You Can’t Spend What You Don’t Have….

Figuring out a budget is easy…. and common sense.  Common sense because it keeps you out of debt. A spreadsheet, or paper and pencil are the tools needed to get started.

List all…every one… of your expenses. Some will be weekly while others monthly, and others still will be annually. This is probably best done in three columns, listing each in the appropriate column. Don’t forget incidentals… gifts, insurance etc.

Question…..  Is savings in your list??  Hope so…. because you should pay yourself first.

Now, add each column.  If you get paid weekly, are your weekly expenses within that figure? The same for monthly, and again for annually.  If your expenses are more, then you need to cut back and set a strict budget to get in line with your income.  Do this as soon as possible, because if you don’t, you’ll find yourself in debt. A hole you don’t want to get yourself in, because it only gets deeper and harder to climb out.

Start chopping off unnecessary expenses, and/or chipping away at things you can.  It is imperative to stay within your income, and become disciplined at it.

It is also imperative that you save something from every paycheck.  Pay yourself first.  This is an extremely important habit to get into.  Deposit it into a savings account right away, better yet, have it direct deposited.  What you don’t see, you don’t miss.

Once you’ve set a budget, stick to it.  If it means eating out less, or stopping gift giving, it is something that has to be done….. for your financial future.

Time passes quickly and although saving for the future may seem far off now, it comes quicker than you may think.  There are other savings accounts to set up too, emergency fund, and 6-12 month income reserve.  Each as important as the other, and all necessary.

So budget and stick to it. Pay yourself first. Be disciplined about it. You’ll be glad you did.

It’s never too early to start learning about money 

If children are old enough to receive an allowance, they are old enough to learn about how to handle it properly.  Conversation about what they intend to do with their allowance is imperative.  Talking to children about money is extremely important.  It’s sad to see, in the world of today, that young adults haven’t a clue about how to handle money or even the basics of it.  Immediate gratification seems to sadly be the norm.  And most don’t give a thought to the bill that comes due at month’s end.  A sad, and bad habit to get into.

Hopefully, each child is given age appropriate chores to earn an allowance.  Let them learn right away that they work hard for their money, that it doesn’t come easy.  Realizing this, they’ll be less likely to waste it.  Keeping their room clean, is not a chore…they should keep it clean.

• Teach them that they should save some — maybe 1/3.   Take them to the bank and open a custodial savings account –  your name and theirs.  Let them fill out the deposit slip themselves, taking part in the process, so they can actually see for themselves how the savings system works…. they can ‘watch’ their money grow.
• The second 1/3 can be for saving for something particular they’d like, say a new device.  This teaches that they have to wait for some things.  They should also put aside a part of this 1/3 for family gifts, birthday, holiday.  Even giving a gift that costs $1. is, for them, a gift from their heart.  They worked for, spent their own earned money to do this… a good feeling.
• The last 1/3 they can spend on themselves, for something they’d like or like to do.

This will teach them to ‘live within their means’. if they don’t have the money, they can’t buy the item.  They may even find they no longer want the item when they do have the money.  Another lesson learned.

They will learn to budget. They’ll learn how to prioritize. They’ll learn discipline.

Things to consider before you purchase a home.

1. You need 20% for a down payment, any less and you’ll need to purchase mortgage insurance, paid for on a monthly basis until that 20% is met.  It’s best to have the 20%.  There are other legal fees at time of closing, so you’ll need extra money for closing costs.
2. You want to be sure of the area you’re choosing, and why.  Location, location, location.  If you have children, you’ll want to check the school system., and kid friendly neighborhood. If no kids, or none in your future, you’ll be thinking more of your commute to work.
3. Don’t buy more house than you need, or can afford.  Check out mortgage rates and get in touch with a reputable mortgage lender – they’ll ask income, outstanding debt, they’ll check your credit history etc., and get back to you with an answer if they’ll take you on,  along with pertinent information for a loan – how much, according to your income to debt ratio, you can borrow for the mortgage and at what interest rate you fall under with the info given. A good Credit Score = lower interest rate. Ask for a pre-approval letter.  This gives the seller proof that you’re a serious buyer and what you are approved for.  This letter can also mean you get your dream home over another buyer without one, yet looking at the same home.
4. However, the lender you chose, will give you the highest figure that you could possibly squeak in your budget.  A suggestion would be to look for a home below that figure.  Do your own due diligence. Crunch your own numbers.  No one knows your budget like you do.  Just because the lender says one figure, you will more than likely be more comfortable with a lower one,  This gives you some wiggle room, for ‘unexpected’ expenses – which will, as anyone who owns a home will tell you, will most definitely occur.  There are plenty of homes on the market.  You don’t want to be ‘House Poor’.  You want to sleep well at night.

You can do this….

Buy the store brand whenever possible.  The store tries hard to have the same quality and taste you’re used to in the name brand products, but at a cheaper price.

Stop buying bagged snacks and candy. They’re costly, and can add $10. – $15. to your total bill with just a few bags. A bag of popcorn kernels you pop yourself is cheap and gives bowls and bowls of popcorn. Buy carrots, celery, peppers, cucumbers, zucchini, summer squash etc., add your favorites, mix it up. Wash, slice, and enjoy as is or with a dip…better for you health too.

Stop buying soda.  Water is very refreshing.  Swap out a soda, opting for water, and make that two the next day, three the following and so on.  Tap water is great.  Fill a bottle and put it on the door of the fridge where it’s handy.  You can also add a slice of lemon and or lime to it.

Cut back on meat, you don’t need it every day. To get enough protein less expensively by adding more eggs, lentils, black/white/kidney beans to recipes.  Eat more vegetables, they can be cooked in various ways, adding spices to vary the taste, most can be eaten raw.  A bonus is that they’re low in calories.

Some grocery stores go through their produce each day, package up those that are no longer  ‘up to their standard’ and put them on a shelving unit at the back of the store.  This produce is now about half the price per pound of what is in the nearby produce bins. If you don’t see it, ask the manager if they do this, and go shopping around the time it’s usually put out.

The same holds true for the bakery department.  The sell by date is the previous day, so setting it out a treat, even for guests, is fine.  Put it on a pretty plate, toss the packaging, and enjoy.

Scan the internet for new recipes.  Make up your own.  Be creative,  Cooking your own meals is far cheaper than eating out or ordering take-out. Oftentimes restaurants add a lot of salt or salt type spices.  If you’re watching your blood pressure, watching salt intake is a must.  Processed foods are also high in sodium.  Cooking at home can alleviate this problem.  Just don’t add salt.

Even if you think you can’t cook, you’ll find that it is so much easier than you think.  There are numerous easy to prepare recipes online geared to a ‘new cook’. A hint to the clean up… Once you’re through with a bowl, spoon, etc, wash it.  Get used to doing it that way and you won’t have things piled in the sink.  Clean up as you go.  If something does need soaking, fill with soap and water and while you’re enjoying your meal, it’s soaking and will be ready for easy clean up by the end of dinner.

Enjoy!