Tag Archives: Budgeting

4 Money Skills You Should’ve Had Yesterday

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Everyone’s life is different and we all learn life skills in a different order, at a different age, and at a different place. No matter where you’re at, here are 4 money skills you should have.

Negotiating purchases: When you were shopping for your first new car you probably didn’t have a clue about how much you should spend or how much the car was really worth. It’s time to do your homework. Negotiation is a battle and you need to show up to the dealership prepared with knowledge as your ammo. Don’t just accept the price of the first car you like. Make a counter-offer that’s reasonable and don’t be afraid to say no and walk away. Stick to your gameplan and you’ll end up with a good deal.

Here’s how to buy a car in 5 easy steps!

Budgeting your paycheck: Your first job put more money in your pocket than you’d ever made in your life and you probably spent like crazy. Now that you’re older, you need to be seriously thinking about your spending habits and saving for retirement. If you haven’t used a budget before, find one and stick to it. If you’ve been living paycheck to paycheck, it’s time to stop.

Check out our budgeting guide for some helpful hints on creating a budget.

Maximizing your credit score: When you’re young, you don’t care about your credit score. But it’s never too early to start paying attention to it. Anything you purchase that requires making payments will be affected by your credit score. The higher your score, the better your interest rate, which will save you a lot of money over the life of the loan.

Using your credit cards: Credit cards are a valuable tool when used correctly. When used irresponsibly, they can turn on you in a heartbeat. When you get that first credit card, use it periodically to build credit. DON’T overspend. If you want to use your credit card more often, make sure you pay it off every month. EVERY SINGLE MONTH. Don’t miss payments and don’t leave a balance. If you stick to those rules, you’ll be in good shape.

Article Source: John Pettit for CUInsight.com

4 Reasons You’re in Debt

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Status.

We’ve all heard of “Keeping up with the Joneses.” It’s that desire to have the things others have that may be too extravagant for your budget. If you go around thinking about the things you feel like you’re missing out on, you’re probably going to put yourself in a financial hole. Take a pause when you feel an impulse-buy coming on, and save yourself a headache later.

Credit cards.

Don’t let your credit cards be in charge (no pun intended). Take hold of your finances and don’t spend money you don’t have. Sure, there are benefits to using credit cards, but they can also be your worst enemy if you’re not careful. Use credit cards to build good credit but once you start racking up debt, it can take a long time to get out from underneath it.

Unforeseen expenses.

Sometimes expenses come out of nowhere. You may feel like you’re doing good, but then your engine fails and you need a new car. Be prepared. Make sure you’re building up an emergency fund, because if you don’t have it when you need it, you’ll end up putting yourself in a deep hole in the blink of an eye.

Life is expensive.

You may think your budget is mapped out and solid (and it may be), but then your best friend gets engaged. The next thing you know, you’re hitting up an ATM machine. Sometimes, you need to spend money celebrating, but plan ahead and you’ll be doing yourself a favor down the road.

Get yourself on track financially with our budgeting guidebook! Need help creating a budget you can stick to? Attend one of our free budgeting seminars during the year or make an appointment with a representative at your local First Financial branch.

Article Source: John Pettit for CUInsight.com

 

5 Ways to Make Budgeting Easy Even Around the Holidays

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Business man with a santa hat isolated, santa's budget

A budget is essential because having a budget is the first step to achieving financial success. “It’s the backbone of everything else that you do financially,” says David Weliver, founder of financial blog MoneyUnder30. “It all comes down to that golden rule of spending less than you earn. A budget is how you control that.” Think you can’t budget around the holidays?  Think again. You can use these helpful budgeting tips all year long!

Follow the Rules

One guideline of budgeting is the 50/30/20 rule. In the simplest terms, 50% of your income should go to your needs, 30% for wants, and 20% for savings.

What’s a need? For most people, that will include housing costs, whether that’s rent and rental insurance or mortgage payments and homeowner’s insurance. Beyond that, spending priorities can vary greatly. Essentials also might include groceries, car payments, cell phone bills, and utilities.

Wants would fit in the flexible spending category. They might include eating out, going to the movies, buying clothes, or other day-to-day expenses that can vary greatly from month to month.

Finally, the 20% you save should go to your financial goals, whether it’s short-term goals, such as saving for a vacation, or long-term goals like funding your retirement.

These guidelines can be adapted to your personal situation. “It’s okay to set your own ratios,” Weliver says. “But the goal is to try to live so that your essentials are 50 percent or less of your income, and then you have money left over.”

Organize Your Money

Once you set your budget, there’s a good chance you’ll need help tracking your progress. You may want to do so using an Excel spreadsheet, a pencil and paper or an online budgeting tool.

