Checks and Balances…..

Hopefully, you were able to eliminate all (or at least some) of your outstanding debt. Doing so will bring your Credit Score up, which means that you are more likely to qualify for a car loan or mortgage, or secure that apartment before someone with a lower score does.

And, of course, …… you have peace of mind knowing that your bills are caught up and you don’t have those dreaded balances and finance charges to deal with any longer.  A good feeling.

Kudos to you if you’re all caught up…. with zero outstanding debt on your credit cards. And if you’re still whittling them down, keep doing that…. they too will be a zero balance.

Now is a good time to skim over your budget. Tweak anything you can so that you can put more into your savings…..

Remember to keep your savings accounts separate so you can easily check to see what is in each and where you could add more.

You need that Emergency Account…… at least $1,000.  But preferably $2,000. or $3,000. to cover any emergency that may arise (and they do)…… If it’s there, you don’t have the added worry of “How am I going to pay for that???”  If you do have to use it for an emergency, remember to replace it as soon as possible so it’s always available.

The 6 – 9 month Income Reserve Account……  It may sound ominous, but it can be done….. because if you are suddenly out of work with no income, this is the account that will see you through until you can get back to work.  It will cover only the absolute necessities…. rent/mortgage, utilities, medical, car loan, food…..   no take out, or eating out, no entertaining, live on what you have and live frugally.  You will be glad you did. And this would have to be replaced if it were needed…… so replace any portion of it that was needed as soon as possible.

The Retirement Account….. put as much as you possibly can ….. maybe 5% of your income into an IRA, a Roth, or some other type of Retirement account so it can stay there and gain interest until you retire, or at least age 59 1/2.  This is crucial as you can only depend upon yourself for your retirement income as Social Security may not be available for you.

How well you budget will show up on the totals of these accounts.  You work hard for your money, so don’t waste it spending frivolously.

How you can cut back on gift giving…..

To give and receive a gift is always nice…. it shows the recipient that you appreciate them, what they mean to you, or your appreciation for how they’ve treated you are some.

To receive a gift is a good feeling because it shows how someone appreciates you.  This is all good…… but can be expensive.

Add up all the gifts you give during the year,…. Birthdays, Christmas, Weddings, Showers, New Home, New Baby, Anniversaries, and the list goes on. And, as nice a gesture as it is, it can, get out of hand.

So, don’t pretend you can keep up with all this…… it will put you into debt.

The better plan is to cut back.  Be the person that starts the gift giving conversation with family and friends…. and, surely there will be some sighs of relief it was brought up.

Some ideas are to do a grab at Christmastime….. With an agreed set price point for a gift,  put names in a hat….. each of those who want to, and can, put their name in and draw a name from the hat.  Then, buy a gift for that person only.  This can also be done long distance….. with one person who will add the names to the hat and with a list in hand, draw a name, writing the drawn name next to the first on the list, then the second and so on.  Then either get together, or mail the gift to the recipient.  Each person gives and gets a gift!

Birthday gifts can be  given up to the age of 18.  And children’s parties can be limited to special friends of the child rather than the whole class.

Wedding, showers etc can be given, but set a price limit for each. And Anniversaries can be a nice dinner out.

And remember, its’ always nice to call and wish them well on the special day, or send a card for the occasion….. The idea is to remember the day, and enjoy the giving….. not to worry about how you’re going to pay for the gift.

If you ever wanted to be the boss…. now is the time.

You are in charge of what and how you spend, and how and how much you save.

How you do this, how well you do this will matter down the road when you retire.  So, the sooner you start and how you handle your budget matters greatly.

Set up a workable budget…. and stick to it.  As soon as you find you’re sliding off the budget, find out where, fix the problem, and get back to strict budgeting.

Budgeting means first setting aside income for necessities …. savings, rent/mortgage, insurance(s), food, medical, utilities, car loan etc.

