Tag Archives: Budgeting

9 Hacks for a Perfect Monthly Budget

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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!

10 Money Questions to Ask Yourself

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The first quarter of the year is a great time for reflection. And your money is no exception: Think about where it’s been, where it’s going, and, most important, where you want it to go. Whether your finances had a stellar year or took a hit, take a minute to check in and see where you want to go next. Here are 10 questions to get you started for a better financial year.

1. How much debt am I taking into the new year?
Tally up what you have left to pay on your student loans, any outstanding credit card balances, and your mortgage (if applicable). Take a long, hard look at this number. It’s better to know it than not know it. Make this number a key part of your action plan for next year.

2. How much did I save last year?
If you automate deposits into your savings account, this should be easy to calculate. (If not, here’s your incentive to do it.) Take a look at your savings account and consider what’s there: Could you have saved more? Did you plan to have more? What stopped you from meeting your goal? And if you don’t have a savings account — or a savings plan — make one.

3. What’s my credit score?
First of all, know what goes into your credit score — and then check your number free online. Check your credit report, too, and make sure any debts you’ve accrued this year are accounted for and that no one has taken out lines of credit in your name. Remember: You get one free credit report from each of the three credit bureaus a year: Equifax, Experian and TransUnion.

4. Am I getting the most out of my credit cards?
Take stock of what your credit cards have given you this year, like great rewards, lower interest rates, or cash back. If your cards haven’t provided you with any of those perks, consider upgrading to a different card. If you have a card that’s dragging you down with high annual fees, think about closing it — provided you know the consequences of doing so. Make sure you know the best way to use your cards and that you aren’t inadvertently hurting your credit.

Transfer your high balance to First Financial’s Visa Platinum Cash Plus Credit Card today!* Enjoy great low rates, no annual fees, and 10 day grace period.** Getting started is easy – apply online, 24/7. 

5. How much money will I make this year? Can I make more?
Whether you’re a full-time employee or a one-lady business, consider whether there are ways you can grow your income. Is there some sort of side gig you can take on? Could you be a consultant? If you work a 9 to 5, would a switch to freelance be more lucrative? On the other hand, is it finally time to shut down professional projects that are draining your resources?

6. What do I want to save for in the next year? How will I accomplish that?
Set financial goals, like saving for a down payment on a home, paying off a certain amount of debt, or putting a specific amount in savings. Figure out what strategies you will put in place to save, such as making lifestyle changes or automating with apps.

7. Did I stick to my budget? If not, why not?
If you blew off your budget this year, take time to troubleshoot. Maybe your goals were unrealistic or you didn’t have a budget at all. Now’s the ideal time to make one, or get started with an app or two.

8. How will I budget this year?
Once you know what has (or hasn’t) been working for you, look ahead toward optimizing. Maybe you’re ready to switch from a simple pen and notebook to an app, or vice versa. Maybe you’ve learned that you perform better on a less stringent budget and or that you actually need more structure. If you’re newly partnered (or married), this may involve merging finances — or simply merging financial goals.

9. How much money is in my emergency fund?
You have no idea what the new year could bring: sudden health crises, unexpected layoffs, or a downturn in business. Make sure your emergency fund (about three to six months of living expenses) is robust enough to take care of you if need be. And if not, make it a priority to establish a healthy fund. If you need some incentive to save, make it fun with these hacks.

10. What are some poor money habits I can squash?
Think about some areas in your daily (or monthly) life where you can save — or stretch your dollar. If you’re living beyond your means, know where to rein it in. Eating out at work? Make lunch. Tempted to go buy new clothes? How about revamping your old ones instead? Know the red flags if you think you’re in financial trouble and decide to make a change.

*APR varies up to 18% for purchases, when you open your account based on your credit worthiness. The APR is 18% APR for balance transfers and cash advances. APRs will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fee. Other fees that apply: Cash advance fee of $10 or 3% of the total cash advance amount—whichever is greater (no maximum), Balance transfer fee of $10 or 3% of the balance—whichever is greater (no maximum), Late Payment Fee of $29, $10 Card Replacement Fee, and Returned Payment Fee of $29. A First Financial membership is required to obtain a Visa® Credit Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

**No late fee will be charged if payment is received within 10 days from the payment due date.

Original article source courtesy of Koa Beck of Market Watch.

