Budget Planning

Get Ready for 2014 with Smart Goals

What are your goals for 2014? Let’s see if I can guess… is it one of these?

Get organized
Lose weight
Eat healthier
Exercise more
Save money
Get out of debt

Almost everyone wants something on this list. Why do we keep setting and forgetting the same goals every year if these are the basics of a healthy lifestyle? Let’s step back and talk about goals in general.

All goals should be S.M.A.R.T.

Specific
Measurable
Achievable
Reasonable
Timely.

Your goal to “Save more money” is smart, but it’s not S.M.A.R.T. With a general goal, you’ll never know how well you’re doing. “Saving more money” could mean adding an extra $1 to savings. It’s not going to do much for your budget in the long term.

But, if your goal is to “Save an extra $500 by the end of 2014”, that’s S.M.A.R.T. You have a specific amount, it’s reasonable, you can track your progress and make adjustments to reach your time limit.

Back to 2014 goals – here are some resources that I use to make my goals a reality.

A Scanner

I’ve been tackling “getting organized” as a goal for a few years now, but I’ve been using the S.M.A.R.T. method, so I organized different items each year.

In 2012, I scanned all of our medical records.

For 2013, I scanned and saved all my recipes. My grandmother and mother, being great cooks, left me lots of family recipes. Plus, I had a cookbook collection, and lots of magazine and newspaper cutouts. So far, my scanned recipes have been a big plus in my life. They’re easy to find and share, my cupboards aren’t stuffed with paper, and we were able to donate 75% of my cookbooks.

For 2014, I am scanning all the family photos, slides and movies. This is going to be a big project for me because I’ve become the archiver of family photos as relatives have passed away. I have to admit that I have started a little early with my new all in one printer / fax / scanner.

Websites I’ve used to meet my goals

TripIt.com is how I organize all of my travel plans in one place – airline confirmations, hotel and car reservations, tours etc. All the information is in one place and easy to access. It’s as simple as forwarded the email receipt to Trip It and it appears on your itinerary.

For my goal of getting healthier (making better food choices, eating at home more and fitting in exercise), I use LoseIt.com. It’s helped me with my 2013 goal of leading a balanced life and making more time for me. Part of my goal was getting to know the feeds I eat so I can make better choices. LoseIt.com helped me to keep track of my food and to stay balanced (like watching the carbs to protein ratio). The website and app lets you input a recipe and save it for future use. There is a section for exercise too.

What are your tips and resources to help you achieve your 2014 goals? We’d like to know what you do.

To really get your goals started for 2014, you can join my new Facebook group. It’s a month long class that will help you set realistic goals for the year ahead.

A Facebook Group for Your Goals

Join me for the month of January for Taking Charge of Your Finances. Many people want to have more in savings, to spend less, to pay down their debt, save for their children’s education, save for retirement, buy a home, and more. This will be your chance to connect with other like minded people, and get your New Year’s resolution off to a solid start.

completely-free

Learn more here

Financial Housework: Deciding What to Clean First

Have I ever had credit card debt? Yes! There have been times in my life when I haven’t been able pay my balance in full when the bill arrives.

Credit card debt is the enemy of a good budget, but life happens. Even the best budgeter can have unplanned expenses.

According to a recent study by Trans Union, the average US adult carries $4,878 in credit card debt. That doesn’t include zero percent balances. That means the average US adult owes almost $5,000 plus the additional interest.

If this is you, I want you to take a deep breath. Debt repayment is just financial housework. There’s nothing to be afraid of here.

Do you know what’s really scary? Having company due in 5 minutes when the bathrooms aren’t clean. When that happens, do you lock the front door and pretend you’re not home? No! You walk into the bathroom and decide which part needs to be cleaned first (just in case you run out of time before the doorbell rings).

That’s right. I just compared paying off credit card debt to scrubbing the toilet. That’s because you want to use the same thought process with your credit cards. Some cards will need more attention than others, so you need to make a list of your debts which includes the interest rate and minimum payment amounts.

There are two methods to setting priorities on your credit cards.

Option 1: Pay the highest interest rate first. Your list will look something like this:

Priority	Interest Rate	Minimum Payment	Current Balance
Card #1	19%	$100	$5,025
Card #2	15%	$47	$2,141
Card #3	11%	$177	$9,056

This is the best option if you want to save money. Using the example above, you pay as much as your budget will allow on card #1, and only the minimum on cards #2 and #3. When #1 is paid off, you make card #2 the highest priority. Rinse and repeat until all cards are paid in full. When you pay the highest interest rate first, you pay less overall.

