my finance matters

Building a Budget

Jul 10

Posted by sue in Personal Finance | No Comments

First off, I like the word budget. I don’t call it a “spending plan” because that’s not what it is. You account for both income and expenses in a budget. And this is my website, so I can call it whatever I want. Bwahaha!

Anyway, creating your first budget is going to require a bit of patience and organization. First you want to gather as much information as you can about your past expenses. If you pay all of your bills online, this should be relatively easy. Or if you use the carbon copy checks, have those out too. I’m a big fan of online banking, so go ahead and get all that up on your screen also.

I’m a serious number nerd, so I love spreadsheets because I know how to manipulate them to show me what I want. If you’re not so great with Excel, just use some notebook paper and a pencil. Now the easy part is putting your income up at the top of your spreadsheet or work paper. Make sure you use your NET PAY so you don’t think you have more money than you really do.

Now for the scary part, the expenses! Here’s a template you can use if you like spreadsheets.

I like this one because it has two columns, one for projected and one for actual income and expenses. Its in a nice one page format also, so you can post it on the fridge easily If you’re going the manual route, you can print this out and pencil in your numbers. Since it accounts for taxes and health insurance, you’ll want to use your gross pay up top. There are some numbers already filled in, so make sure to delete those.

Now, its going to take a few months to get used to this, but trust me, once you see where all your money is going, you will feel more in control and like you can actually do something to change it. When your money just magically disappears out of your checking account every month, don’t you feel confused and somewhat helpless? Then you get mad at yourself for not taking charge of your finances. It always ends with something negative. You might buy stupid stuff like I used to do to make myself feel better, only furthering the money woes.

Don’t give up, you now have the power to put yourself on a positive financial path. Just give it some time, and you will begin to see what you need to do to make it happen, cap’n!

Tags: budget

Weekday adventures

Jul 8

Posted by sue in Personal Finance | No Comments

On Monday evening, I was totally that girl, wandering around Wal-Mart with my calculator! Why? Because I only had $60 cash to spend, and an empty fridge at home. We ran away to Vermont, and admittedly went a little over board on the spending. Its my own fault though, I didn’t have a good spending plan in place, or even thought of.

Now, I’m getting back on track, and using up as much as I can from the pantry. Sometimes, its a good thing I have hoarding tendencies

Back to Basics

Jul 3

Posted by sue in Personal Finance | 2 Comments

The golden rule of finance is to spend less than you earn. Well, yeah! But how many of us does that really apply to? The ones just starting out on their own, without the burdens of debt.

Most of us, however, skipped straight to the “real world”, accumulating debt in the form of student loans, car loans, and credit cards. Credit was easy to get, and the “pay for it later” mentality prevailed. So what do we do now? The damage is done and the debt is mountainous, we must take action!

Step 1. Make yourself a budget. I’m a budget Nazi. There are many ways to accomplish this task, but you must at the very least, write something down. I use the word budget, but this is really just getting everything down on paper or spreadsheet. Write down what you think you are paying on a monthly basis. This will take some time, don’t get discouraged if you can’t find the last water bill, just estimate for now. Did you notice there’s a gap between income and expenses?

Step. 2 Keep track of every penny you spend for the next month. Whether you pay cash, check, debit or credit card, get yourself a little notebook and write it down. Yes, you will look like a nerd, just do it. I guarantee you, you spend more than you think you do.

Step 3. Go back to your budget and fill in the real numbers. This is going to be painful, but it will answer the question of why your credit card balance never seems to go down, and why you never have anything leftover to put into savings like you keep meaning to.

Step 4. Get Real! You know something has to change, that’s why you’re here. Look over your budget and see what you can change right now to put you on the path to financial freedom. But for goodness sake, be realistic. The financial wizards love to use the example of cutting out that morning coffee at Starbucks. Sure cutting out your $3/day habit can save you $15 a week but is that going to make a big enough dent? Don’t deprive yourself of things you enjoy, rather, pare it down a bit. Meanwhile, tackle something big enough to give you the boost you need to jump start a new, leaner budget. Remember that money is largely psychological, use this to your advantage. Make a game out of it!

Step 5. Revise and memorize your budget. By this point, you know where all your money is going. Now its time to make a plan of action. Whether you want to be debt free, or have enough stashed away to retire at 50, you’re going to need a map for your journey.

What would you like to hear about next? How to make a budget or cutting expenses?

Tags: budget, credit, debt

Ideas, suggestions wanted

Jul 1