Financial Choices You’ll Regret in 10 Years

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According to self-made millionaire David Bach, you don’t have to earn a lot of money to get rich. You don’t even need remarkable willpower to build a fortune.

Bach exposes these misconceptions, and more, in his book “The Automatic Millionaire.”

Before you write yourself off as an “average earner,” consider these common misconceptions Bach outlines about money:

1. You don’t have to make a lot of money to be rich.

“How much you earn has almost no bearing on whether or not you can and will build wealth,” Bach writes. “Regardless of the size of your paycheck, you probably already make enough money to become rich.”

On the flip side, a salary with a bunch of zeros tacked on the end doesn’t necessarily equate to wealth. At the end of the day, it’s just a number — and if the cash behind that number is not managed properly, it can disappear in the blink of an eye.

As Robert Kiyosaki, author of the personal finance classic, “Rich Dad Poor Dad,” emphasizes in his book, “Most people fail to realize that in life, it’s not how much money you make. It’s how much money you keep.”

The good news is that anyone can start saving — you don’t need to be rich to invest and take advantage of the power of compound interest. You just have to be smart about it and start as early as possible. When you start to save outweighs how much you save.

2. You don’t need discipline to get rich.

The ultimate money managers don’t necessarily work harder — they don’t have extraordinary willpower or discipline, Bach emphasizes. They simply automate their finances, meaning their money is automatically sent to their investment accounts, savings accounts, and creditors before they even have the chance to spend it. This allows even the laziest of people to grow their wealth.

“Making your financial plan automatic is the one step that virtually guarantees that you won’t fail financially,” Bach writes. You’ll never forget a payment again — and you’ll never be tempted to skimp on savings because you won’t even see the money going directly from your paycheck to your savings accounts. It also frees up valuable time and allows you to focus on the fun parts of life, rather than spend time worrying about whether you paid that bill or if you’re going to overdraft again.

3. You don’t need to be your own boss to get rich.

There’s a lot to be said about self-employment — many self-made millionaires determine the size of their own paycheck by building their own businesses, while average people tend to settle for steady paychecks.

Rest assured, if the entrepreneurial path isn’t for you, “you can still get rich being an employee,” Bach writes.

It all starts with investing in your employer’s 401(k) plan, if one is available. You’ll get large tax advantages, the money is automatically taken from your paychecks before you have the chance to spend it, and sometimes your employer contributes money to your account in what’s known as an employer match.

Perhaps most importantly, it allows you to compound money over time — and compound interest, if taken advantage of from a young age, can make you a millionaire.

As Bach writes:

The single biggest reason why paying yourself first into a retirement account at work is such an effective way to build wealth is that you make it automatic … Because this process is automatic, the chances are pretty good that you will continue doing it for a long time.

And by doing that, you will get to enjoy the benefits of a mathematical phenomenon most people don’t really understand but everyone can use to become rich — the miracle of compound interest. It comes to this: Over time, money compounds. Over a lot of time, money compounds dramatically!

To see just how much your money can compound, check out these charts. Or read about how one man is on track to accumulate just under $2 million by age 60 by maxing out his 401(k) plan.

4. You can build a fortune on a few dollars a day.

“The trick to getting ahead financially is watching the small stuff — little spending habits you have that you’d probably be better off without,” Bach writes. “Most of us don’t really think about how we spend our money — and if we do, we often focus solely on the big-ticket items while ignoring the small daily expenses that drain away our cash … We don’t realize how much wealth we might have if, instead of wasting our income, we invested just a little of it.”

He illustrates this idea with what he calls “The Latte Factor,” which basically says that if you ditch your $4 latte every morning, you’d have quite a bit of money to contribute towards savings — about $30 a week, or $120 a month. Over the course of a few decades, that money could grow substantially.

“Whether you waste money on fancy coffee, bottled water, cigarettes, soft drinks, candy bars, fast food, or whatever it happens to be — we all have a Latte Factor,” Bach writes. “We all throw away too much of our hard-earned money on unnecessary ‘little’ expenditures without realizing how much they can add up.”