Option 2. Pay the smallest debt first. Your list will look something like this.

Priority	Interest Rate	Minimum Payment	Current Balance
Card #1	15%	$47	$2,141
Card #2	19%	$100	$5,025
Card #3	11%	$177	$9,056

This option is good if you need to see results to stay motivated. Receiving a bill with $0 due is really satisfying. A positive emotional boost can really keep the momentum going. You can compare it to housework, dieting, or exercise. We like to see improvements.

Bottom line: You have chosen to get out of debt (your goal) and the actions that will get you there (your plan). You’ll know the best option for you and your family, and you can change tactics whenever you want as long as you’re moving forward.

Let us know which option you choose and how you are doing.

Lessons in Cheap Travel from an Expert: Me!

We just returned from an amazing trip to Northern Europe and, surprise, surprise – it didn’t break our bank account. How did we do it?

Transferable frequent flier miles

When we fly, we usually use one airline so our frequent flier miles are easy to use. But, our first destination was Copenhagen and our favorite airline doesn’t fly to Denmark. Lucky for us, the airline was in the One World Alliance so we were able to transfer our miles to another airline to receive free flights – we only paid the taxes.

We earned extra miles just by eating out and shopping

Our airline has a dinning program so you can eat out at participating restaurants to earn miles. The program is free. You just need to register your credit or debit cards. The shopping program works great for us. When we shop online, we start at their shopping website. Then use their links to access popular retailers. Between flying, eating out, and ordering online our frequent flier miles really add up.

We used our hotel points

Our flight got us in to Copenhagen a day early, so we had time to explore and meet up with a good friend. We stayed at a hotel and our lodging points covered the cost of both nights. Even better, we used extra points to upgrade to a room with access to a hospitality suite that served breakfast and late afternoon snacks.

We used timeshare points for the cruise

As some of you know, we like to take cruises. So, when we found a cruise that visited the Baltic regions of Northern Europe, we were really excited. Neither of us had been, so it was a first. We were so happy to find that we could trade our timeshare points for the cruise. All we paid were the taxes and port fees. We sailed to Tallinn, Estonia; St Petersburg, Russia; Helsinki, Finland and Stockholm, Sweden.

Yes, it took a lot of coordination and advanced planning…

But, our travel, lodging and cruise were covered – we only paid taxes (which were minimal). Of course we spent money for some of our food, entrance fees to museums, the tours themselves and souvenirs. But we saved money by walking, taking public transport, or tour transports where the only cost was the tip for the guide.

So, that’s my experience and my expert advice. You can travel without killing your budget!

That’s several more countries checked off our bucket list. Where would you like to go?

Save Money with Simple Habits

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You know how to spend less on your purchases – shop sales, use coupons, buy used, or trade with a friend. But you don’t want to, because you’ve found that it takes a lot of work and your time is valuable. I complete agree – that’s why I keep it simple.

I am not someone who buys things just because the price has been reduced. I don’t spend hours cutting coupons or scouring sales fliers. I only buy what I need, and I only check for sales and coupons in the Sunday paper.

But, I have found that simple habits have made a big difference in our expenses.

My toothpaste habit: When we need to buy toothpaste, we always look for a sale at the local grocery or drug store. Typically, we can find a standard size tube of brand name toothpaste for 99 cents on sale. Then I check the Sunday coupons and usually find a 35¢ off coupon that the store will double (if it’s the grocery store). When I’m lucky, I only pay 29¢ for toothpaste – compare that to the normal $3-4 dollar price! It’s so easy. I know what I’m looking for, where to find it and it’s there when I need it.

My hairstyling habit: I used to get my hair cut locally, but my friend was shocked at the price I was paying. She suggested I go out of town to a less expensive area to get my hair done. That alone saved me 50% of the cost. But I didn’t let it stop there. I stopped getting my hair colored at the salon, (more money saved) and then I did some research and looked at beauty schools. I can get my hair cut at a school for about $25 including tip. Yes, they’re students, but I trust them because they’re working under the eyes of a professional. In addition, I try started waiting longer between appointments. I now try for quarterly instead of every 8 weeks (4x per year instead of 6). I went from spending $1,400 a year on my hair to $100 – not bad! And I love the way my hair looks.

My library habit: I love my library! Libraries aren’t just for books. You can borrow the whole season of a popular TV show on DVDs, borrow a music CD, audio books (DVD or mp3) and books (paper or for your device). All free. We log onto the library website to research what they have and place holds (saves us time and gas). Our library has free classes, speaking events, and now it offers free passes to local tourist spots. You can borrow a pass to go to the museum for free (or discounted). I can’t say enough good things about libraries. They’re the cornerstone for reducing entertainment expenses.

