out of control when she's shopping or enjoys a shopping 'rush'. Perhaps she feels remorse after a purchase or hides her purchases from her spouse.

If Mary has that problem it's good for her to be responsible for paying her bills. Being closer to her financial transactions could help her understand her buying motives. As she pays her bills a good question would be "why did I buy this?"

Mary may find that she can't figure out what's triggering her actions. In that case she'll need to seek out a counselor who can help her work through the emotions.

In any case, Mary should be proud of herself. She's identified a problem and has taken the first step to solving it.

Keep on Stretching those Dollars!

Gary

No more dining out!

Anne Cross — Thu, 13 Aug 2009 21:50:00 GMT

I like to make pronouncements. It's easier for me to adopt or give up something altogether, rather than piecemeal. So my latest pronouncement is this: I'm not going out to eat anymore, unless I'm away from home and can't prepare something myself.

I'm a vegetarian, so my dining out options are limited. I'm also a really good cook (well, I like my own cooking better than restaurant cooking). I like to cook, I really really enjoy it. And lastly -- why should I spend $7.00 for a salad, when I can make a better one for about $1.50?

My final meal out cost me $20.00 - for an order of french fries (not very good and kind of burnt), an ear of corn on the cob (mediocre), a blah salad, and a really good dessert, plus tip. I would rather use that sawbuck for something special, so I was glad my farewell meal was only fair.

Now the challenge will be declining firmly but politely when friends invite me to go out to eat with them (not an everyday occurance, mind you, but once a month or so I probably get a local invitation to eat out). I love to entertain and will gladly host a big dinner party, but will hope I can get away with just saying "no thanks" to invites to meals away from home....

Do other people refuse to eat out on economic grounds?

How to make $75 fast, and the realization that comes with it

Anne Cross — Sun, 19 Jul 2009 22:09:00 GMT

I came across an advertisement recently from Bank of America: open a checking account with them with a minimum depoist of $500, make at least one debit transaction within 30 days of opening the account, and they'll deposit $75.00 into the account, or mail you a check if the account is closed. This is a much better interest rate than I'm getting in my passbook savings or online savings accounts, so I'm going to sign up for it.

I'm so pleased to be in a position to be able to do this -- to have $500 that I can actually live without for a month, and to be able to compare savings rates from separate savings accounts. This is not a position in which I have found myself for quite some time. I lived hand to mouth, paycheck to paycheck (with credit card support between paychecks) for years and years. But in the past 18 months or so, I've really turned my financial life around (with help from tips on Dollar Stretcher and the Dave Ramsey method). But my budgeting and persistance have paid off. Sticking with a weekly spending budget and putting whatever was left over (be it $1.00 or $20.00) into savings has made me feel so much more secure. Gary is doing a poll on what financial independence means, and while I'm nowhere near financially independent (for me, it means paying off my mortgage and student loans and having $20,000 in the bank -- something that is in the future, but not the near future), I am starting to taste it, and I know how much more peace I will fell when it eventually happens.

And that $75 will go straight back into savings to help me reach my own goals of financial independence.

What I'm doing differently

Anne Cross — Tue, 19 May 2009 11:11:00 GMT

There have been so many stories in the news, on blogs -- everyhwere -- about what people are doing differently in the midst of this "economic downturn," and lots of speculation about what habits will last and what will disappear once the economy recovers.

I started living within my means over a year ago, and made many of the changes talked about in the news. I cancelled my cable, got rid of the Internet at home, went to cheap-o telephone service, cancelled my beloved artisan bottled water delivery, put all my electronics on power strips, and eventually paid off my credit cards (such a good feeling with all the news about increased fees for good customers). These are (I hope, I hope, I hope) life habits that I will always maintain.

