Weekly Money Challenge…

I have to be honest, I did not come up with this nor did I create this awesome chart. I saw it floating around in Facebook world and thought I’d share it here. I’m not sure where it originated but the concept is EXCELLENT. It’s kind of how I started saving. I didn’t do it exactly this way but maybe I should have.

As you can see from the chart, you start off small. That’s how it always start….SMALL!

52 Week Money Challenge

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recuperating from holiday “gift giving” debt..

With the holiday’s behind us, reality sets in. You’ve over spent-now what!?

I’m just going to get right into it. Let’s be honest for a minute….REALLLLY HONEST. The gifts that you bought your friends, relatives, co-workers, etc, was it to “impress” someone? Was it because if you bought a gift for them that you could ACTUALLY afford, you were afraid they would judge you? Did you want to continue the facade that you are “doing well” and could afford to buy that for them? If you answered yes, you were guilted into buying a gift..maybe not by them, but by the voice inside your head. I think it’s important to recognize that so that you can recognize it when it happens again. I love that we SAY it’s not about the gifts, it’s just about the “time we spend together”, it’s not about the gifts, “it’s the thought that counts”….and yet, our bank account tells us differently.

Ok, so now what? You’ve spent it, it’s gone..let’s more forward. What can you do to get back on track?

1. Assess the damage: gather up all of your receipts, credit card statements, etc. and get real with where you stand.

2. Cut back: I know this isn’t what you want to hear. But just like when you need to lose some holiday pounds (totallllly guilty), you  need to cut back in some area.  You’ll notice I use dieting as a comparison to getting financial fit.   It takes discipline and determination to do better, and to cut back when necessary. Some areas you can cut back on are: eating out, pizza delivery, gourmet coffees, prepackaged foods, new clothes, travel, car washes, movies, sporting events, you get the picture.

3. Create a list when you go shopping and then STICK to that list. Do you know that 60% of people’s spending are impulse buys and that the average person impulse buys around $100? Get smarter than the stores and stop grabbing that last minute stuff off the shelves while you’re standing in line to check out. You know you’ve done it!!! Pre-plan your trip, get in and get out!

4. Get off the mailing lists of your favorite stores. This is a hard pill to swallow…..but it’s all about temptation. I mentioned in a previous post that learning to be content with what you already have is a HUGE factor into helping you get out of debt. Imagine being content with what you have and then BAM your inbox has a sale for 75% off of <insert want> and you think “OMG, that’s a great deal, I can’t pass it up!” and before you know it, the card is out and you’re even further in debt. You didn’t really NEEED it, but it was a great deal.

5. Use those gift cards you got from over the holidays. We all get some form of a gift card and a large amount of people never redeem them. But be careful, hold on to them until you NEED something and then instead of buying them on credit, use your gift card. If it’s for a store you will never shop or a card you know you’ll never use, there are sites that you can exchange them such as Plastic Jungle. https://www.plasticjungle.com

6.Think ahead to next year and start with this year-create a holiday budget. Start stashing money away here and there so that when Christmas rolls around, you have CASH to pay for the gifts you want to buy. Then get real with what you can actually afford, don’t try to impress people with gifts you can’t afford,  and set a budget for each person…..because remember, it’s not about the gifts, it’s about “spending time with the people you love”.

you don’t have to be perfect….

You don’t have to be perfect, you just have to get started!

That saying….prompted me to start this blog. I always wanted to have a personal finance blog to share the little golden nuggets I’ve learned along the way, but I always thought it needed to be perfect right out of the gate. The truth is, this is pretty bare bones at the moment, nothing fancy, but I decided to put myself out there and TRY.  The same holds true for getting your debt paid down…..you don’t have to be perfect at it..just get started.  Any little change you make in the way you think about your money is going to earn you some return on investment. Peace of mind, financial freedom, flexibility-I mean think about what life would be like if you just got that monkey off your back.

I also wanted to share this with you. In any journey (business or personal) I’ve set out to accomplish, I’ve always found myself to succeed MORE if I surrounded myself with people who will encourage me when I’m doing well, support me when I’m struggling, and hold me accountable to my own personal goals when I’m wavering.

So stop trying to be perfect and surround yourself with positive, encouraging friends.

And here’s a picture of my dog with a monkey on her back!

gracie with a monkey on her back

it feels better to…..

One of the hardest things to do when trying to “save money” and get yourself out of debt is to say NO to things you would have jumped on back when you had your old habits. That new T.V., the vacation with friends, the new boots or purse, the latest <XYZ>…you get my point.

My secret?             Learn to be content. Be content with what you ALREADY have….appreciate what you ALREADY have. You may not think you have “enough” ….but reality check-you have more “stuff” than other people around the world.

