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Fixing My Budget

I feel like a broken record as of late.

I need to get my budget under control.

More specifically, I need to get my spending under control.

Thanks to circumstances beyond my control, my salary has not grown over the past few years while my expenses have grown.  My insurance costs more and my utility bills are higher even though I’ve reduced my usage.  I also bought a house a few years back and the incidental expenses that come with the house didn’t exist while I was renting.

The problem is that I haven’t reduced my spending.  I’m good at making budgets.  I’m not good at sticking to them.  It’s a big problem.  Thankfully, I’m not spending myself into debt.  I use the YNAB plan of spending last month’s income, and in December, I’ve already spent some of the money that is earmarked for spending in January. That means that in January, I have less to spend, and will likely spend some of February’s budgeted money and so on and so forth.

What this means is that I really need to pull back on the spending where I don’t need to.  This year, I went overboard with gifting, I know.  When I finally pulled out all of the things I had purchased for Christmas, I was shocked at how much I had bought.  Next year?  I need to keep lists.  Buying gifts year round is a great idea, but it can mean that I end up with way too much stuff.  (Still, it will be fun to see these gifts opened on Christmas.)

I also need to really watch the spending on things for my house.  I was very careful about not buying everything I needed for my house when I bought it almost four years ago.  I still have bare walls and unfurnished rooms.  That’s okay – not everything needs to be done at once.  But I keep finding little things that I want to add to my house.  I need to prioritize the spending.  Getting the dresser for the guest bedroom was a great idea and needed to be done.  The awesome art I also bought for that room?  Less necessary.

I think that my plan is going to be to hold things very tight in January.  It will be hard since I will be traveling, and vacations always come with unplanned expenses, but I’m going to be very careful about the funds that go out in January.  Sure, sometimes there are unexpected expenses that screw up the budget, like a trip to the vet for the cats, but any discretionary funds must be very closely watched.  I have my budget available to me on my phone.  I just need to pay more attention to it.

Does anyone else have trouble sticking to their budgets?

Tis the Season of Giving

The holiday season has arrived and with it comes hundreds of requests for charitable donations.  Some of this has to do with the holiday spirit, but some of it has to do with the fact that we’re nearing the end of the year, and if you want the added tax deductions for the charitable donations, you need to get those done before the end of the year (or you can just claim them on your 2015 taxes, of course).

I don’t know about anyone else, but I feel completely inundated with charitable requests.  Friday night alone, two different groups knocked on my door to try to get donations.  As a general policy, I won’t sign up for any sort of donation in person.  I don’t like the pressure and I want the ability to research the charity before I agree to give them money.  A few years back, I did get talked into signing up for a donation in person and it took forever to get “unsubscribed” from the donation.  Never again.

(Of course, if the neighbor kids show up fundraising or if the local firefighters are collecting funds at a stoplight, I will absolutely contribute.  Those situations are a totally different story. )

I do track my charitable donations throughout the year.  I use TurboTax to do my taxes.  It’s what I’ve used for years and it’s what I’m comfortable with, so I’ve had no desire to switch.  Conveniently, their website has a feature called Its Deductible, where you can track your charitable donations throughout the year, and then when it’s time to do your taxes, it downloads directly into TurboTax.  Pretty convenient.

But even before I used this feature, I made a point of tracking all of my charitable donations in a spreadsheet.  It made doing my taxes so much easier.  Too lazy for that?  Save your charitable receipts somewhere.  If they’re electronic, file them away in your email.  If they’re paper copies, put them in a box or a file folder.

Of course, this all assumes that you don’t take the standard deduction on your taxes.  As a homeowner with a mortgage, it’s worth it to me to itemize.

How do I choose which charities I give to?  A couple of ways.  There are a few groups that I have personal ties to, and I give to them every year.  If a friend is running a race or otherwise fundraising for a charity, I will usually give a bit of money to their efforts.  (In fact, I just paused in writing this as it reminded me to go make a donation to a friend’s fundraising page.)  I don’t know if it’s the norm everywhere, but where I’m from, often at a funeral, the family will ask that in lieu of flowers, a donation be made to a certain charity, and in that case, I always make a donation.