But I'm still looking for ways to stretch my dollars. I'm going to greatly expand my vegetable garden this summer (we had frost last night, so I won't be planting until after Memorial Day, just like all the old Yankees advise) and do itas much by swapping as possible. I have set myself a $20 limit for plants this season. I'm sewing more to mend things that I might have turned into rags before (mostly pillowcases and socks).The home-made cleaning and health and beauty products are a huge savings, and I continue to research recipes for things I can make myself. I always look for free first, second hand next, and buying new as a last resort.

And I'm using coupons more. There aren't usually that many coupons I can use, but there are usually a few (some weeks go by with nothing in the Sunday paper for me), and when there's a coupon for batteries or toilet paper or some other common staple, I make sure to cut it out and file it in my little coupon file. The grocery stores around here have started putting triple coupon or $1.00 double coupon promotions on, so I make use of those and am building up a stock of those products. Plus, eggs and frozen pizzas sometimes appear in coupons. And I'm looking on manufacturers web sites for coupons for items I use. And I NEVER use a coupon for something I wouldn't have bought anyway unless it is free.

Lastly, I've started entering sweepstakes. I'm sure more and more people are joining me, so the odds are poor, but somebody's got to win, right? I always check my receipts for sweepstakes opportunities (CVS, Home Depot), and enter online. Parade magazine and Cooking Pleasures magazine also have ongoing sweepstakes, where you can log in every day and enter. It takes less than five minutes a day, and I could really put either a paring knife or $50,000 to good use.

I wonder what other frugalistas are doing differently in the "downturn"?

Insurance or savings account for my new cat?

Anne Cross — Fri, 01 May 2009 17:15:00 GMT

My beloved cat of 16 years died last fall, and I (and my dog) missed her terribly, so I decided to get a new cat from my local animal shelter. The dog's not so thrilled yet, but I know she'll come around.

The cat, Jerome, is healthy and happy. I brought him in to the vet yesterday. I asked the vet about pet health insurance, since all of my pets have had costly medical problems, and I thought insurance might be a good thing to get while Jerome is still young and healthy. The vet said it's a personal choice -- she suggests that people put a little money away into a savings plan for the pet for emergencies, but if that's hard to do, then insurance can be a good option. My dog's emergencies have run into the thousands of dollars, so I think the insurance might be a better bet for me.

I'm looking at different plans -- there are a lot of options out there -- and wondered if any of you folks in the Dollar Stretcher community had any thoughts -- especially from those of you who've gotten medical insurance for your own pets.

April Shopping and Cooking

Brandy — Sun, 05 Apr 2009 15:59:36 GMT

Were you able to stick to your buget in March? What is your spending and shopping goals for April?

Keep us posted on how you do and share your tips for staying on track as well!

Homemade Bread

missapril_piano — Thu, 05 Mar 2009 15:37:52 GMT

I've found a simple recipe for homemade bread. It's a cool rise, wet dough recipe. I found it on Mother Earth News. They market it as 5min a day bread. NOT!!!! BUT, it is easy! lol....

You make the dough, then it can keep in your fridge for up to 2 weeks. I had to make mine in a very large plastic bowl this first time, but will try to make it in my pampered chef glass mixing bowl (the one with a handle, spout, and lid). I think it will fit! (I hope) I have a large fridge, but I still don't want to dedicate that much fridge space to bread.

Basically the recipe is 6-3-3-13. Which means 6 c. water, 3TBSP active dry yeast, 3TBSP non-iodinized salt (like sea salt), 13 cups all-purpose flour. Simple and cheap, huh? Notes: you gotta use warm water, only mix until ingredients have been combined--no kneading, let rise for 2 hrs before putting into the fridge. On baking day, pull off the amount you want to use (they recommend a 1lb portion), shape into a ball, let rise for 30min, slice a pretty something on the top (cross, scallop, etc), then pop in a 425 degree oven for 45min with a pan of water on the shelf below. They also recommend using a baking stone and pizza peel, dusting the loast with cornmeal on the bottom. Well, I don't have a stone, pizza peal, and have declined to use the cornmeal dusting on the bottom & have still gotten great results! I just put a lil parchment paper on the pan I'm using.

