Author Archives: Common Cents

Eliminate The Unnecessary Items

Slicing the budget is necessary.

I know we’ve all been there….out shopping and something catches your eye, and next thing it’s in your cart. I know, because I’ve done this too.

But if we make a conscious effort not to put the item in the cart, if we play little tricks with our minds such as, if I think I still want/need the item in a week, then I’ll come back and get it…. I’m sure you won’t be back for it (you may not think of it again).

This eliminates spending on the cost of the item, and you can save that money instead.

Always remember to pay yourself first.

After allotting money from your take-home pay for necessities, then set aside money for savings. Incidentals come last, if at all.  Learn to live frugally, at least for a while until you get in the swing of sticking to your budget.  Once you get caught up with outstanding debt, and are in complete control of budgeting, then maybe you could get a treat.

Successful budgeting will become as easy as breathing. I promise.

Begin By Getting Out of Debt

New Year, New Beginnings…

Start the year off right by making a plan to get your finances in order so that you will be debt free and on your way to saving for your future.

List all your recurring expenses: rent/mortgage, heat, electric, phone, auto loan, food, health/dental/car/home insurance, etc.  These should be ONLY the necessities. Next to each one, write the amount needed on a monthly basis.

Then list all of the incidental expenses:: doctor/dental co-pays, gas and needed car expenses, gifts, clothes, hairdresser, entertaining etc. Next to each one, write the amount needed on a monthly basis.

Now write your monthly take home pay amount, under it write the amount needed for necessities, and subtract that figure from the take home amount.  The remaining figure is all you have for incidentals you’ve chosen.

Big question:  Where does savings come into play on your list??????

Did you even consider savings……. paying yourself first???

You should always pay yourself first….it’s the only way you’ll consistently save money for your future.

Make a budget that you can stick with, and pay yourself first.

 

How Did You Do Budgeting This Year?

So, did you pass or fail on budgeting?

It’s the last month of 2023.

Have you stuck to your budgeting??? I hope so. But if you slipped up a month or two that’s expected, as it’s a learning process. It’s also a habit you want to get into, so it will become automatic every month from here on in.

And, next year you’ll be even better…… I’m sure of it.

Check your bank statements, IRA accounts, and they should show a profit benefiting you and your future.

Check your credit card statements, and they should (hopefully) show a zero balance, meaning you’re no longer a slave to finance charges and late fees.  It also benefits your credit score, which in turn  benefits your ability to take out a loan if needed at a lower rate, or get a lease on an apartment before someone with a lower score than you.

Knowing you have no credit card bills hanging over your head, and that you have a retirement account started, funding your future, and an emergency account should the unforeseen happen, leaving you out of work for a time, you’ll know there’s money there to pay the bills until you’re back working. And your emergency account for when you need new tires, or a plumbing issue resolved or some other calamity in your life…. the money you set aside for such things is right there to B care of that bill too.  These things equals less stress and more peace of mind which in turn equals better health.

So…kudos to you!

And in 2024 you’ll be even better at budgeting!

Best wishes for a Happy Holiday Season!

 

Streamline Your Budget

Purge.

Time to Spring clean.  That includes your budget….especially your budget.

Start with a list of the ‘have to haves’…. Rent, Utilities, Car expense, Insurance(s),  Food, Medical. You get the idea…… Anything else goes in two different columns.

The first column is for Saving. That means three different ‘boxes’…. Emergency fund, which should hold about $1,000. (more if you can).  This means, a plumbing issue, new appliance, set of tires etc….. Again, you get the idea.  This is so when you have an ’emergency’ issue come up, you have the cash to get it fixed asap.

The second ‘box’ is for Replacement Income, which should eventually hold at least 6 months of your take home income. This stays there for such a time when you have a medical issue with no more sick time, or when you get laid off, or when you have a new addition (or an elderly person) that needs you to be there for their care, etc.  Again…. you get the idea.

