Not Paying All Your Bills In Full??

Then you’re spending too much!

Common sense……

So the plan should be to scrutinize your bills, see where and then what can be lessened, or possibly eliminated from the budget.

I understand prices have rocketed up in all areas, so you need to get creative with the money you get each payday.  List everything, and I do mean everything you spend your money on. ….and then start chopping away at each item.

The easiest ones to chop are the cable bill….. almost everyone has a mobile phone, so do you really need the landline? And, yes, they give you a ‘bundle’ price, but that’s their ‘come on’ to spend more.  Instead, keep the internet only, and get an antenna and set up for free tv, and then get one or two streamers. This cuts a huge chunk off the spending.

Another way to cut back is to stop eating out and getting take out. Instead, cook at home. This, even with the higher cost of food these days, is still cheaper than eating out.  Not a cook?  There are easy recipes online.

When doing errands, make a list of where you need to go, and make a circle of taking care of them, starting at home, and continuing on while you go from one to the next and home again.

I’m sure there are others you can think of that pertain to your budget.

And don’t forget to still save something each week.

 

FREE…… is a good word.

Don’t add expenses if you can get it free.

Banks….. they now have fees for just about everything. Do. Not. Pay.  Instead…. choose another bank. After all, you are allowing them to ‘use’ your money when you open an account.  And, yes the interest rate these days is pretty close to ‘0’, but every penny helps.  So, if they have fees for ‘minimum balance’, or have limits on withdrawals or ATM transactions. Choose. Another. Bank. There are many banks that have no minimums, no limits on transactions, or any other ‘usage’ fees.

That said, if you overdraw on your account, well, that’s different. You absolutely need to keep your accounting up to date and correct.  Use a check register… at least as a back up. Review your addition and subtraction figures.  Keep your balance up to date and to the penny.

Charge cards…..  Use these only if you are diligent in paying off the entire balance when the bill comes in.  This means you will never pay finance charges on outstanding balances. And pay before the due date. This means there will be no hefty late fees.  Also, choose a ‘no annual fee’ card.

If you use your credit card as noted above you will be ‘using’ the banks’ money for a few weeks each month…… without paying to ‘use’ it.

The idea is to hang on to as much of your money as you possibly can.  It’s doable.

 

Be A Penny Pincher

Every penny counts….. it’s common sense!

Save.  Save.  Save….

Be frugal…… and though some may find that to be not a good thing……  It is!!!!!

Inflation is staggering.  Everything has risen in cost to us, so the alternative is to penny pinch.  Do not buy what is not truly needed.  There are some obvious ways to save…… no eating out with the exception of maybe birthdays or anniversaries.  Stop take out meals as well as coffee stops.  Meals (and coffee) made at home are far cheaper.  Do this for a month and see the difference in money remaining in your budget at the end of the month.

With gas prices so high, make a list of errands and do all in one trip, stopping at the grocers, bank, library, gas station etc.

Cut out the cable…… there are so many things to stream these days (and with so many things to see) that with just 2 streaming companies, there will be more than enough for the whole family to enjoy.  And most everyone has a mobile phone, so what is the reason to keep the landline?…. the ‘bundle’ they use for that excuse is a very costly bill for you (with numerous stations you don’t watch….ever!  So cut the cord with the cable company. The internet is needed, so only get that.  The bill for just internet and 2 (or even 3) streaming services is far less than your cable bill.

Don’t waste food.  Eat leftovers…. or freeze for another night you’re pinched for time cooking.

Cut back or out of gift giving……. Most people will be fine with that, in fact grateful you made the suggestion.

These are only a few of the ‘Common Cents’ things you can do during these times.

And don’t be fooled by those who say that prices will go back down……..   It just won’t happen!

 

How’s The Budget Going???

Are you paying yourself first???

We’re almost halfway through the year and, hopefully, you’ve been staying within your budget, paying all your bills on time, in full, and……Saving!!

Probably the first savings account to have ready is the ‘Emergency Fund Account’….. this is self explanatory.  If an emergency arises, you’ll have the money set aside to pay for it without trying to add it into your budget.

The next two savings accounts sort of go hand in hand….. The 6-9 month (eventually 12 month) Reserve Savings Account and the other is your Retirement Account(s).