To give you an idea of how much money you could have if you identified and eliminated your Latte Factor, he gives the example of making a $5 purchase (the average cost of a latte and a muffin) each day, which would cost you $35 a week and about $150 a month. If you invested that $150 instead, assuming a (very generous, admittedly) 10% annual return, you’d wind up with $30,727 after 10 years, $339,073 after 30 years, and $948,611 after 40 years, he explains.

Original article source courtesy of Kathleen Elkins of Business Insider.

A Simple Financial Checklist You Really Need

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bigstock-Young-Businessman-Checking-Mar-72052462When it comes to your fiscal health, things may seem overwhelming. There are so many different responsibilities and goals you have to keep straight to be truly on the right track. If you are struggling with this, just like with other overwhelming aspects and times in life, it is sometimes best to pause and make a list. You can often check in on your progress more effectively when you have everything in a visual format. Check out some items that should be on your list.

1. Evaluate your budget.

Almost as important as creating a budget, evaluating your budget can help you assess whether your money is still going where you want and in the amounts you intended. It also gives you the chance to make any changes based on your dynamic needs and goals. It’s a good idea to continue tracking your spending and adjusting any categories on your budget that are consistently lower or higher than you had estimated. This can help make sure you are on track for monthly and annual goals.

2. Contribute to retirement funds.

One of the ways to make sure you are preparing for your long-term future is calculating how much money you will need in retirement. Then you can focus on a collaboration of employer-sponsored and individual retirement accounts to save toward that goal while still meeting other goals. If possible, it can be a good idea to talk with your company’s human resources department and adjust your retirement account contributions so you can qualify for the maximum match available.

Set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings and retirement goals – contact us at 732.312.1500 or stop in to see us!*

3. Double down on debt.

Everything from your credit card debt to student loan payments can hang over your head and cause stress. It’s a good idea to create a plan to automate your debt repayments so you avoid late payments and don’t have the choice of paying them or not. It may be stressful, but it’s important to come to peace with your debt and feel comfortable with your debt-repayment plan. This can even include taking on freelance, part-time or odd jobs to make additional payments if necessary.

4. Work on your credit score.

Your credit score affects many financial decisions in your life from what interest rate you pay on a mortgage to whether you can rent an apartment. It’s important to regularly check your credit report, look for any mistakes, and work on some ways to improve your score. These include paying your bills on time, opening credit card accounts only as needed, paying off debts and keeping revolving credit low. You can check your credit scores every month on Credit.com to track your progress.

5. Update your insurance details.

From home, auto, and health all the way to life insurance, it’s a good idea to make sure your personal information is up to date and that you are getting the best deals possible. Some strategies you can employ include simply paying your premiums as due, asking your provider about reducing your rates, and making sure you have the coverage you need even as your life circumstances change.

6. Boost your emergency fund.

You may have heard this one before but it is a good idea to stash of three to nine months’ worth of expenses in an easily accessible place in case of a sudden rough patch. The exact amount you decide to tuck away to cover the emergencies will vary depending on things like job security, living expenses and streams of income.

It is important not only to be financially responsible, but also to make financial goals and work toward reaching them. Writing your goals and responsibilities down can help you be more accountable and make things easier to grasp.

*Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

Original article source courtesy of AJ Smith of USA Today.

3 Steps to Prepare Your Finances for a Good Year

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January is over and for many of us, that means New Year’s resolutions are almost out the window. But we still have most of 2016 ahead of us. Here are a few ways you can set yourself up for financial success this year and beyond.

1. Adjust your tax withholdings.

When it comes to income tax, the goal should be to come out even. On April 15, you don’t want to get a huge refund or a huge tax bill.

Getting a refund is exciting, and it’s not a bad way to accumulate savings. But remember, that means the government has held your money for the entire year without paying you interest. In essence, you gave the government a free loan. To avoid this situation, decrease the amount of income tax you have withheld by your employer.

If you’re in the other camp and receive a big bill, that’s another reason to revisit your withholding amount. In this case, you should increase the amount of taxes being taken out of your paycheck each month.

And if your life situation changes in the middle of the year — for example, you get married or divorced or have a baby — you should also take another look at your withholding amount.