It, however, does not mean eating out or take out (home cooking is far cheaper), or entertainment costs (drinking, movies, etc).  You can still entertain at home with some relatives/friends where they each bring something for the menu.  This will, surprisingly, be as much, and usually more fun than going out on the town.

Cutting back on gift giving (or at least the amount of each gift), will bring a sigh of relief to most. Maybe a grab, where a price is set for one gift. Each person gives and gets a gift at far less expense than a giving a gift to everyone.  All this is easy and doable.

Avoid late fees and finance charge fees on your credit card(s) by only buying what you know you can pay for…in full…when the bill comes in.  The fees you’d pay on a credit card is money that could be put into your savings accounts…..

These are only a couple of ideas, and surely you can add more.

Pay yourself first…… Set money from your income aside for savings….. an Emergency Fund, a 6 to 12 month Reserve Fund (should you be out of work),  and a Retirement Fund(s).

If you pay yourself first, you will always be sure of having savings ready when needed.

Check and Keep Your Credit Score High

Years past there were no credit cards….. everyone paid by cash.  Actually it was a good thing, because if you didn’t have the cash, you didn’t buy the item.  A perfect way to stay within budget.

Remembering back, my Dad was buying a new car. He had the cash and brought it to the car dealer. But the car dealer said ‘you need credit’…. to which my Dad answered, “But I have the cash.”  No…. he needed credit.

He put a down payment of cash towards the car, paying the rest ‘on time’. And he opened up his first credit card (this was in the 1960’s).

The credit card was through a large department store (still open but under a different name). And I don’t believe he ever used it.  However, I did.  I was a recent high school graduate and was working in the city where the store was located.  Dad told me I could use the card (he’d given my name to the credit department at the store, and the rule was (Dad’s rule was):  “You can use the card. Ask me for it and use it for your purchase. When you get home from work, put the card on my bureau, and on Friday (when I got paid), put the money for the item(s) along with the sales slip(s) on my bureau so that when the bill comes in, I can pay it in full.

This was the one and only time he said this. I used the card often, followed his rule, and he had an excellent credit score because of it.

I, however, learned a lifelong lesson……  I learned how to properly use a credit card.  I’ve done so for 6 decades, and never, not once, have I ever had to pay a late fee or a finance charge.  Dad’s advice was the best advice and because of it, I have saved potentially thousands of dollars because I learned from that first purchase.

So, use a credit card, buy only what you know you can pay for when the bill comes in. Pay it in full and on time avoiding late fees and finance charges and when you check on your credit score, you will be pleasantly surprised.

You credit score will allow you (if it’s high), to get a loan, an apartment, a mortgage etc. These places can and do check to see what kind of a risk you are.

If you can’t follow these simple rules, don’t use a credit card!  It’s for your own benefit.

Online shopping can ruin your budget.

Used to be if you wanted/needed something, you had to get ready, and drive to the store to get it. Now, with the internet….and there are many, many wonderful things we have now to thank for the internet, however, shopping online, and the convenience of it, can truly ruin your finances.

It is so easy, any time of day or night, to open your computer and scroll until you see something you want/need, and often will, as you scroll through, see other things and click onto the ‘add to cart’ button.

And so, the one thing, becomes two or maybe three, with a charge for your account that needs to be paid within 30 days. So, did you even think of the cost to your budget bottom line??????

The items will, within a day or two, arrive at your door….. the bill for these things will arrive within the next 30 days, and, unless you have the money to pay for the whole order, the finance charges for them will arrive 60 days and beyond…..

So….. before you shop online,……..before you click on the ‘add to cart’ button……. know, for a fact, that you can pay in full for the items you’re putting ‘in the cart’.

Stick to your budget…… be disciplined……. it’s to your benefit.

You’ll need to get on the same page quickly……

You save, your partner spends……. now what??

Honestly, this is the main reason you should….. before you become a couple….. check these things out.  But since you didn’t, there’s no time like the present.