You may even try the envelope method, for which you use cash that you divvy up between a number of category-labeled envelopes. Once an envelope is empty, you’re done spending for that category that month. It’s an extreme strategy, especially in today’s world of plastic and online payments, but it really works.

Weliver suggests a twist on the envelope method: Try using different bank accounts for different types of spending. One account can be reserved for your fixed essential costs, another for groceries, another for dining out and so on. Of course, you need to make sure you are using fee-free accounts.

Focus on Repaying Debt

If you’re carrying a lot of debt, it can quickly consume your budget.

The minimum amount due on any debt you have must count among your essential expenses. Ideally, you want to pay more than the minimum, even if it means socking away less in savings and investments. “Paying down debt is a form of savings,” says Weliver. The faster you pay off your debt, the more you save in interest charges.

There are two common approaches to paying off debt. With one, you tackle the balances with the highest interest rates first. This one will save you the most on interest charges in the long run. The other strategy, often called the snowball method, involves paying off the smallest debt first, which makes you feel good and encourages you to keep rolling until your debt is gone.

If you are carrying a lot of high interest debt across multiple accounts, it may make sense to consolidate or refinance those loans.

Go Digital

Mint is the reigning king of free budgeting sites and apps, but there are tons of other options that work pretty similarly.

The big idea: You connect the site to your accounts with other financial institutions. The site then tracks all of your money’s movements in one place, automatically categorizing each transaction and organizing your expenses into colorful charts and graphs to help you identify spending trends.

Set Spending and Saving on Autopilot

Once you have your budget in place, setting up automatic contributions for your savings and automatic payments for regular bills can make it a breeze to stay on track. Some companies even provide discounts to people who sign up for automatic payments.

Two apps can help you automate your savings further:

  • Acorns rounds up to the nearest dollar on every purchase you make with a linked checking account and automatically invests the change into a diversified portfolio for you. You can customize your risk tolerance and adapt your investments based on personal preferences.
  • Digit monitors your spending habits and, when it determines you can safely afford it, transfers a small amount of money (typically between $5 to $50 every few days) from your linked checking account to a special Digit savings account.

Automating your budgeting and spending will encourage you to save more and make it easier to achieve your financial goals, even when you’re holiday shopping too!

Article Source: http://www.forbes.com/sites/tomanderson/2016/04/05/5-ways-to-make-budgeting-easy/2/#11f576f1558c

 

9 Signs You’re Spending More Money Than You Have to and How to Fix It

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Sometimes it’s tough to find a healthy balance when it comes to your finances. While it’s nice to treat yourself every so often, doing it on the regular can be one of the signs that you may be spending too much money. Even though money is a taboo topic and can be a sensitive issue, it’s important to be honest with yourself. While it would be great to make millions of dollars and spend it frivolously all over town, you also need to keep your financial future in mind.

According to the financial app Mint, you might want to be more careful with your money if you’re not paying your bills on time, you’re paying for your necessities with credit cards, or you’re struggling to meet minimum payments. If you find yourself dealing with these things on the regular, it might be a good idea to create a budget and start using cash so you can keep an eye on your finances and spend less money. Feeling stressed about money is something that no one should have to deal with on a daily basis – that’s why it’s important to be honest with yourself and be aware of the signs that you’re spending too much.

Need some help in that department? Here are nine signs you may be spending more money than you need to.

1. You Carry A Large Balance On Your Credit Card

Having more than 30% of your credit card limit on your credit card is considered to be a big no-no. If you find that your credit card limit is higher than your savings account, you might want to switch things up. Some credit cards do have tools where you can track your expenses online. You can also use money apps such as Mint to figure out exactly where everything is going.

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2. You’re Easily Swayed By Your Social Activities

It isn’t fun missing out on adventures with your friends. But while happy hour sounds awesome, paying your bills is even better. According to Business Insider, author of Living Well, Spending Less: 12 Secrets to the Good Life, Ruth Soukup says, “This can be as innocent as going out to eat when you’ve already exhausted your restaurant fund for the month, or as extreme as paying rent you can’t afford in order to keep up with your friends.”  It really won’t be fun when you can’t afford your rent – stick to your budget and don’t spend outside your means.

3. You Don’t Have An Emergency Fund

Ideally, you want to have 10 percent of your income in your savings, but even five percent is good – as long as you have some type of savings built up. Essentially, you want to make sure that you have enough in your bank account for those rainy days. According to Business Insider, billionaire John Paul DeJoria – it’s important to always have at least three to six months’ worth of savings in your account, depending on how much you make annually.