I have really enjoyed having warm, crusty, fabulous bread whenever. It's been non-labor intensive (even though it takes more than 5min when you make it), and CHEAP! A great dollar stretcher!

To see the original article with lots more info & ideas, go here.

A year of thrift

Anne Cross — Sat, 14 Feb 2009 12:10:00 GMT

It was in February of 2008 that I decided to change my relationship with money. I was sick of living week to week, always being scrambling to pay bills, being in debt and being generally stressed over money. I bartered with a life coach for a couple of sessions, but quickly realized I didn't need someone else to tell me what to do. I knew what I needed to do! I was always listening to shows about personal finance and debt, I had gone through the Dave Ramsey thing (and paid off a bunch of debt, yet there it was again, creeping up on me) -- I knew what I needed to do, and I finally decided to just do it.

I put myself on a weekly budget of $200.00 which I took out in cash each Friday. This was to cover human food, pet food, gas for the car, and any shopping (clothes, household goods, books, etc.) and entertainment (coffee, meals out, movies) for me for one week. Anything left over would go into savings. I went back on to the snowball model to pay off my credit cards, and a few months earlier had started an IRA which had a monthly debit from my checking account (so I couldn't skip paying it).

One year in, I am in much better shape. I have paid off all my "little" credit card debts (Care Credit -- which provided much-needed funding for a pet operation and Sleepy's -- for a new bed), which eliminated a couple thousand dollars of debt and freed up a few hundred each month for other expenses. I started saving for the first time since I was a teenager. I usually had something left over from my $200 allowance and even if it was $1.00, I put that money into my passbook savings each week. I have depleted it a couple of times (once to fix a collapsed celing in my house, twice for my weekly allowance), but hey, it was savings, not debt! And then I've gone back to putting money into it and have continued my savings habit.I just completed a mortgage re-finance which also rolled in a large credit card (around $9500), and a home equity loan.This monthly payment will be less than what I had been paying (due to the great interest rate) and will eliminate two additional bills from my life.

I cancelled non-essential expenses. I got rid of cable tv (which was only costing me $6.00 per month, but I decided was non-essential), and a few months ago cancellled my spring water delivery (which was $40 per month, but was delicious mineral water and supported a local business). And I downsized my home telephone service to something that is local-only, per-call rate and is very inexpensive.

I buy almost everything used. Clothing, household products, books (if not simply borrowed from the library), etc. When I can't buy it used, I TRY to buy it from the source, especially for food. I buy my milk and eggs directly from a dairy, and get as much produce straight from farmers (besides what I can grow myself).

What has fundamentally happened is that I've changed my thinking. I used to operate in scarcity/fear mode, but now I feel like I'm in abundance/security mode. I have plenty of stuff (in fact, I got rid of a lot of stuff over the winter), I make big batches of food and freeze some, so I know I have plenty of food, I have enough money to make ends meet; I pay my utility bills as soon as they arrive so I don't worry about paying them; I live in a city with lots of free entertainment and I'm a block from the library; I have plenty of ways to keep busy, and as I pay down my mortgage (which is now, apart from my blasted student loans my only debt), I will eventually own my home and be even more secure.

I love doing what I can by myself -- soap and cleaning things, food, mending clothes and sheets, fixing clocks, resuing things -- it helps with the feelings of security and independence, but it's nice to be part of a community (like this one) where other people are likeminded and trying to reduce their consumption. I feel much less wasteful, too. I used to be proud of how much I recycled each week. Now I'm happy to see how little is in my recycling bin, since it means I'm consuming that much less.

While anything is possible, I am pretty confident that the changes I've made are lasting ones. My outlook on life has changed so fundamentally and completely that I don't think I will ever go back to my old ways of profligate spending. I used to feel a reward sensation when I bought something, but now I feel that same sensation when I put money into the bank. I like going to the thrift store and walking out empty-handed because I know that I don't need a single thing there.

It has been an interesting journey so far. I can't wait to see what February 2010 looks like!