Gather all of your bills, anything financial, savings, retirement accounts, checking accounts, credit/debit cards and bills….. ALL of the bills….. no hiding bills from purchases made unbeknownst to your partner.

Start adding up the bills… outstanding balances, and new bills not received (show the receipts for these).  Add them up….. really, all of them. Now, hide or cut up the credit/debit cards. Use cash only, and continue to use cash only until all the credit cards have a zero balance. Yes, how ever long it takes.

Once that is done, put the amount you’ve been paying those bills into your savings instead. You need an emergency fund of a few thousand dollars to cover only emergencies such as a dental emergency, a plumbing issue etc.

Then you’ll need to save at least 6 months of your income (eventually 9-12 months), should you lose your job or for a unexpected medical or family leave.  This way you will have ‘your income’ ready and waiting for that time.  But remember, this is money for living expenses only, no outside entertaining or eating out, just rent, utilities, food, insurance, car expenses. Nothing else!

By this time, you will both know what is going on financially in your relationship.  A must for all couples.  And should you need to dip into the emergency or 6-12 month reserve accounts, you’ll need to replenish whatever you took out.

If you’re in a relationship now, but not married yet, now is the time to do this, before you ‘tie the knot’.  In that way you won’t run into any financial surprises down the road.

Constant monitoring of your budget…..

Most of us live on a budget and while some can and do live within their means, others can’t or don’t.  The thing is, if you do, great!

But you have to continually monitor the budget  make sure you’re not overspending thus starting the slippery slope of a financial mess. However, if you can’t or don’t live within your means, you need to get on track immediately.

Prices go up, and we, basically don’t have any control of that, so what we need to do is subtract some of our ‘wants’. This may be temporary, that is if we will be getting a raise in pay (although that isn’t always the case). So…. write down all your expenses – every single one of them – putting them on paper is usually an eyeopener.

Making three columns – one for annual, one for monthly, and one for occasional expenses. The occasional list is usually the one that can be clipped or eliminated completely (entertainment, eating out/take out gifts, etc). Now add the columns putting the total of monthly and occasional columns together with the annual. This gives you your complete annual total.  Are you within your income figure??? If not, start with cutting back on the occasional list of things first. Doing this will, hopefully, bring you within range of your income.  Now……  stay within those limits.

The revamping of the budget need to be checked periodically. If not, you will find you overspend here and there and that’s when things start to get out of hand.

Be disciplined with this….. it’s to you advantage.

It’s their apartment, they’re letting you lease it…..

That said, you have certain obligations to fulfill….. from the signing of the lease until you vacate.

In order to get the apartment, the owner checked you out,….. the information you gave and your credit score. This is done so that they know how much of a risk they’re taking by choosing you as the one who will be staying on/in their property. It is all legal and above board.

You sign a lease…. a legal document…. stating that you are leasing for a particular time frame at a particular price.  You probably have also paid first, last and security deposit. First month is obvious, last is actually to the benefit of both…. them so they have that last month’s rent and you so that the rent you would have paid that month gives you a start for the cost of the next place you move to, and the security deposit, which is usually equal to a month’s rent, is held by the owner for the purpose of any damage to the apartment done by you so they have money there to pay for the damages. If there is no damage you get the full amount back plus interest (it’s the law), or, if there is some damage, the cost is deducted and the remainder is sent back to you.

When you do leave a rental unit, you should leave it clean.  You don’t need a cleaning service, but it should be left ‘sweep clean’…. meaning that when the next tenant moves in, they can put their boxes etc on the floor and feel okay with that. They will clean the cabinets and bathroom again, and sweep and mop again, but you should leave the apartment completely empty and cabinets completely empty. When you move into your next rental, you would expect the same.

So remember, while you are renting, save a bit each month specifically for the first, last and security deposit, and of course the movers, so that when the time comes, you’re all set to pack and go….. and have the money already there and waiting.