Every Day Finances

Do you want to have $1,000,000 in the bank?

Here’s how

http://clark.com/personal-finance-credit/how-much-to-save-millionaire-retirement/?utm_source=Clark+Newsletter+List&utm_campaign=5cf63f016b-Clark_Daily_Newsletter&utm_medium=email&utm_term=0_afa92deb83-5cf63f016b-71463121

Time to spring clean your finances

Finances need a clean up, why not do this now for spring

https://community.barclaycardus.com/t5/Big-Print-Blog/How-to-Spring-Clean-Your-Finances/ba-p/27497?__fsk=1611322357

Your DIY Projects

It’s spring and with that we think about projects for our home each. What needs to be done for maintenance? What to we want / need to upgrade / replace? How much can we do ourselves vs. hiring out? How about doing home projects or repairs yourself.

Do you have a broken tile that needs replacing? Do you want to refinish a piece of furniture? Do you want to repair a small leak? Do you want to create a patio? Before you jump into a DIY project, take a few hours to learn a little more about your project.

It’s easier than ever today to learn how to DIY. Home improvement stores offer free classes and/or you can watch a how-to video on the internet. It’s possible to learn from the pros, or from experienced tinkerers, just by setting aside a Saturday morning.

We renovated our current home and were able to do some of it ourselves. We did the demolition: ripped up carpets and vinyl flooring; removed kitchen and bath cabinets; and broke down the plaster walls. We also did as much of the work ourselves as we thought we could handle: we rolled out and stapled the insulation; and taped and painted the inside of the house.

That may be more than you want to tackle, but our partial DIY brought our home improvement project within our budget, so we could afford professional contractors to remove a load bearing wall, install a header beam, rewire the electricity, and add a bath.

Are you ready to tackle a home project or repair? The questions you should be asking yourself are:

Do you have the time and energy needed to complete the project?
Do you know how, or could you learn the skills needed, to complete the project?
Can you afford to have the work completely hired out?

Let me know what you decided, and good luck on your project! Tell me how it turned out in the comments.

What’s More Important-Less Debt or an Emergency Fund?

The age-old question of payoff debt versus an emergency fund – which is more important?

If you have debt, then you know that the interest you are paying is a drain on your finances. You are correct, that interest is a waste of your hard-earned money. You know that you need an emergency fund and you have been meaning to start one, but you just don’t have the money.

Which should you tackle first? Let’s assume you have $500 in your budget to work with and we will look at a couple of scenarios.

#1 – You have debt totaling $10,000 and you are paying the minimum payment of $250 per month at an interest rate of 20%. It will take you 67 months (5+ years) and you will have paid back $16,750 ($6,750 in interest). That’s assuming you don’t take on more debt.

Then you put the remaining $250 to start your emergency fund.

#2 – You increase your payment on your debt to $500 per month. It will take you 25 months (just over 2 years) and you will have paid back $12,500.

You will not be starting your emergency fund until after the debt is paid. What would you do if an emergency expense happened? How would you pay for it?

As you can see, the answer is somewhere in the middle and you can think outside the box for faster results. You could look into reducing the interest rate on your debt – refinancing, balance transfer for a lower interest rate etc. The quicker you payoff the balance, the less you will pay in interest.

You need an emergency fund to be prepared for whatever happens in life. You will want to start to save something on a regular basis each and every month, even if you have debt.

Save

I Challenge You to Track Your Expenses

Have you ever written down a budget to see where your money is going? Well, we did this earlier this month and everything looks fine, meaning that we make more than we spend.

That means we can pay our bills – great! That’s check one. Check two – are we saving enough? No, we we’re not, but where do we get the money? We won’t find extra money to save until we find out exactly where our money is going.

If you want to do this process with me, follow these steps:

1. Write down a couple of short and long term goals, so you’ll be inspired to do the work.
Short term goals can be planning for a vacation, buying a car, paying down debt, saving for something that you want, and starting an emergency fund.

Long term goals can be saving to purchase a home, saving for your children’s education, retirement planning, and paying off debt/mortgage. What are yours? Imagine what you want or need and write it down now.

