How to change gift giving issues.

It’s always nice to give (and receive) a gift.  It lets the recipient know that he/she is remembered on a Special Day, or for a specific reason.  And some gifts are given/received….just because.

That said, as nice as it is, it can also get out of hand, and often does.  We all feel as though we have to give a gift to the individual(s) we received gifts from….and so, the gift giving cycle goes on…and on…..even feeling guilty if we receive a gift and don’t have one at the ready, waiting in the wings.  We’ve all been there.  But if it’s not in your budget, stop the cycle.

Years ago, you could set up a ‘Christmas Club’ at a neighborhood bank, and deposit an amount you chose each week.  Around Thanksgiving, the bank would mail a check for the amount saved in the account, minus a few dollars to keep the account open so you could continue the process each year, giving the saver cash to Christmas shop without worrying about where the money for the gifts would come from.  They don’t have these any more, but you can do something similar by saving a specific amount each month set aside specifically for gift giving….depending how many gifts you give, but even more importantly, only if your budget can handle it.  This will allow you to see just how much your spending on gifts, and thoughts of who you might be able to remove from your list.

There is no shame in saying you’re trimming your gift list, and you may be surprised to find that the other person is glad you brought it up. It is mind boggling how people continue to struggle with debt, yet continue on so others ‘won’t know’.  If you’d still like to do something for others, bake something, make something, or give of your time.  It’s the thought that counts.  And more likely than not, will be appreciated just as much, if not more.

Just a remembrance of their Special Day with a phone call or card works well.  The idea is to remember the person, and let them know you did.  It is not meant for you to go in hawk.

Start saving early…. every time you receive money.

• Save a part of whatever money you receive, and whenever you receive it.
• Deposit it into an interest bearing savings account.
• Interest compounded daily is better than monthly or annually.
• When there’s enough to open a CD (Certificate of Deposit), find the best rate for the length of time you choose.  CD rates are usually higher than regular savings, but come with rules.
• At maturity of the CD, you can take it out, or roll it over adding money to it, or just rollover.  If you let the maturity pass by, it will be automatically rolled over as stated in your original agreement.
• Add beneficiaries (one or more) to your account(s).  Should anything happen to you, the account will go directly to those of your choice. If not, the state handles it, and maybe those you wouldn’t choose yourself, will now own it.
• As your account grows, separate it into three, liquid (immediate)  accounts — emergencies, a 6 months to 1 year ‘cushion’ account, and the third, a retirement account(s) which can be opened when you receive earned income.  Once opened, continue adding to each.
• Over time, be more generous with your savings accounts than you are with your immediate gratification purchases. You will be more than happy when you retire and have enough saved in not only your retirement accounts but, if you didn’t need to use the ‘cushion’ account, or liquid emergency account, they’re still there as well …(along with interest).
• These are all gifts to you from you!  The idea is to save.  Save every penny you possibly can.

We all have it….but we don’t always use it

Common sense is the logical way of doing something to get the best results in the smartest, and usually easiest way possible.  We all possess it, in one way or another, and we all use it to one degree or another.

It is, in itself, an education. There are those who live on it.

Most, if not all, use it every day.  Common sense tells us if we step out into traffic, we could get hit by a car.  Or if we take a pan out of the oven without using potholders, we’ll burn our hands. These, and hundreds of other examples are ways of using common sense.  We even teach children, at a young age to use it…. put on your jacket so you won’t be cold,  tie you shoelaces so you won’t trip, if you save one hundred pennies, you will have a dollar and so on…and every penny counts…it’s all common sense. You get it.

The point is, if you live beyond you means, spending money that is not there….. that you do not have, knowing this yet still doing this, common sense will tell you that you will be, if you aren’t already, digging a financial hole for yourself….one that not only, depending on how much debt you’re in, can take years to get out of. And the stress it causes can take its’ toll on your health.  Hopefully, you like yourself enough not to do this to yourself.

Reading pages posted herein, will, using common sense, help keep you from getting into a financial hole, where you can choose the ideas that will work best for you and your budget as you move forward, while saving in a way that will bring you to having enough for retirement.

Or, if you already find yourself in a financial hole, again using common sense, choose ideas that will help get you out and with continued discipline on your part can put you on a path to freedom from debt. And then, moving forward, you too will be saving for your retirement. Each person has their reason(s) why and how it happened, but surely you didn’t have getting into debt as a goal.  With hard work on your part, and determination, you too can become debt free. You need to do the work. You need to be continually and consistently budget savvy. It takes discipline…….

It’s common sense.

Why are You Paying Fees?

You save up some money, open a bank account, and they hand you a pamphlet with a “Fee Schedule”.  It’s your money, they will ‘use’ it, and they’re charging you to do this?????

Look elsewhere.

There are still lots of ‘brick and mortar’ banks, although most individuals prefer the ‘online’ version.  Whichever you decide, check around – you want the most interest, and no fees.

Although with ATM’s there are sometimes fees, if you use one – for convenience – that belongs to a different bank, or if you use one too often within a statement period, you will incur charges.  If this is the only way you can do your banking, be vigilant on the rules and stay within the perimeter to avoid extra charges.

If you are allowed only a certain amount of transactions per statement period, find another bank.  Not everyone fits into their numbers.  If you need to deposit or withdraw from your account, you should be able to do so freely……. and Free.