The third ‘box is for Retirement Fund….. it’s name says it all.  The more you ‘store away’ for that time in your life, will represent how you are able to spend your retirement years.

So,……. get started shaving the ‘wants’ off your budget.

My mantra is ‘I make myself rich by making my wants few’.

 

 

New Year / Same Rules Apply

Save! Save! Save!

If you haven’t already, today is the day to start…… Pay. Yourself. First!

Before you start to do anything with your paycheck, take out…. hopefully 10% ….. as much as you possibly can. Put it away, and don’t touch it.

If you can’t save 10%, then save whatever you reasonably can. A reasonable amount for you might be different for someone else.  The idea is to save something. Every. Single. Paycheck.

If you have outstanding debt, then pay that, but save at least $10.  The idea is to save and not to touch it.

If you do have outstanding debt, then you’re obviously spending more than you make.  Redo your budget immediately.  Leave out all the coffee and lunch stops.  Make those things at home. Stop entertaining for a while until all your debt is down to zero. Use up what you have handy, and stop buying online or at stores.

Rid yourself of debt. Your credit score will go up and you’ll free your mind / life of clutter and stress.

Start the year off right financially.

Save.  Every cent counts.

 

 

What is the Rule of 72??

How fast can you double your savings?

The “Rule of 72” will give you a quick answer to that question.

If you put your savings into an account which pays a consistent 3%, it will take you 24 years to double your savings.

How to figure The Rule of 72:  ….. example….. If you’re getting 3% interest on your account, divide the 3 into 72 and the answer is 24 ……. 72 divided by 3 equals 24

So, when you’re saving, try to find the account(s) that pay the most interest. This, however, is hard these days, as interest rates on savings accounts is practically nil.

The idea is to keep plugging away and save all you can. Remember to always pay yourself first! Because if you neglect to do that every so often, it will sadly become the ‘norm’, and you’ll stop doing it altogether.

And the realization is that it is often a struggle to do this, but in the end, when it comes time for you to retire, you will have a cushy nest egg to use for things you’ve put off doing for years.

Think of it as a gift you give yourself.

 

 

 

Start Early and Save Save Save!!!

Every penny saved is common sense.

The one regret a lot of people have is that they didn’t start saving early.  Another one is that they spent foolishly…. on things that were just a whim or completely unnecessary.

If you fall into this category, start now…. change your spending habits and save every cent. For at least a while, live frugally…. or possibly live frugally from now on.

Stop grabbing a coffee on your way to wherever…. fill a travel mug with coffee made at home.

Stop buying snacks and lunch out…. pack a lunch of leftovers to reheat at work, or make a salad or sandwich to bring along. Add a few cookies or other dessert and a take along bottle of water.

Stop buying snacks at the grocery store…. at about $5. a bag, and mindless dipping into the bag, snacks become pricey.  Instead cut up vegetables, carrots, peppers, cucumbers, tomatoes etc or make popcorn. These are not only cheaper but better for you.

Cut down on gift giving.  As nice as it is to give and/or receive gifts, it can get out of hand. Decide on, and stick to, a price limit (or forgo the gift giving altogether.  There will be those who may audibly sigh in relief that ‘someone’  started the ball rolling in that direction.

Cut back on entertaining….. or …. have each person bring something for all to enjoy.  Sometimes a ‘theme’ can be agreed on, such as a potluck dish or Italian, or Chinese, or just cheese and crackers and wine. Each person/couple bring enough for themselves and then share all.

When grocery shopping, don’t go when your’e hungry…because you’re apt to buy snacks etc you don’t really want/need.  Check for mark down bakery, produce and other sundry items… if you don’t see them, ask the manager.

These are but a few of ways you can save on unnecessary/careless spending.

And remember,…. Save something from every paycheck….. hopefully 10%.

 

 

Just Landed Your First Job??

Important tips to use from now on….

Congratulations!  You’ve been hired and are now in the workforce earning your own money for a job well done.