2. Track every penny you spend. That means finding a way to record your spending as it happens.
Don’t wait until the end of the month and use your bank statement or receipts. A single store can fall under many spending categories and receipts don’t always list items by name (or by names that you can decipher). Don’t think for a minute that your grocery store trip can be lumped under food. You may buy your pet food there, as well as cleaning supplies, shampoo, or even magazines.

I know this sounds time consuming, but it’s worth it. You can carry a pen and pad with you and write down everything by hand. Another way to track your money is by using a phone app. Choose the way that works best for your lifestyle.

3. Write your totals in a budget worksheet to see where you stand.
Once you see a month’s worth of numbers, than you can begin to analyze what is going on. With this clear picture, you can make changes – lower bills to save money, get rid of unused services, check out the competition to switch etc.

Tell me what you have discovered with this exercise. Next issue, I will tell you what we have changed.

If you would like to receive my inter active budget tracker, just sign up for my free bi-weekly newsletter here.

Save

The Importance Of Insurance

We all know we need insurance and probably have all the standard ones in place – homeowners / renters, auto, and umbrella. But it’s those special ones that are in question for us. I am referring to travel, car rental, pet, extended warranties, home warranties and more. We think we don’t need them, but do we?

We just booked a vacation and we have the option to add travel insurance for a reasonable fee. Do we do it? Is it a waste of money? Fortunately, we don’t have to make this choice for a few months. In the meantime, I wanted to share with you my initial research.

	Reasons you might need the coverage	Reasons you might NOT need the coverage
Travel / Trip Insurance	Non-refundable vacations You are taking an expensive vacation with lots of opportunities for losses Your health insurance will not cover you where you are going (anything from a doctor’s visit to medical airlift)	Your credit card that you booked your vacation with gives you the insurance coverage you need If your travel plans are refundable / changeable without or a minimal penalty You can financially afford the cost / loss
Car Rental	If you don’t own a car and therefore don’t have auto insurance If you are going to a location that your car insurance will not provide you the coverage	If you have this coverage on your current auto policy and it extends to your rental car
Pet	If you are the type of person that would do anything for your pet, regardless of the cost	If you can afford to pay for the services
Extended Warranties	If you want peace of mind knowing that your electronic device is covered If you are a person that tends to lose, break or damage things	If your budget can handle the cost of replacement on short notice
Home / Car / Appliance Warranties	If you want peace of mind knowing that you are covered	If the cost of the insurance is more than the cost to replace / repair If your budget can handle the cost of replacement with short notice

As you can see, I have suggested many things for us and you to think about before you make your own choices. Let me know any thoughts I have omitted and what helped you decide.

Save

What To Do When Money Is Tight

There are times in our lives that we are not able to pay all our bills. Maybe we have lost a job, had a medical illness or other life circumstance. Not being able to pay your bills is one more stresser added to the mix.

I will give you my advice, but please know that you should check with your professionals for what is best for you and your situation before taking any action.

There are several types of bills categories we have:

Utility Bills – You may have noticed that these typically don’t appear on your credit. Yes, you are correct. When your utilities are paid on time, they don’t appear on your credit report. When you are late, most utility company will report the delinquent payment information to the credit reporting agencies. Or even worse, they may send the account for collection and that will appear on your report.

Credit Cards – This is a double-sided question. You want to be able to have credit in case you need it but you can’t afford to pay the credit card. The best possible option when you can’t afford to pay your bills, is to be able to pay the minimum amount due on all your credit cards each and every month. If not, then you want to contact your credit card companies to work out an agreement. You don’t want your credit card companies to send your account to collections and/or small claims court. Both these options will negatively affect your credit.

Non-Credit Bills – These are debts you owe that don’t appear on your credit usually (i.e. your auto mechanic, cell phones, tax bills, medical etc.). You might be thinking that you can ignore these bills, but that’s not the case. Not paying these can lead to judgments and judgments have serious consequences on your credit report. Try to work out payment arrangements to keep this from happening.

In difficult times when money is tight, you may need to access your credit to get by. You will need to keep these tips in mind so that you have that option available to you. Even when you are unable to pay your bills as you have when you making more money, these tips will come in handy.

Save

Friendship and Money

Friendship and money – these are things we treasure, but sometimes they can be at odds. I can remember when I started my first business and money was tight. I had friends that wanted us to do what we had always done in the past – going to dinner, going to a sporting event / concerts and more – just like old times.