My friend habit: Our friends traveled to same vacation spot that we’re visiting this summer. They were nice enough to loan us their travel books and brochures so we can benefit from their experience. Then, a friend introduced me to someone who is actually from one of the countries we are going to. She shared her “must see and do” list with us and loaned us a DVD to watch. These are perfect examples of borrowing from friends.

I wasn’t always like this. I used to overspend. I’m good with my money, but I didn’t wake up one morning as a savings convert, going full throttle after deals like a fiscal zealot. It’s all the little steps that add up to big savings. And, I add new steps when I find that they’re convenient and fit into my routine.

If this is something that interests you, you’ll need to think outside the box. Find the little savings habits that are right for you. If you can’t think of anything new to reduce, recycle or reuse to lower your expenses (and reduce your clutter), then do a little internet research or try one of one of my favorite frugality books: Amy Dacyczan’s The Complete Tightwad Gazette or Judith Levine’s Not Buying It: My Year Without Shopping. If you haven’t read Amy’s book, it’s a quick read with tons of tips Judith’s is more of a journal of her year, chronicling what she did and didn’t do.

These are just a few examples of how little habits can make a big difference. I could go on and on.

And if that isn’t enough, in the next newsletter I will discuss increasing your income.

A Note from Jill

Last month (as we do every January) we got back on track after holiday spending. We looked at our finances and made some changes. This year, we tracked our spending to see where our money was going. Not many surprises for us – that’s a good thing.

We find that when we track our spending, we think twice about those little impulse expenses: bringing lunch from home instead of eating out, planning dinner ahead versus picking up take-out. All these little things add up for us.

I encourage you to do this for 30 days. It takes less than 5 minutes a day and can be eye opening. Let me know what you find out about your spending habits. If the thought is overwhelming, my budget tracker could make things easier for you. You just enter the numbers and it adds it all up for you.

We’ve received some great name suggestions, but we’re still looking for more. Quick Tips will become something new, fresh and inspiring and we need a new name. We’d love to hear some creative new ideas.

Want to help? Submit your name suggestions to jill@jillrussofoster.com or on Facebook, LinkedIn, Twitter or here. I know you have some great ideas, so share ’em with me!

Get things done to start the year right!

There are several things I do in January to make a fresh start for myself and my family.

I take the credit cards out of my wallet and put them in my copy machine. Why do I do this? So, I’ll have up-to-date information on my cards in case my wallet is lost or stolen. If you want to do this, too, make sure to spread your cards out on the paper so you’ll have room to hand-write the contact phone numbers found on the back of the cards. This serves a few purposes:

You won’t have to go online or search past bills for contact numbers in case you need to cancel those cards in a hurry.
You will know exactly which cards you need to call on, and,
You’ll remember to take the credit cards off the copier.

I set new files for 2013. This includes my accordion multi-pocket folder for this years’ tax information. If I am organized at the start of the year, I will be all set for the accountant at year end.

I shred our paystubs when the W-2’s come in. Check to make sure they agree first!

We review last year’s bills. We really like to save money on every day expenses so we can afford the the things we really enjoy. So, we look at how we’ve spent our money in the past year to see if we can make any improvements. In the past, we have deregulated our electric, lowered our cell phone package, and cut out TV channels we don’t watch. We have made choices about what subscriptions to keep and what not to renew, keeping only the most useful magazines and memberships.

January is a month we plan our extra spending. These are the expenses that aren’t in the usual monthly budget, but are essential to our standard of living. If you want to plan your extra spending, here are some examples and tips:

What do you want to do this year for fun? We usually already have a vacation or two in mind.
What big events are taking place for your family or circle of friends? You usually know a year in advance if someone is planning a family reunion or getting married. Be sure to factor in travel costs.
What home projects do you need or want? With this past year’s weather, you may be thinking it’s time for that major improvement to your home.

If you need to spend money to have it, then it’s worth planning ahead. It’s so much easier and less stressful to have the money saved than to try to figure out where can to get the money at the last minute.

If you’re in a relationship, how do you handle finances as a couple?

Are you in a relationship? If you are, you know what it’s like to share your life with someone you love: your joys, your sorrows… and your money.

One of the biggest reasons for divorce (or breakups) is finances. I know you don’t want that to happen, so what can you do about it? Talk. Communication is the key to handling joint finances.

People have different ways of handling their finances. One person might be a saver who really values the money saved for future dreams and needs, while the other might be a spender who lives in the moment. If these two individuals become a couple, there can be disagreements about money that can escalate to divorce.