2. Increase your 401(k) contributions.

Are you saving enough for retirement? Now is a good time to review your year-end 401(k) statement or pay stub and find out how much you contributed to your retirement plan in 2015.

At the minimum, you should contribute enough to qualify for your employer match, if you have one. If you have more money available, shoot for the maximum allowable contribution in 2016 ($18,500); if you’re over 50, set up additional “catch-up” contributions of $5,500.

Making these changes early in the year will ensure that you plan your monthly cash flow around your higher contributions. And if you wait until the middle of the year to adjust your contribution amount, you’ll have to save much more each month to reach your savings goal.

Have you had your financial portfolio reviewed lately? We invite you to set up a no-cost consultation with the Investment & Retirement Center located at First Financial to discuss your current finances and future savings goals. Contact us at 732.312.1564, email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com, or stop in to see us at any branch location!*

3. Review your employee benefits.

Check your company’s resources page to make sure you’re taking full advantage of the useful — and often free — benefits it provides.

Review your current benefit elections to determine what coverage — such as health, life or disability insurance — you have in place and whether it’s still adequate. Life changes — again, including getting married or divorced or having children — can be good reasons to adjust your coverage.

If you do need to make changes, ask about your company’s open enrollment period; this is often the only time you can make changes to your coverage, unless you experience a qualifying life event, like the ones mentioned above. On the other hand, you may change your 401(k) options on a fairly regular basis.

Pay close attention to your benefits. Incorrectly selected or overlooked benefits can cost you money.

The Bottom Line

Doing these tasks early in the year can help you commit to improving your finances in other ways during the rest of the year. So don’t wait — tackle these steps today to set yourself up for a financially successful 2016.

*Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

Original article courtesy of Anna Sergunina of NerdWallet.

8 Simple Ways to Stretch a Dollar

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Living within your means is the foundation of financial health. But, that’s easier said than done. If you find yourself in the red at the end of too many months, you’re not alone. “Sticking to a budget” is the No. 1 financial challenge for Americans, according to a recent GOBankingRates survey.

To get the best savings advice, GOBankingRates turned to the smartest money experts out there — the finalists of our “Best Money Expert” competition, we asked them:

“What are the best ways to stretch a dollar?”

In response, these experts delivered strategies to save more, spend less and make room in your budget for what’s really important. Click through to read their tips.

1. Go on a Spending Freeze.

Nicole Lapin, a consumer expert and New York Times best-seller author, shared this advice for those looking to get more out of their budgets: “Go on a spending freeze with your partner, colleagues, or best friends.”

To put this spending freeze in action, Lapin suggested looking for everyday ways to spend less, like staying in with inexpensive bottles of wine over heading to the bar, or hosting a clothing swap with friends instead of going on a shopping spree.

Lapin is a big believer in the power of friends to support each other in creating better financial habits. “Create a support system, and help each other,” she said. For example, if you really want to buy something but you have a savings goal, “save with a friend,” Lapin suggested. “She likely has something on her wish list, too, and it’s easier to commit to saving long-term if you go in on it together.” You can even up the ante, and “create a friendly competition around who is doing best at cutting expenses — think ‘The Biggest Debt Loser,'” said Lapin.

You’ll see big results as you work to curb overspending, but a strong support system is key. “As money issues become more intense, a like-minded community will keep you sane and moving in the right direction,” Lapin said.

2. Stop Mindless Spending.

Tony Robbins, a business and life strategist and bestselling author of “MONEY: Master the Game,” said that stretching the value of a dollar means spending it on what will add the most value to your life.

“Focus instead on the returns you’ll reap tomorrow,” Robbins said. “Often you can have the same level of enjoyment, if not more, by doing something simple.” For instance, if you’re getting together with friends, why not skip the $50 restaurant meal and “order in a couple pizzas and beers and split the cost among your group?” Robbins suggested. “Trade one good time for another, save yourself about $40 each time out, and you’ll be way ahead of the game.”

While saving $40 at a time doesn’t sound like much, this kind of mindfulness adds up. “[Save $40] once a week, and put those savings to work, and you could take years off your retirement time horizon,” Robbins said. That $40 a week adds up to $2,000 a year, which you can use “to harness the power of compounding and help you to realize big, big gains over time.”