I remember thinking, I can’t afford this right now. Don’t they realize I just started a business and I am not making the money I used to? How could they even ask this of us to do this? All these thoughts went through my head, but I was too embarrassed to say them out loud.

One of the things I look back on and wish that I was able to share my thoughts. But I didn’t share my thoughts. I kept up outside appearances and did whatever with my friends anyway. I didn’t want to disappoint our friends. I didn’t want them to think that we didn’t have the money. In reality, we didn’t have the money then and we were keeping up outside appearances to “keep up with the Jones” instead of being true to ourselves.

This was and is a hard lesson to learn. We all want to have everything and marketing makes us believe we need all of this. Do we? I think this comes with age and wisdom and I wish I had learned this earlier in life, but I know this now. I know that I treasure time with friends and quiet time and not necessary the stuff.

I personally have grown over time from this young woman and now am more able to express my feeling / situation to others. I can turn down invites, that I don’t want to do. I can say, that’s not something I really want to spend money on. I can request separate checks versus splitting the bill 50/50. All of these are choices that you get to make because it’s your money and time.

Don’t be afraid to express your thoughts out loud to your friends. Be gracious in your words no matter which side you are on. Friendship and money are always going to be a part of your life. Be comfortable with your friends and money and be willing to share your feelings with others. Maybe they are feeling the same and can’t express it.

Save

Budgeting

This newsletter, we are going to talk about spending too much! Personally, we upgraded the master bedroom and bath. In addition to the insurance deductible, we added on the additional expense of better bathroom fixtures – granite counter, higher end faucet, natural stone ceramic tile and more. Yes, we did spend more (maybe too much). With a new year beginning, we need to reign in our expenses and rebuild our savings.

If your 2017 goal is to track your expenses and come up with your actual budget, there is an exercise I like my clients to do when they have their budget created. Take out two different color highlighters. Use one color for your fixed expenses (amounts that can’t easily change) and then use the second color for expenses that you can adjust or eliminate. Typically, I see three areas for the adjust or eliminate category:

Penalty fees (late fees, overdraft, over limit, etc.)
Do it yourself fees – these are things that you pay others to do that you could do yourself and save money (lawn maintenance, snow removal, housecleaning, coffee, manicure / pedicure, laundry, trash pick-up, etc.)
Life extras – these are the things that you do that you could reduce or live without (entertainment, movies, concerts, dinning out / take-out food, personal care, etc.)

Now make a list of five ways to reduce or eliminate specific items. For example, I could find a teen to shovel my snow versus paying a snow plowing service.I could download a movie for free (Hoopla) or borrow from the library versus renting and not returning on time and incurring a late fee. I could balance my checkbook regularly to know how much money I have available and not incur an overdraft fee. These are just a couple of ideas. Now make your list and track your savings. How much did you save this month? How much would that be in one year?

Are you getting the hang of it? Are there more ways to reduce or save on your expenses? Share what expenses you have reduced or eliminated by 5pm EST on March 10, 2017 as a comment below and you could win a copy of my new book 111 Ways To Save. Three winners will be selected randomly at the end of March.

Save

Knowing Your Finances

NewYear-baby Welcome to 2017. My goal for you is to keep you informed and assist you with your personal finances. Remember, that no one cares (or should care) about your finances as much as you should. This may be shocking to some, but it shouldn’t be. You have your best interests at heart.

From time to time I meet people who say that someone else handles the finances and they are uninformed. That’s not good enough. Every single person should know and understand their own finances individually and as a couple. So make this year the year that you make your personal finances your goal.

To get from where you are today to being in the know, step one is to make your finances a priority in your life. With that said, I don’t what to overwhelm you. Let’s start with a few easy questions, although the answers may be tough:

$   What do I earn? Sounds simple, but do you know the answer?
$   What do I own? These are your assets – your home, car, etc.
$   What do I owe? That’s a hard question for some to actually face.

I am going to give you a hint about the answers.

The first two questions should be upward moving numbers. What you earn now should be more than 10 years ago. The same with what you own. The last question should be downward moving number, unless you recently took on a mortgage.

These three simple but complex questions, are the start to being informed about your own finances.

Take some time to answer these questions and you will be more informed about your finances.

Stay tuned for more articles to get you aware of your finances.

Save