Again self explanatory….. the Reserve Savings Account is there should you be out of work for an extended period of time with no income.  If you are on either workers comp or unemployment benefits, then this account is there only as a supplement to that and used for the gap that they don’t cover.  It is not for entertainment or take out etc….. just for necessities.

And the Retirement Account(s) are set aside now….for the future…. when you are no longer working.  Most can’t be touched before 59 1/2 years of age.  So until that time, they ‘do their thing’, gather interest, gain in profit etc.  At age 72 you’ll need to begin taking your RMD (Required Minimum Distribution), required by Uncle Sam….he wants his share.  If you neglect having this set up and taking the minimum out, there will be a stiff penalty and additional taxes to pay.

So, staying within your budget is imperative, as well as saving as much as you possibly can.

It’s Common Sense !!!!!     Save every cent you can!!!!

Thinking of Purchasing a Home?

What you will need… and need to do…..

Purchasing a home is probably the most expensive thing you’ll buy in your lifetime.  So you want to get it right.  You may, and probably will, sell the home and buy another although some really do stay in their first home for their lifetime. So…..

You will need 20% of the price of the home for the down payment… anything less will mean that you will pay a monthly premium for mortgage insurance (so better to put it towards your principal).  If you put down less than the 20%, the mortgage insurance premiums are paid until you’ve reached that 20% figure.

You will need closing costs…. this is a few to several thousands of dollars depending on the cost of the home.  This covers a home inspection (to your advantage), because they can usually find a problem or potential problem that alerts you to costs of repairs down the road. The closing costs also cover Registry of Deeds cost, as well as lawyer fees (a reputable lawyer will see that things are done right).  At the time of closing tell the lawyer that you want a Homestead Act in place….. this is a document that for the cost of about $35. – $50., your home will be protected from anyone trying to sue you. It’s an imperative, yet inexpensive document to get and keep in a safe place.

You should also have about $1,000. and up for redecorating or repairs and yard equipment such as a lawnmower, snow shovels etc.  After all, you want to keep your curbside appeal.

The best thing is to stay in your home for at least 5 years before you should move again, as  relocating and starting over is costly.

You should also have a lawyer draw up a Revocable Real Estate Trust.  No one has a crystal ball to the future and anything can happen at any time, so be prepared….

A Revocable Real Estate Trust will, should anything happen to you, allow the home to transfer smoothly and privately, without going through Probate, to whoever you choose and name in the Trust. This will cost less than $1,000. and it will give you peace of mind.

 

 

Read this before shredding paperwork

What to toss / What to keep.

We all like to get rid of excess paperwork. But…. before you do read this….

Always keep: 7 years of tax records — both State and Federal, keep all W2’s from your employment history (one for each year, but if you worked 2 or 3 jobs in any given year, keep those 2 or 3 as well.) —- These are proof that you worked and contributed to the Social Security Trust Fund and will be your proof should there be a discrepancy when you apply for Social Security.

Keep…. Originals of Birth Certificates, Adoption Records, Name Change records, Marriage Certificates, Divorce court records, Divorce NiISI, Social Security Card, Health Insurance card, Medicare card,

Keep….. Car records, Purchase slip, payments records (when car is paid in full, keep first and last payment stubs. Keep the Title (you can’t sell the car without it). It’s also a good idea to keep any payments made for work done on the car, such as the upkeep of oil changes, and any parts that were needed and replaced.  This shows a record of good upkeep of the vehicle.

Keep….. Mortgage records…. payment statements, and keep (don’t burn). that final payment statement … people did this years ago, they’d ‘burn the mortgage’. !!!!   Keep it…. it’s called the mortgage discharge.

Keep…… the W2 statement from each year you worked.  Also the final pay stub from each job you worked in each year you worked.  This shows proof when you apply for Social Security.  They will have a record, but sometimes there is a discrepancy, and having these slips shows proof of your employment.

Keep….. any Retirement Funds records, and the final bank statement from the current year.

These should all be kept in a safe place.

 

Turning 18???

You are now ‘Legal’ …..

Turning 18 is an exciting time for most…… You have graduated or will soon graduate from high school and for those who will be starting college there will be (or have been) tours of college campuses and choices to make.