The following tips are each very important on their own and can, and should, be continued to be followed all throughout your working years….right up to retirement. And  as a whole is good solid advice which will over the years save you time and money.

Whether you’re paid directly in cash, or a check where you cash it at your bank, or have it direct deposited, the advice is the same.

First and most important……   Pay.  Yourself.  First.

That means, however you are paid, and whatever you are paid, save something, hopefully at least 10%, for yourself…… not to spend, but to put away in a savings account and kept and added to each and every time you get paid.

The next is to save your W2 slips from each year you work, and from each job you work….. if you work one job, save one slip (each year), if you work 2 or 3 jobs, save 2 or 3 slips etc.  Just keep them in a folder or some filing system you may have.  They are proof you worked and contributed to your future Social Security and Medicare taxes.  If they, for some reason, don’t have a record you worked a particular job, you can, using your W2, show proof you did… and raise your Social Security income for that working that job.

If you have a charge card, use it diligently.  That means….. do not purchase anything you can’t pay for when the bill comes due.  The idea is to pay your charges in full and on time each month.  If you don’t, you will quickly, very quickly, fall into the financial debt hole which can and does take years and wasted money paid by you to climb out.  Don’t do that to yourself.

Again, congratulations!

 

House Hunting?

Tips on the hunt process….

Houses are very pricey, and while you’ve been saving for quite some time, it may seem like you’ll never get that dream home.

However, if you shuffle your priorities a bit, such as looking for a smaller home, or one with not such a big yard, or maybe even out of your comfort zone a bit, you may just come across a home that will turn out to fulfill that dream.

You might need to put 2 children in one bedroom, or forgo that finished basement, but the idea is to set some priorities before you search.

You may have wanted one of the ‘warmer’ climate states because you want the ocean nearby, but if you look at one state over, you can always vacation near the ocean.

The idea is to do your homework as far as making a definitive list of ‘needs’ as opposed to ‘wants’.

The smaller home in a different area might just turn out to be that dream home after all!

 

Life Insurance

How much is too much??

We all should have a life insurance policy which will cover the cost of our final expenses.  If you are married and have children, you should have enough insurance to cover what would be your income for at least a year and maybe more if your spouse is unable to work because there are small children to care for.

So, it would be wise to decide if you want to be cremated or buried (burial needs a cemetery plot), and if you want to have a wake and a church or memorial service.  There is a large difference between being cremated and having a small memorial at someone’s home, as opposed to being embalmed and having a wake, church service, burial at a cemetery and a brunch at a restaurant. So, think about what you want and do some checking on pricing at nearby funeral homes as well as cost of burial plots.

If you are single and think you will remain so, then a policy which will cover your final wishes as well  as some extra for the beneficiaries you chose as they will be doing all the work involved with the arrangements for you.  The idea is to not have them pay out of their pocket for anything.

In choosing beneficiaries, make sure they know your wishes and that they are your beneficiaries. At the very least, tell them the name of the insurance company where your policy is.

Regarding accidental death insurance……  This is a separate policy which is usually reasonably priced but it would only cover you if you died from an accident.  If you died from natural causes or an illness, it does not cover anything. It will just lapse at your death.  No one benefits unless you die of an accident.  You may want to consider this if you have a spouse and or family. You’re betting you’ll die from an accident.

And some have accident insurance which covers not only some of the medical bills should you be in an accident, but also covers a small accidental death policy within the accident policy should you die from said accident.

You can always add to insurance ‘down the road’ if your status changes and you need more coverage.

Whole life insurance is just that…. you pay premiums your whole life.  There is a 20 payment life policy which as the name implies, you pay annually for 20 years and the policy stays in place for your life in the amount you chose.

Term life insurance is a policy which covers you for a term of life……  You may choose term until age 75, and pay each year until that age.  If you die at 75 years and one day, there is no payment to your beneficiaries.  But if you die a day before your 75th birthday, your beneficiaries will get the amount of the policy…..(you’re betting you’ll die before age 75).