Of course, these may not be big donations, but for a charity, every dollar helps.

I also try to donate to non-profits that I benefit from.  Right now, Wikipedia is running their annual donation drive.  Do you use Wikipedia?  I do.  So I give them a bit of money every year.  Also, right now, I’m obsessed with the Serial podcast (like much of the country).  When they mentioned that they were looking to fundraise, I gave a few dollars to Chicago Public Media.  Yes, these are both things I can get for free, but I get enjoyment out of them, so why not throw a few dollars their way so as to keep it free for everyone?

One great way to research charities is through Charity Navigator.  They use a number of categories to score a charity, giving them a maximum score of 4 stars.  Of course, that doesn’t mean that if your favorite charity only got three stars that you shouldn’t give.  Go read the information and make a decision as to what you want to do with your money.

And of course, we don’t all have the ability to give money right now, and that’s okay.  But it is the season of giving, so think about giving of your time.  It’s a busy time of year, but lots of organizations are looking for help.  Can’t help now?  Make a commitment to give of your time next year.  Amazing groups can always use another set of hands.

 

 

Use Credit Wisely To Protect Your Finances

Using credit in unthinking ways can be devastating to your finances for many years after the initial action has occurred. A minor credit mistake can cause a significant drop in your credit score, causing you to be charged more for a wide variety of financial products, including credit cards, loans, and insurance. If your credit score falls far enough, it can affect your ability to get a job, obtain a promotion, or get an apartment. It is important to always use credit wisely to ensure that your finances are protected and you are not paying more than necessary for financial products. Here are some tips for using credit wisely.

Only Obtain Credit Cards And Loans When Necessary

Many people make the mistake of applying for nearly every financial product that is offered to them. From mailed offers for car loans and credit cards to shop clerks asking you to sign up for store credit cards when you check out, people with decent credit encounter offers for more credit every week. Applying for additional credit that you don’t need can hurt your credit more than it helps. Your credit score will drop a few points for each application you submit and the new credit products may come with fees and interest rates that cost you a significant amount of money. Even a loan against structured settlement payments has fees associated with it. It is much better to count your pennies and take a loan only if needed.

Check Your Credit Report Regularly

Another thing that people should do more often to safeguard their credit is check their credit report on a regular basis. Checking your credit report will show you any negative or incorrect information that has been added to your credit history by creditors. It is estimated that nearly 25 percent of us have errors on our credit reports. If any incorrect information is found, you can have it corrected by calling the creditor or the credit bureau that issued the report and stating your case. Every person can obtain one free copy of their credit report annually from each of the three major credit bureaus by going to www.annualcreditreport.com and filling in your information.

Only Charge What You Can Afford To Repay Quickly

Carrying a balance on your credit card is a great way to spend hundreds of dollars on interest payments every year. In many cases, people pay much more in interest than the original item cost to buy because they only pay the minimum on their credit card and carry a balance for years. To ensure that you do not waste a ton of money on interest payments or accumulate large amounts of credit card debt, you should only charge what you can afford to repay within a month or two of making the purchase.

Saving Money In Winter

Winter is coming.  Are you prepared?

Here, the temperature has been fluctuating significantly, so until I saw those first few snowflakes, I wasn’t convinced that winter was on its way.  But now a chill has settled in and it can’t be ignored.  The cold weather is here.

Winter can cause heating bills to skyrocket if you’re not careful.  And there are other surprising ways that winter costs you money as well.  Here are a few tips I’ve picked up along the way.

First off, make sure you’ve sealed off any ways that cold weather can use to invade your home.  Check out your windows.  Are they drafty?  Can you feel a cool breeze?  While buying awesome new energy saving windows would be great, that’s not really an option for most of us.  My solution for my one leaky window was to use temporary caulk to caulk it shut.  Not the ideal, but it’s worked pretty well, and I can still open the window if I need to use it as an emergency exit.

You can also buy window insulating kits, which are basically just a clear plastic that goes over your window to help insulate (hence the name).  I’ve not used them in the past, but I’m thinking about trying it this year, particularly in my dining room where I have a number of windows.

