Jill Russo Foster

Tips for Successful Personal Finances

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Our January Rituals

It’s that time of year that we evaluate many things in our lives:

January is a month that we analyze our bills, We review all bills and if necessary, we take action.  It could be as simple as comparison shopping, reviewing overages and more.  One thing we have done was to review our homeowners insurance and make some changes.   We replaced our home’s roof last fall, that qualified us for a credit on our homeowner’s insurance.  We made some other small changes.  All that resulted in a $500 premium savings.

As we reviewed finances, we made a decision to close some accounts that were no longer used, cancelled memberships / subscriptions that we didn’t use.  We transferred some debt to a zero percentage interest rate credit card.  If you do this make sure you payoff the balance before the zero percentage expires.  We have taken the balance and divided it by the number of months.  We make that payment or more each and every month.  We updated our phone and mail preferences so that we receive less unwanted mail and phone calls.  For links to these companies visit my resources page.

While we are preparing for our taxes, we are reviewing paperwork.  That means filing, scanning and shredding.  Be sure to check with your tax preparer about what documents should be saved and for how long.

At this time of year, we update all passwords.  You never want to use the same password for your accounts – accounts should have there own unique user id and password.  Yes, it can be a pain to remember.  But if someone get access to one of your accounts, you don’t want to give them access to everything.

What do you do annually in January?

99 Ways To Save

99 great ways to save 10th anniversary edition

Each year AARP offers great tip on savings.  This year’s list is out and it’s the 10th anniversary addition.  How much can you save with these tips?

AARP’s 99 Great Ways To Save

What Can You Do With $20.00

In honor of Money Smart Week, let’s talk about cash. Do you have enough?  Are you living paycheck to paycheck? My philosophy about money is that is comes down to make choices that are right for you at this particular time of you life.  Let’s start with $20.00 cash.  What would you do?

A $20.00 may not seem to be a lot of money, but it can be.  If I gave you $20.00 bill, what would you do with it?

You could:

  1.  Deposit it to your bank account or open a bank account
  2.  Buy something
  3.  Give it to help someone or a charity to help others
  4.  Have fun by brightening your day

I bet you can think of more choices.  Your choices are unlimited.  But instead of think about one thing to do, how about thinking about multiple things to do.  You might be thinking that $20.00 is too little to do anything with, trust me it’s not.

What will $20.00 buy you:

  1.  Movie ticket and possibly popcorn too
  2.  Flowers for you or to give away
  3.  Picnic lunch on a nice spring day
  4.  Pay extra on a bill
  5.  Can of paint to refresh a room

My suggestion is to think about money is multiples.  In this case, it’s not $20.00 maybe it’s 2 $10.00 bills or 4 $5.00 bills.  Now what can you do with that?  Now you can select multiple things on your list.  Your choices are unlimited.  Instead of thinking it’s only $20, think 12 months ahead – that would be $240.  What could you do with that?

Finding extra money (no matter how small) can be put to good use.  The choice is yours – do you use it today or save it for tomorrow?

 

What We Spend Money On

Last week I wrote about what we don’t spend money on.  Some of it may have surprise you.  But we don’t live by candle light and never go anywhere.  Today, I’ll share with you what is important to us and what we spend our money on.

Yes, we spend money on food – good food – healthy food – organic, free range, pasture raised food like our parents purchased.  We make most of our foods from scratch and have home cooked meals most nights and bring our lunches to work.  We rarely buy processed and prepared foods.  Once the weather starts to warm up, I start my vegetable garden.  It’s another way to have fresh food at a fraction of the cost. This is where we spend money.  I like to think of this as back to basics.  The same is true for our home.  We clean with home made cleaners, made up of vinegar, baking soda, essential oils and water.

We also travel.  We save most of the year to travel – sometimes local sometimes far.  But we do this on a budget and look for ways to save with deals, points, miles and rewards. We are in the process of planning a trip for 2020 right now. It may seem far away, but to get the lowest prices you sometimes have to plan the travel when it becomes available.  You may be aware of this with airfares that prices go up and up, the same is true for other travel plans.

What do you spend money on?

First Together Then Apart – Now What?

In our last issue, we discussed whether you should blend your finances when you get into a relationship. Money will be your biggest source of friction, and having boundaries doesn’t hurt. I listed some of the different financial relationships couples choose. There are different options besides “What’s mine is mine and never ‘ours’ or “It’s all or nothing or I’m out of here.”

Sometimes your best efforts to create a life together fail, and the relationship ends. Today, we’ll discuss how to unblend your finances. Whether you decided to share all of your accounts, or only share expenses, you should separate your finances as soon as possible, because you can be sure that someone’s name is on the wrong paperwork.