4. You’re Living Paycheck To Paycheck

You probably need to re-adjust your finances if you find yourself living from paycheck to paycheck and not saving any money at the end of the month. According to U.S. Money, if you have a budget, but still find yourself short at the end of every month, it might be time to cut your expenses and re-evaluate.

Check out our free budgeting and savings calculators at firstffcu.com to get started!

5. You Don’t Have A Budget

Certified money coach Ashley Feinstein, founder of “Knowing Your Worth” says, “I recommend that every client keep a money journal for at least a couple of weeks to get conscious about where their money is going.” If there’s one thing you need to do ASAP on this list, it’s creating a budget to help get your finances on track.

6. Your Fridge Is Empty

You might be thinking that this has no correlation with your spending habits, but it actually does. Think about it: if your fridge is empty and you never have to do the dishes, it probably means you spend a lot of money eating out. According to the website Cheat Sheet, if you’re spending an average of $45 for two people and eating out for dinner once or twice a week, you’ve probably already spent more than you would on a week of groceries.

7. You Borrow From Friends Or Family

While it’s probably okay to borrow every now and then (in addition to paying them back on a timely manner), you don’t want to be borrowing from friends or family every time you need to pay your rent.  According to the Huffington Post, if you’re constantly asking your friends and family for money, then it means you either are spending way too much or you need to look for a new job.  Not to mention, constantly borrowing from a loved one can put strain and tension in your relationship.

8. You Don’t Know Where Your Money Is Going

If you find yourself forgetting where all your money is going to, whether you use cash or credit, then it might be a sign that you need to fix your finances. According to U.S. Money, people who shop a lot tend to ignore exactly how much money they spend. It’s best to figure out a budget with exactly how much spending money you have, so you know your spending limit.

9. You Feel Stressed About Money

The American Psychological Association conducted a survey and found that 72% of Americans were stressed about money at least once in the month. One of the key signs you need to pay attention to is how money actually makes you feel. Sometimes finances can make you feel edgy or anxious when you don’t have control over them. However, if you keep track of every penny that goes in and out of your account, then that anxious feeling could subside.

While spending money may bring you happiness, it’s important to budget your finances so you can have some in savings. While there are plenty of ways to spend your money, it doesn’t necessarily mean you should.

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Article Source: Raven Ishak for Bustle.com, http://www.bustle.com/articles/170200-9-signs-you-may-be-spending-more-money-than-you-have-to-how-to-fix 

9 Hacks for a Perfect Monthly Budget

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Pencil on the statement of payroll details

While the word “budget” may want to send some of us screaming in the other direction, creating a successful budget is actually one of the biggest gifts we can give ourselves. It not only helps you out financially, but it does a ton to reduce the day-to-day anxiety so many of us feel when it comes to our finances.

If you’re losing sleep over your monthly finances but don’t know where to begin, here are eleven helpful tips for getting started with a monthly budget.

Grab Your Calculator and Block Out Some Time

Grab your calculator, a pen and paper, and open that Excel doc — and most importantly, block out some time for this. Really figuring out what you spend can take a few hours, and one of the most important parts of this process is simply scheduling some time to do it.

Record Your Take-Home Pay

The first step in any budgeting process is to figure out how much you take home each month. Don’t include anything that automatically gets subtracted, like a 401k or taxes — you just want to know what you actually have in your pocket each month.

Subtract The Essential Expenses

Subtract all of the “essential” expenses you absolutely have to pay each month, like student loans, rent, car payments, cell phone, etc. Take time to really think about every bill that comes in.

Allocate For Savings

You now have the amount of money you can use for personal choices — as in you can literally do whatever you want with it. Things like groceries, clothes, and take out all fit into this category. And in a piece for Nerd Wallet, financial writer Anika Sekar says this is now when you allocate for savings (or “paying yourself first” as some retirement planners put it). She recommended saving at least 20 percent after taxes, which comes to about 12-16 percent pre-tax. If you already accounted for a retirement fund in a previous step, you can factor it into this assessment.

Assess The Numbers

Now is the time when you assess the balance of your numbers. In a piece for the financial site Learnvest, financial writer Laura Shin recommended the 50/20/30 rule of thumb. This system says that no more than half your income should go to necessary expenses, no more than 20 percent should go to savings, and no more than 30 percent should go to everything else. If your ratio is coming off far from this, think about re-balancing.

Get Into The Nitty-Gritty

Now it’s time to break down that 30 percent, “personal choice,” portion of your budget. Figure out all the little things you spend on each month — from coffee, to manicures, to ordering in. It’s important to be realistic during this process.