Does your house have outdoor spigots?  Do you know how to winterize them?  You need to turn off the water to those spigots and then drain the water from them.  This prevents freezing and burst pipes.  If you can’t turn them off, my best suggestion is to do something to insulate those spigots.  You can buy a little insulated bag that ties around it, but I’m sure you could create one out of some old mittens and some plastic bags.  It’s still going to be better than nothing.

Do you have a car?  Do you drive your car in the winter?  Make sure that your fluids are topped off.  And as I learned, make sure that you don’t let your gas tank get too low.  My car wouldn’t start at one point last year because the gas was low and therefore the contaminants in the tank (water, mostly) froze and caused all sorts of issues.  Lesson learned – since my car lives outside and not in a garage, I will try to make sure I always have a half of tank of gas.

Also, after a bad storm, does your city put salt on the roads?  You want to run your car through a carwash when the storm remnants have cleared.  The salt can cause corrosion to your car.  Plus it’s just nice to have a clean car.  Can you do this yourself?  Sure, if you want to hand wash your car in the winter.

Do you have supplies on hand in case a bad storm keeps you in your home for a number of days?  It’s never a bad idea to have a bit of bottled water stored away as well as some food that you can eat without cooking in case of a power outage.  If you have a gas stove, you will likely still be able to use it if the power is out, so make sure you have a lighter or matches handy.

Do you have a fireplace?  Fireplaces aren’t exactly the best ways to heat a home, but if the power is out and you have no other way to heat the home, sitting in front of a roaring fire is a good way to defrost your toes.  Make sure you have a bit of well seasoned firewood on hand.  It’s cheaper if you buy more, and going in with your neighbors on a few cords of wood is a good way to go.  This fall, I got half a cord of wood from a group order and it will last me quite some time.

Before the first big storm of the year, make sure that you have a shovel and rock salt (if you want it).  The last thing you want to do on the day before a storm is go to the store and try to find a shovel.  Prices can get raised and fights can break out.  Better safe than sorry.

The biggest money saving tip that I can offer for winter is to stay safe.  Hospital bills are expensive.  Be careful as you shovel.  Watch out for invisible patches of ice.  Drive carefully.  Keep yourself safe and healthy.

And turn down that thermostat!  You don’t need to be wearing shorts in December!

Tips to Maximize Your Finances This Christmas

Christmas comes earlier every year, right? Wrong! Despite the fact Christmas has happened on the 25th of December for the last few centuries, people still seem to panic and struggle to plan their finances to accommodate for the festive season ahead.

While money is not required to make a truly magical Christmas, the holiday still puts a strain on the purse strings of a budgeter. Without adequate financial planning you may feel that your Christmas doesn’t quite live up to your imagination.

Don’t panic, as the festive season hasn’t arrived just yet. There is still plenty of time to create a wonderful day without breaking your budget. Many people feel pressured to spend all they have over the Christmas period, yet we must remember that Christmas is only one day, don’t let it dictate the rest of your year.

Should we plan ahead?

People have been suggesting you should plan ahead the whole year, but you can find some amazing bargains on last-minute websites too.

Sometimes it pays to wait a little longer and grab a bargain, for example you could find some massively-discounted products on many websites during Black Friday and Cyber Monday. If you are visiting family and friends after Christmas Day you could even wait until the January sales have released their bargains and buy your gifts from those. Present them with a light-hearted IOU note letting the recipient know that their gift is on its way, Santa just got temporarily caught in traffic!

Buy your Christmas meal ingredients from a budget store

People are often snobby when it comes to Christmas food shopping as they associate Christmas with having fine-quality ingredients. However, you would be surprised at the quality of some of the budget stores nowadays, with many surpassing mainstream chains in blind taste tests.

If you cannot be persuaded on the price, why not ask everyone to help out with the meal by putting $5 in each and collaborating your efforts to buy really nice ingredients? Consider making your food from scratch as well, instead of splashing out on store-bought alternatives, for instance cranberry sauce costs next to nothing to make but can be sold for over $6 in stores due to the fancy packaging.

Focus on people, not presents

As mentioned before, Christmas shouldn’t be about commercial customs, it’s about spending quality time with loved ones and being appreciative for what you already have.

Keep it simple and don’t blow your budget for one day out of the whole year.