Take a look at your…

  • Rent or Mortgage: Who is on the lease agreement or mortgage? It should be the one who actually lives there. Ignore that piece of wisdom and risk having your home sold out from under you.  Your name shouldn’t be on there if you don’t live there.
  • Utilities, cable, and cell phone: Whose name is on the accounts? They should be in the name of the person using them. If you don’t transfer ownership, you could have your utilities cut off without notice or worse yet – have collection accounts on your credit that you didn’t even know about.
  • Insurance: This includes car, apartment, home, life, and medical. You don’t want to be without insurance, and you don’t want your money going to the wrong person if you don’t update your beneficiaries.
  • Credit cards and loans: Do you want to have your credit affected by charges that aren’t yours, or be forced to make payments on a car you don’t use?

“But Jill,” you say, “these all sound like things that happen in a hostile breakup. We’re not like that.”  Even if your breakup is friendly, and your ex is as trustworthy and competent as a super hero’s alter ego, you still need to separate your accounts to protect yourself in case something happens to one of you. If one of you dies, remarries, or is mentally incapacitated, the law won’t recognize verbal agreements or promises. They only see whose name is on a piece of paper.

Let’s talk about verbal agreements. Let’s say the house and car loan are in your name, but you want to be nice. You don’t need them, and your ex does. Your ex has agreed to make payments, so it’s no big deal, right?

Wrong. Your credit will take a hit with the first missed, or late, payment. And, you may not be able to get a new car or house for yourself because your debt to income ratio is too high. The bank won’t take verbal agreements or divorce decrees with your ex into consideration when you apply for your loan.

Here’s something else to think about: Can you maintain your current lifestyle if you live separately?

If you end up with the house or the car, can you afford the payments? Can you pay for the utilities, the maintenance and the insurance? You may have to make tough decisions, because you could be without the things you need to live if you don’t plan ahead.

Too many people have  found themselves temporarily homeless, or had their credit ruined, or worse bankruptcy after a breakup. Don’t let this happen to you.

Love and Money

In honor of Valentine’s Day, let’s talk about relationships and finances.  When you get to that point in a relationship where you are discussing finances, what should you do?  Should you have joint accounts or separate – you get to choose?  Here is some of the thought process for both:

First of all, you may choose not to blend your finances at all. Many couples keep separate accounts and actually have happier and more successful partnerships because there are fewer arguments about who spent money on what and who overdrew the bank account. Others choose to handle their money and debts together, and they do just fine. The choice is yours.

Look at your habits and goals when you consider whether to combine your accounts or keep them separate:

  • How does each of you handle savings and debt repayment? Do you have similar philosophies, or are your bank balances mirror opposites, with one carrying a large debt balance and the other carrying a large savings balance?
  • Do you have the same financial goals? Or, is one of you saving mainly towards retirement, while the other wants to save for amazing vacations and a nice car.
  • Does one, or both, of you have any issues that you would bring into a blended financial arrangement? For example, are there any debts that are currently in collections or that were charged off; bankruptcy; judgments; wage garnishments; or tax liens?

Some people find this subject to be a touchy one.  But, keeping separate accounts isn’t about holding out, or being less in love. Sometimes, it’s about protecting each other and making decisions that will carry you furthest towards your mutual goals.

If You Have Separate Accounts, How Do You Split Expenses?

Most people assume 50/50, but there are other options. You could choose different percentages based on incomes, family size, habits and hobbies. For example, if you have shared custody of your 3 kids with a former partner, then you might pay a higher percentage of the food bill. If your hobby raises the electric bill (gaming, fish tanks, etc.), then you might pay a higher percentage of the utilities. You don’t have to use percentages – you can divide up the bills, where one of you pays for this expense and the other pays for that expense. The choices are as varied as the couples who make them.

The bottom line is that you need to make informed choices that are right for you individually and as a couple. Money is the biggest source of friction in relationships. Have the conversation before you get married or move in together, so you know what to expect ahead of time. If you’re already living together, it’s not too late to make changes.  Remember that this isn’t set in stone.  Life changes and so do your finances, so revisit them on a regular basis and make the necessary changes for what is going on in your life now.

Finances and Money

Finance and money is more than paying your bills on time.  Yes, this is extremely important – paying bills late may effect your credit and can cost you money with late fees / finance charges.  But there is more getting your finances organized.  Do you have the money to pay your bills each and every month?  You will want to have money for today and for the future.  Do you have goals you want to achieve?

There are many ways to deal with your finances and money and you have to find the plan that works for you.

The major parts of finances and money:

Determine your goals – what do you want in life?  Maybe a short term goal is having your month last all the way to the end of the month, or to be able to pay all bills in fulls each and every month.  What about long term goals?  How about saving for …. (insert goal such as paying for college, a car, home, vacation) all the way to financial independence.

Action plan – how are you going to achieve your goals?  Break this down into action steps, using the smart goal formula.  What is the first step you need to do to start down this financial road?  Maybe it’s starting to save … (insert amount every pay period).