If you follow Suze Orman, she suggests that you get an 8 month emergency fund (enough money to get you thru 8 months worth of living expenses) set up so that you can have a peaceful piece of mind that if you come to any bumps in the road, you have a fund to draw from instead of going further into debt on your credit card. But don’t let that overwhelm you, having ANY money in an emergency fund is better than having NEGATIVE money in your emergency fund.  Until you have your “stash” saved up, do this…….If you get the urge to go out and buy something (a want)-go home and wait two days. Then when you finally come to your senses and realize that you don’t really need it and that it was just a want, take the money you WOULD HAVE SPENT and put it in your savings account. It would have been gone anyways right?

And then remember this after you see the money start to build up……..

If feels better knowing you COULD HAVE  it but you choose to say no…… than it does to WISH you could have it but can’t because you didn’t have the money. In other words, it feels better knowing that I COULD buy a brand new car if I wanted to because I could go get a loan than it does to be told NO by the bank because I can’t get a loan. Do you see the difference? It’s what helps me say NO more often and helps me watch my savings account beef up.

a guideline to setting up your budget…

This one is going to be long….I apologize ahead of time….

I’ve had several emails from friends asking for some sort of guideline to help them set up a new monthly budget..and with the New Year officially here, getting financial fit is on the top of  a lot of people’s priority list-at least for now! But only the elite will stand strong after a few months…..it’s kind of like when everyone heads to the store to purchase their new treadmill and then several months later you see a whole bunch of them for sale on Craig’s list….haha!!

Below is a general guideline to help you to break up your budget into 12 categories. Keep in mind, it’s JUST a general guideline but if you follow this, you’ll get yourself started on a financial fit 2013.

A few notes before we begin:
-round up to the nearest dollar when estimating your line items within the categories
-figure out what your yearly net income (your income AFTER taxes) is and then divide that by 12. That will give you your monthly income to base the recommended  % from.

The 12 Categories:

1. Housing: this category should add up to be no more than 38% of your net/spendable monthly pay. This category includes things such as:
-mortgage/rent payment
-property + school taxes
-home owners/renter insurance
-ALL utilities:

  • electric
  • gas
  • water
  • cell phone
  • land line phone
  • trash
  • sewage
  • internet
  • cable/satellite
  • maintenance/repair
  • etc, etc.

2. Food: this category should add up to be no more than 10-15% of your net/spendable monthly pay. This category includes things such as:
-groceries but NOT eating out-that’s for another category

3. Auto:  this category should add up to be no more than 10-15% of your net/spendable monthly pay. This category includes things such as:
-car payments
-auto insurance
-gas
-oil changes/regular maintenance
-depreciation allowances

4. Insurance: this category should add up to be no more than 5% of your net/spendable monthly pay. This category includes things such as:
-heath insurance

  • dental
  • medical
  • eye care

-life insurance
-disability

5. Debts: this category should add up to be no more than 5% of your net/spendable monthly pay. This category includes things such as:
-credit cards
-bank loans (not mortgage)
-student loans
-personal loans (from friends and family)

6. Entertainment: this category should add up to be no more than 5-7 % of your net/spendable monthly pay. This category includes things such as:
-this is a very broad category, it’s basically anything you do for fun or relaxation

  • vacation
  • club dues
  • movie tickets
  • music
  • computer games
  • restaurant meals
  • baby sitting costs
  • etc.

7. Clothing: this category should add up to be no more than 5-6% of your net/spendable monthly pay. This category includes things such as:
-work clothes
-casual clothes
-workout clothes
-school clothes
-shoes
-underwear/bras (I know, I know, but you got to account for them)
-seasonal clothing
-coats
-purses

8. Savings: this category should add up to be no more than 5% of your net/spendable monthly pay. This category includes things such as:
-save, save, save
-max out this category if you can *wink wink*

9. Medical Insurance Deductibles: this category should add up to be no more than 4-5% of your net/spendable monthly pay. This category includes things such as:
-these are the unpredictable and most insurances have you meant a deductible before picking up the rest of the tab..so plan for the unexpected!

10. Miscellaneous: this category should add up to be no more than 4-5% of your net/spendable pay. This category includes things such as:
-junk drawer of your budget, where you put things that won’t fit anywhere else

  • Christmas gifts
  • anniversary gifts
  • dry cleaning
  • hair cuts, mainicures
  • magazine subscriptions
  • etc, etc.

11. Investments: this category should add up to be no more than 8-13% of your net/spendable monthly pay. This category includes things such as:
-any money left over at the end of each month can be funneled into this category-when possible.

12: School/Childcare: this category should add up to be no more than 5-10% of your net/spendable monthly pay. This category includes things such as:
-college tuition
-private school tuition
-child care

So there you have it. I know it was LONGGGG, but it’s a guideline to get you started. If you’re over the recommended percentage in any of the categories..chances are that you need to make some adjustments because you can’t afford to continue going the route your going. Put on your sweat bands, hike up your yoga pants and get financial fit! Say it with me now, “I’m a Pony, I’m a Pony!!”  <insert Richard Simons music> tee he he!