Take a minute to talk with each other about your money habits. It can be a really eye opening conversation. Really listen and try to understand the other person’s point of view. What did they learn about money growing up? What do they want right now? Where do they want to be in 1, 5, 10 years and beyond? With this understanding, you can choose a path that will work for the both of you. Meaning, the spender will save a portion and the saver will spend some money. Come up with mutual goals and agree on how you will achieve them together.

The goal is to handle your household finances and your goals in a blended way so that both people are comfortable. To do this, communication and action is key so that all feelings are heard and considered.

If you’re in a relationship, tell me how you handle your finances as a couple. Who handles the money? Who makes the budget? Who sets the goals?

Planning for 2012 Financially

I have to admit that I am a planner – I already have my 2012 calendar. Even if you prefer to live in the moment, you have to admit that some areas of your life must be planned ahead.

For example: if you are a homeowner and have your homeowner’s insurance escrowed, you can’t just switch insurance companies a week or two before the policy is set to renew. You need to make the changes ahead of time so that your mortgage servicer can send the check to the new insurance company.

Getting divorced? You might have to make alimony or child support payments. Children grown? Your alimony or child support will be ending soon. Is your employer struggling? You could see a reduction in wages, medical coverage or even be laid off.

Finances can be overwhelming. They certainly can be if you have to make many changes in a short amount of time.

I pencil noteworthy financial dates in my calendar to help me start the process early. In my case, my homeowner’s insurance policy will expire in early February. I don’t want to tackle this project during the holidays, so it’s on my calendar to do in early December.

Thinking ahead will save you the eleventh hour stress. Look at your year and pencil in the important changes you have coming in your future. By addressing these matters with time on your side, you can do more comparison shopping and make changes to save money. Get out your 2012 calendar and start planning.

WBDC CT Budget Coaching: Enroll Today

You know that I am a big believer in budgeting. Knowing where your money goes is the only way you can make changes to your spending so you can achieve your goals. For some people budgeting is a scary idea.

In today’s economy, many people are struggling with their finances. Simple short term or long term goals such as paying bills, planning for retirement or a child’s education can seem impossible when you’re worried whether you’ll still have a job in a few years. It’s critical that individuals gain an understanding of their current financial picture as well as set, and work towards, future financial goals.

I am involved with a program that can assist you with your personal finances and budgeting. This program assists with providing clarity on what is important in your life and your personal finances. We facilitate and empower you to build a budget, and a plan, that supports your needs and goals for today and your future. Through this program you will uncover more choices in managing how you think, feel, and act around money.

How to enroll

This budget coaching program is a four-month program which includes workshops and one-on-one coaching both in person and over the phone. For more information, an application, and eligibility requirements, please call me at 203-353-1750. Completed applications must be received by September 30. There is a $40 fee if accepted into the program.

Would you rather have a coupon or a raise?

Question: Which of the following is worth more?
A. $100 a month pay increase.
B. Saving $90 a month by using coupons.
C. The monthly interest earned on $100.

(The answer to our trivia question is at the bottom. But first, let’s talk about your savings account.)

Do you have an emergency credit card or an emergency savings account? Using a credit card for emergencies is like kicking yourself when you’re down. Whether you need a new roof, water removed from a basement, or car repairs, you will already be spending more than your monthly budget. You don’t want to pay interest on top of that.

In 2007, Americans on average saved 1.2% of their gross wages. In these uncertain times, it is important that you have a savings account to fall back on. Experts say that your emergency savings should be equal to a minimum of eight months of income.

Do you have that much in savings just in case? If not, here are a few suggestions to get you to save more:

Have a set amount withdrawn from your paycheck every pay period. Done automatically, you won’t even notice it is missing.
Start using cash. When you break a paper bill, save the change by putting it into a bank or other container. You will be surprised by how much this can add up to monthly.
Look at your spending habits and reduce or eliminate something. Pay yourself the reduced amount by putting it into your savings account. Some suggestions: bring your lunch to work or make your coffee / tea at home instead of buying it at the store.
Just say “no.” If it cuts into your savings plan, and it’s not a life necessity, then wait. Reward yourself after your savings account is healthy.

This should boost your savings account and give you peace of mind for whatever life sends your way.

Trivia Question Answer:
B. Saving $90 a month by using coupons.

The savings you receive by using coupons are savings with after-tax dollars. Even if you are in the lowest tax bracket of 15%, a $100 raise is only worth $85 after taxes.

Using coupons is a great way to trim expenses so you can build your emergency savings account.