You may have received one or more scholarships to help defray the cost of your college education. Or, the cost may be yours to pay.  At 18 you are now responsible for your own debts.

Signing on the dotted line means the debt is yours to pay…. so getting a loan at the lowest interest rate possible is a must.  There will be specifics….. length of loan as well as monthly payments and due dates…. It is imperative that you adhere to the payment schedule so you won’t fall behind and then have more debt in the form of added interest charges and late fees.

Those who opt to forgo college and join the work force should begin a budget to take care of any expenses.  Do not….. i repeat….. do not buy what you can’t afford to pay when the bill comes in.  Doing this will get you into a financial hole which can take years to crawl out of.

Which ever path you choose, choose wisely.  And begin right away to pay your debts on time and in full so you will never incur added debt.

 

Saving For A Home?

The bigger the down payment the smaller the mortgage payment….

The idea is to put at least 20% of the cost of the home on the table as your down payment.  The reason for this is that anything below that 20% means you’ll need to pay “Mortgage Insurance” to the lender until you meet that 20% figure.  The reason for this is so that should you default on your payments, the lender can recoup at least a portion back.

So…… Put down at least 20%….. more is better because the more you can put as your down payment, the lower your monthly mortgage cost per month (for the length of the loan).  So this is clearly better.

Remember, once your mortgage figures are set…. principal and interest….. those figures will not rise (or lower) as time moves forward.  Your real estate taxes and insurance may fluctuate a bit each year (these figures aren’t set by the lender).  The whole payment is PITI …. principal, interest, taxes, insurance…… and mortgage insurance if your down payment was below 20%.

Once your loan is established, you can always put extra money towards your principal only. This will not only pay your loan off quicker, but it will save money in interest payments as well.  So this is a very good idea.

You can also pay bi-weekly (every 14 days), which is free to do (just a phone call to your lender to set it up, and it will save at least 2 1/2 years off the length of your loan, but also save you thousands of dollars in interest payments…… a no brainer!  The extra full payment each year goes in it’s entirety towards your principal payment…. this includes the TI (taxes and insurance) part of your payment.

Any time you’re paying extra towards your principal, always tell the lender to put the payment towards “Principal Only”.

 

A Cash Windfall For You??

How would you handle a cash windfall?

First, do not….. I repeat…… do not let it fall through your fingers!  You will regret being foolish.

So that you know where you are with paying down your debts, put the windfall into a new checking account.  Doing so will allow you to see at a glance your payments towards those debts and also how well you’re doing at getting them all down to zero.

Make a list of all your debts….. every one of them…… then put them in order of amounts with the smallest amount first, largest last.

Next check the interest rate you’re paying for each, and put those in a second list with the highest rate first.

Pay the smallest debts first to get them completely off the list(s).  And don’t use that institution again.

Now, call the other institutions to see if you can lower the interest rate on your account and ask if they’ll work with you to pay it off quickly.  Also ask if there is any pre-payment fee…. most will say no, but it’s best to ask.  There is no need to mention to them that you’re working with other debts.

Have them direct withdraw the money from the new checking account….or you can write a check (but be disciplined each month and don’t be late with the payment).

Once your debts are paid off, and your debt free, put what is left in savings and continue adding to that savings on a regular basis.

Remember, ALWAYS pay yourself first!!

 

Prioritize Your Bills

First things first!!!

It’s very important to prioritize when paying your bills.  If you don’t, it is not only foolish, but costly in so many ways.

The first thing to do is write down what your total income is….. then make a list of your expenses….. all….of….them!  Now, put that list in order or importance…..

Rent/mortgage, food, utilities, medical, car payments, insurance(s), etc.  The order is important because you need a roof over your head, you need food, and warmth and light. You need to stay healthy, and have transportation to/from work. You need car/life insurance.

Most anything beyond that can be either cut down or eliminated completely.

But……. out of the amount of money that is remaining, the first thing is to SAVE!!! SAVE!!! SAVE!!!

Set aside savings first, then if any ‘fill ins’ are needed, they come last.

If you neglect this method of budgeting, you will find that you will be overspending, on things you do not need, things that you can live without.

Learn to be frugal……. you won’t be sorry.  Do this for your family, for yourself.