Budgeting – now’s the time to put your money on the table.  How much money do you need to achieve your goals?  Start by tracking your net income and your expenses (every penny) to see where you stand.  Don’t think your have money to save, then you need to make changes to reduce your expenses and/or increase your income.  Remember that making a budget is not a one time thing, your are making a budget, review and sticking to it.

Savings money – break it down into manageable amounts and be realistic.  Your not going to be able to save $1,000 in a month, but your could start out by planning to save $20 or more per paycheck.  Automating your saving is the easiest and best way to stick with this goal – paying yourself first before you paying anything else.

Paying down debt – we all know that the finance / interest charges are the enemy of your budget.  This is money that could be used in other ways.  Don’t stick you head in the sand, we have all been there at one point or another.  Make a plan to payoff your debt – avalanche or snowball methods are way to start.

Take some time and take a look at your finances and start to deal with your finances and money to get on a path to achieve your goals.

This is very simplified and not all plans work for everyone.  Take the time to modify or find a plan that works for you and your finances.

If you want more information, please visit my website for my upcoming workshops.

 

Get Organized

January is National Get Organized month.

What are you doing to get yourself and your space organized?

In my book, Thrive In Five:Take Charge of Your Finances In 5 Minutes A Day, January is the month to organize your bills.  Now that the holidays are over, actually open up your bills and look at the bill details, don’t just pay them.  Take the time to review them to see if it’s correct.  Take the time to see if you can do something to save money, Take the time to see what competitors are charging – maybe it’s time to switch or negotiate.  If you want to follow along, my book gives you action steps for each day of the month, so that this isn’t an overwhelming task.

We review our bills in our household each year and it never ceases to amaze me how much we can save.  We stick to my 5 minute a day theme, take an honest look at one bill.  We found that our gasoline credit card bill neglected to give us the $.06/gallon discount.  It’s not much, but it is still our money.  So we made a quick call and got the discount applied.  All this in less than 5 minutes.

And because it’s January and following along with National Get Organized month, we have set up our new filing system for 2019 bills.  Start the filing now as the year begins so that your don’t have paper piling up.  All papers are filed and ready if or when you may need them.

If you want to learn more about taking charge of your finances and would like to purchase a copy of my book, Thrive In Five:Take Charge of Your Finances In 5 Minutes A Day click here.

Starting Off Your Finances For The New Year

Is one of your goals to take control of your finances this year?  Do you want to get control and understand what you have and what you need?  Do you just want to get your finances organized once and for all?  Do you feel there are no more ways to cut your expenses?  Is your goal to save more money for retirement or other goal?  Whatever you want, January is always a good time to start.

If you want to take a quick look and here’s a few tips from Real Simple Magazine – 22 Smart Ideas to Take Control of Your Money.

For a more in depth look, my book Thrive In Five:  Take Control of Your Finances In Five Minutes A Day is a great way to start your finances off with a quick suggestion for each day of the year.  Each chapter is dedicated to one aspect of your finances.  And it even includes catch up days to when there isn’t enough time to squeeze on more thing into your day.  For more information or to purchase your copy, click here.

 

Increasing (or Starting) That Emergency Fund

Are you one of those people that sets a goal to have or increase your emergency savings fund each year.  As we reach the year end, did you accomplish this?

An emergency fund is something that each and every one should have.  If life hands you an unexpected expense and you really need to pay for this now, how will you handle this without that emergency fund?  That unexpected expense can be a car repair, loss of a job, a home repair and more.  These expenses typically come when you don’t have any extra money.  If it’s something you need to do immediately, without this savings you will be adding debt to your budget.  That’s where your emergency fund comes into play.  If you have one, you wouldn’t have the stress of figuring out how to pay for it.  That’s why you need to start or increase yours today!

Have you made your plan to start or increase your emergency fund? Don’t get overwhelmed thinking you need thousands of dollars now.  Nobody starts off with thousands, think baby steps to increase your emergency savings with each and every pay check. 

Steps to start your emergency fund:

  1. Open a new savings account for your emergency fund – don’t link it to your ATM. debit card.
  2. Set an amount to save each pay period – can you find $10 or more to save each pay period?
  3. Set up automatic withdrawals from your paycheck – either through your payroll dept. or with your bank.  Think pay yourself first attitude (you won’t spend it if you don’t see it).

Follow these steps to start out and increase the dollar amount at least annually. A good time to do this is when you get a raise at work – more money coming in, the more money can go to your emergency savings.  Suze Orman’s suggests that everyone needs eight months in their emergency savings.  That can be overwhelming, so let’s start with a goal of saving $1,000 in a year – you can do this as it’s on;y $20 a week.

If you haven’t started or at the level you want / need to be at, these are some great tips from WIFE – Women’s Institute for Financial Education to get you started.

Happy Savings!