 

trimming your budget..

I get asked the question all the time: how do I stick to my budget? And I think that some people want to me come up with some space age new theory on how money will come out of the sky to bulk up the money you have to spend. The truth is…..if you need more money in your budget, you have to spend less. Yes, that’s right…I know it’s not what you wanted to hear, but it’s the truth. You’re going to have to cut spending SOMEWHERE.

If you aren’t willing/able to go out and find more employment ( a second job ) then you must spend less. It sounds so harsh and is obviously easier said than done because if it was so easy, no one would be in debt. There are small ways to trim your budget…..but some of them you might not like to hear. It really just depends on how bad you want it. Trust me, I’m no saint, hell, if loosing weight was easier said that done, I’d be skinny already-so I know it’s hard, I do…….but the honest truth is no one can do it but you…just like no one can exercise FOR me-I have to get off my butt myself!

Ways To Trim Your Budget:

  •  Housing: downsize or more to a smaller more affordable home. I know this sucks to hear but it may be the only way.
  •  Homeowners Insurance: trim the fat from your policy by contacting three different companies and asking them to give you the best rates for your insurance coverage and then ask to raise your deductibles which will help cut some of the costs. The difference in deductible costs you would pay if you ever had to file a claim would more than likely be offset by the amount you have saved from paying the lower premiums year after year.

    Take another look at your utilities:

  • Telephone bill-shop around for the best rates.
  • Electricity bill-keep your thermostat at 68-70 degrees, close all the vents in the unused rooms, change out the light bulbs to energy efficient bulbs and last longer
  • Water bill- don’t do half loads of laundry, turn off the water when you’re brushing your teeth or washing your hands
  • Food bill- use coupons, watch the store sales and special offers, price match when possible of the bigger ticket prices, plan your meals in advance without a plan you’ll wing it and end up spending more money, never trust the electric scanner, don’t go to the store when you’re hungry, bring a calculator to keep track of your total, cut back on the paper products you use, avoid prepared foods, buy generic or store brands, buy your food in the bulk when possible, stay out of convenience stores, leave your children at home when you shop. (just so you know…I suck at this part like WHOAH!)
  • Auto: do NOT buy a new car, the cheapest car to drive is the one your already driving, pay cash for your car when possible, when negotiating the price of the car, don’t include your old car as a trade it, sell it out right you’ll make more money. Know what price you want to pay BEFORE you go to the dealer and be willing to walk away if you don’t get it. Keeping the car you currently have in good condition is a great way to cut your budget on future repairs. Maintain your own vehicle.
  • Debt: cut up the cards, burn them, bury them. Force yourself to use checks or cash.
  • Entertainment: plan vacations on off peak seasons.
  • Clothing: buy items that are on sale, don’t get caught up with the “name brands”, buy seasonal clothing during off season, don’t buy dry cleaning fabrics, shop at factory outlets when possible, shop at consignment shops.
  • Medical: make preventative maintenance an priority, try generic drugs.

Those are just a few thing you could do…I’m sure you’re hamster wheels are already spinning and you’re just so pumped to get started <insert sarcasm>!! We’ll discuss what percentage should go into what category within your budget tomorrow! 🙂

you’re trapped..

Do you realize that as American citizens, we are among the “freest” people in the world. People have fought and died for us to have that very freedom. So what would you say if I told you………..it doesn’t matter because you’re trapped. *gasp* I know what you’re thinking…what is she talking about?

Let this sink in….we are taught how to be taught. We go thru school with the goal of graduating with good grades. THEN….we GET THE PRIVILEGE to go into student loan debt to obtain our college career.  Then when you’ve used your privilege to go to college, racked up a bunch of student loan debt (and credit card debt) you are given a piece of paper which in some ways represents security. A promise for job security…..and we all know how this pans out!

Your life is a script. In some ways it’s already written for us. We are the American Dream right?!  We are supposed to work really hard so that you can buy lots of stuff. It’s the normal script. Go to college, come out with debt, buy a house, go into debt, want that expensive purse or boots (why not yo’re’ going to get a good job so that you can afford it-someday)…you get the idea. It’s the American Dream…to own expensive STUFF so that we can show our friends and family-or people we don’t even know how well we’re doing.

Sure debt has been around for hundreds if not thousands of years-but we have perfected it. Don’t have the money-no problem, put it on your credit card, take out a loan, you can just work harder to pay for the stuff.  That would work of course if we all LOVED our jobs, we wouldn’t mind working HARDER to pay for the stuff…but the sad fact is that a very large majority of the population hates their job. So they’re working harder, longer in a job they hate so that they can pay for debts…have you ever wandered why we’re over worked and stressed?

It’s exactly why the storage companies have made so much money. We buy storage space so that we can put our stuff there so that we have room to go purchase more stuff!  So in a sense…we aren’t really FREE. We’re trapped…… by the script….and stuff.

Write your own script……..