“How big? How about $500,000 big?” Robbins said. “That’s right, a half million dollars. How? With the power of compounding at 8 percent over 40 years, that $40 weekly savings — $2,080 per year — will net you $581,944.

3. Always Be on the Lookout for Savings.

“Always look for a way to save, and don’t let saving opportunities pass you by,” said Jeanette Pavini, a finance reporter and spokesperson for Coupons.com. Pavini makes it her mission to help readers find easy and simple ways to save a little everywhere they shop. “There are so many opportunities to save out there, and it typically only takes a nominal amount of effort to take advantage of them.”

“In fact, I almost never make a purchase without applying some type of savings,” Pavini continued. “For example, buy a box of cereal on sale, apply a coupon from Coupons.com, get 2 percent back in credit card rewards, clip the box top so 10 cents goes to my child’s school, and use my grocery store loyalty card so I get points toward gas saving. One box of cereal — five different savings strategies.”

4. Try Envelope Budgeting.

For those who have trouble sticking to a budget, “I recommend that on payday, you take out the dollar amount you need until the next pay period and split it up among your envelopes,” said Clark Howard, host of popular nationally syndicated radio program “The Clark Howard Show.” “When one envelope empties, you either take money from another envelope or you do without until next payday.”

Moving to a cash-only system can help you cut spending and get in the habit of more carefully considering purchases. “Debit cards and credit cards can be the Bermuda Triangle of your wallet because it’s so easy to lose track of finances when you use them,” Howard said.

If you’re more high-tech, Howard said you can try a method invented by his executive producer, Christa. “She hit on the idea of putting money into different accounts for different purposes,” Howard said. “Today, she has three checking accounts and one savings account.”

5. Stack Discounts to Lower Your Grocery Bill.

Kyle Taylor, founder of popular personal finance blog ThePennyHoarder.com, gave this personal finance tip to families looking to stretch their dollars: “Groceries are often one of the largest expenses for families, so it makes sense to start here when you’re looking for ways to cut back.”

For true savings, Taylor’s advice is to look beyond the obvious. “We all know about couponing, but saving money is way easier when you know how to stack discounts.” Instead of settling for using just a coupon to save, you can combine that coupon with other savings strategies to cut your grocery budget down. “Utilizing an all-of-the-above strategy has helped me reduce my grocery bill by more than half,” Taylor said.

A favorite tip that Taylor uses is buying discounted gift cards from sites like Raise.com, which includes cards from grocers like Kroger, Whole Foods and Target. “These gift cards are sold for 1-25 percent below face value, meaning that I’ve saved money before ever stepping into the grocery store,” Taylor said. “I stack those savings on top of my regular coupons and then combine it with grocery rebates from apps.”

6. Get More Money Flowing In.

Of course, the advice to “spend less than you earn” is an equation that has two parts — how much you spend and how much you earn. Entrepreneur and performance coach Josh Felber has made it his mission to help people achieve success by following their passions, and in his view the best way to approach the “spend less than you earn” equation is to focus on the second part.

Instead of trying to stretch dollars, “always have a consistent flow so you don’t have to stretch,” Felber said. There’s a limit on how far you can cut your spending — everyone needs to cover the basics. But if you focus and invest in earning more, there’s no limit on how much your income can grow.

7. Put Your Money to Work.

Another “Best Money Expert” finalist, Robert Kiyosaki, emphasized the importance of getting more out of your money. “Invest it,” said the entrepreneur and author of “Rich Dad Poor Dad,” the self-proclaimed No. 1 personal finance book in the world.

Investing is the key to achieving true financial freedom. “Put your money to work for you … instead of working for money all your life,” Kiyosaki said.

8. Negotiate.

To truly stretch a dollar, never accept an initial price or offer. Whitney Johnson, an investor, innovator and author of bestselling book “Disrupt Yourself: Putting the Power of Disruptive Innovation to Work,” said that you should “negotiate, even when you think you shouldn’t.”

Negotiating is one of the best ways to make sure you’re getting the most value for your time, money or other resources. Johnson suggested following this advice, or “else you will earn too little or spend too much.” Fail to negotiate, and you’ll lose out on dollars you could have saved or bigger paychecks you could have earned.