Make Some Cuts

It’s entirely possible that after completing the above step you realize that you spend way more than your allocated 30 percent on random stuff. This is the stage where you might need to figure out where you can cut some expenses. Maybe it’s making coffee at home, or limiting yourself to a take out order just once a week, or maybe it’s not letting yourself “just pop in” to a store after work because you know you always end up buying something.

Consider A Money Tracking App

If all of this seems overwhelming, consider a money-tracking app on your phone. DailyWorth.com recommended Mint.com, Goodbudget, and Mvelopes as a few of their top choices for personal budget helpers, but you can definitely research around to see which one best suits your needs.

Remember — Treat Yourself Sometimes!

Budgeting doesn’t mean restriction. It just means knowing where your money is actually going. Don’t get overwhelmed at the thought of a monthly budget or think a solid budget is out of reach. Just remember it’s about informed choices so you can enjoy the money you make!

Smart Shopping Tricks to Make Your Budget Last All Month

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shopping cart postitWe can all use ways to stretch our paycheck each month, but it’s not always easy to know which expenses to focus on minimizing first. The fact is, some costs are easier to trim down than others. The strategies below will help you always score the lowest price, making it easier for your budget to go farther.

Always look for the deal.

Local drugstores often feature special deals on everything from personal care to grocery items. While the selection is generally smaller than at the grocery store, drugstores can offer even better discounts. Looking for these deals, and applying them to your purchase can generate big savings.

Register for rewards programs.

Many stores feature rewards programs, including drugstores. Walgreens has Balance Rewards, CVS has ExtraCare, and RiteAid has Wellness+. If you register for these programs you’ll likely receive frequent emails, but there will be gems among them, and you might even save 20% off an order. A smartphone app like Key Ring makes it easy to track account numbers for multiple programs.

Use manufacturers’ coupons.

In addition to browsing through Sunday circulars, you can rely on websites like coupons.com to search and print coupons at no cost to you. Since most manufacturers’ coupons usually have an expiration date that is at least one month into the future, hold onto the coupons until you find a great deal.

Look out for store coupon books.

Many stores offer coupon books, usually at the front of the store near the pile of circulars. They often contain many high value store coupons that can be combined with sales and manufacturers’ coupons for additional savings.

Shop online.

When it comes to essential drugstore items, you can often find the lowest prices online, especially when coupons are applied. Some coupons offer deeper discounts to online shoppers, and you can find everything from vitamins, cleaning supplies, personal care items and pain relievers for reduced prices.

Use blogs.

Many blogs and websites collect coupons and deals for readers, which makes your job even easier. Sites like Retailmenot.com research and sort deals for you, and you can often match the deals with sales in circulars.

Don’t pay full price.

Most retailers make it easy to find deals online. In fact, you should never pay full price for your purchases, at least before checking for discount codes. Signing up for store email lists will also help make sure you don’t miss out on discounts.

Get an Amazon Prime membership.

It might sound counterintuitive, but purchasing an Amazon Prime membership can actually end up saving you money. That’s because it comes with two-day shipping on most orders, movie and TV streaming, and one free book rental per month. You can try out a 30-day free trial membership to see if it would end up saving you money.

Write a review.

Some companies are willing to pay customers, in the form of discounts, for leaving reviews on their products listed online. HonestFew and SnagShout are a couple companies that make this process easy. Once you receive items at a low price (or sometimes even free), then you simply log in to leave your review, whether it’s good or bad.

Buy a reusable water bottle.

Going through a handful of water bottles a day is expensive, unnecessary, and bad for the environment. Instead, pick up a reusable water bottle for yourself. You can even get one that comes with a built-in carbon filter to remove tap water impurities. Your body, and the Earth, will thank you.

Use apps.

Many stores have made it even easier to save these days by introducing their own apps. These apps offer special discounts to shoppers that cannot be found anywhere else, and saving is as easy as opening the app and seeing what deals are available. You can even do this while standing in the checkout line. Other apps, like Shopkick, work at many stores. You can earn points by checking in at stores and making purchases, and then using those points to earn gift cards.

Plan ahead.

Planning out meals in advance is one way to keep grocery store costs down because you can minimize waste or unnecessary purchases. You not only cut out impulse purchases at the grocery store but also eliminate the need to order delivery on those nights you realize you don’t have anything to make. Pinterest can also help with new recipe inspiration if you’re feeling stuck.

Article Source: Lisa Koivu for http://money.usnews.com/money/personal-finance/articles/2015/10/20/smart-shopping-tricks-to-make-your-budget-last-all-month