If you don’t check around, you will notice that your account is taking a financial hit because of fees and charges you’ve incurred.  Money wasted…. which could be in your Retirement Account. And if you overuse the transactions, fees are taken out immediately, so unless you constantly check, you could be making a withdrawal without sufficient funds in the account.  Another fee…your overdrawn.  Be diligent.

A strong suggestion….. use a paper check register.  Be vigilant about entries into and out of your account.  If you do this, you’ll know exactly how much is in your account at any given time. Should you write out a check, you subtract the amount when you do.  The bank will subtract the amount when the check is cashed….which gives you a false amount in your account.  And thinking you have more than you do, you write another check, only to find you have overdrawn your account.  Fees, fees, fees.

Be account savvy….. it’s a benefit to you.

Financial balancing relieves stress

Simplifying.  It is the springboard to clearing out, getting rid of clutter.  Think about it, when you clean a room, organize a closet, clear the kitchen counters, there’s a satisfaction to seeing it all done.  One of those…..”Ahhh, nice!” moments.

The same is true with your finances.  When you’re finances are cluttered in debt, not only the worry of how to pay the bills stacked up, but the worry is there too about the bills still coming in, those you know are on the way, along with added interest charges.  Once you get a handle on the fact you have a problem, that you’ve been ‘living beyond your means’, and how to organize your finances using clear cut ways to plan your strategy by making a spreadsheet or balance sheet, whichever works for you, creating a workable budget for yourself, and sticking to it, then, and only then will you find your path to financial balance.  In turn, you will relieve a huge amount of stress in your life.

First rule is ….. Other than living necessities, do not buy anything.

Sort the bills into piles….Essentials (rent/mortgage, heat/light, food, health), you get the picture. These are the ones you must stay on top of to sustain yourself, and keep a roof over your head.

Credit card bills in another pile.  They do have to be taken care of.  You purchased, and are now responsible for whatever is on them.  Call the Customer Service of each card, and explain that you aim to pay it off, and is there any way they can help.  Some say yes, some say no.

Remember, you made the purchases. Start with the highest interest rate, work on getting rid of that one first, but, do not neglect the others.  Continue to pay each, preferably more than the minimum amount due, and certainly before the due date.  Most companies receive two deliveries of mail each day.  Even if they receive your payment on the due date, if they post payments received after the first shipment of mail comes in, and your check is received on the due date, but not received until the second mail delivery, it will not be posted until the next day…… meaning you are a day late.  This, of course, will add a late fee on next months’ bill.  Avoid this by paying as soon as you receive notice of the bill, whether online or in the mail.

Paring down, budgeting, and paying off your bills, before they’re due, will get you on a cycle of discipline you will continue throughout your lifetime.  Sticking to your budget will bring you the ability to save, thus relieving you of the stress you thought you couldn’t get rid of.

You can do this!  It’s easier than you might think.  Really.

Set the financial table right away…..

Whether you’re married, or living with a roommate(s), you are giving in some way to the sharing of running the household. The knowledge of where the money is coming from, how much, and where it’s going,, should be known to each.  Put it all on the table.  Discuss it. Agree to it.  Then, each week readdress it.  Make sure it’s working in all ways.  If not, fix it.  Now.

Married with children?  Either both parents work or one is the stay at home parent and may (or may not) work from home.  If the stay at home parent doesn’t bring home a paycheck, he/she is contributing by saving the couple money by not having to hire a nanny, which is a huge expense taken off the table.

The married couple, with children or not, will have other finances…..retirement and savings accounts, insurances, etc. which are shared, and need to be handled together.

If living with roommate(s), as each begins the venture of sharing a home together, the subject of cost of doing so needs to be addressed immediately.  Before the lease is signed or the moving truck arrives, have everything in writing….how much each is giving to rent, utilities, food etc…. anything that will be shared.  This is imperative and should be a separate account  from your own personal account, with each person knowing where the household account information is kept, and when and how every penny was spent.  Do not think that because the other person is a good friend and would never not pay their share…..it, sadly, does happen.

Each adult individual, married or not, living together and sharing expenses should have complete access to any and all financial information relating to the cost of the household.

Money can change a relationship, and often does. It can end a relationship, and often does.

Be open and above board with money in these situations.  Lay it all on the table in the beginning.

Start Early…… the earlier the better.

1. Get children involved in saving a portion of their allowance.
2. Save something from every paycheck….every single one.
3. Pay yourself first….always. Put it immediately into your savings account.
4. Don’t spend what you don’t have….live within your paycheck.
5. If you can’t pay your credit card bill in full when due….stop using it.
6. Pay off your outstanding debt (credit cards, college loans)…. asap.
7. Make a list of all your expenses….add in everything, including savings. Add up all your expenses…..now, do they fit into your take home pay?
8. If not, back off on incidentals, eating out, gift giving, shopping sprees, etc.
9. Your rent/mortgage should not be more than 1/3 of your income.
10. Make a workable budget and stick to it…. from now on.

Back in the day…..

Decades ago people lived differently.  Finances were handled differently.  But, it worked.  It was really very simple.  They lived simply, and passed things on to another who could also get use out of it.  They had work, or house clothes, keeping their ‘Sunday best’ for just that.  School clothes were changed and play clothes were put on… passing on clothes not stained from play on to another child, and often one or two more.  Women wore aprons over their house-dress for the same reason.  Jackets, hats, mittens, boots were passed on.  Memories of a box with  hats, mismatched mittens and broken buckle boots, where whoever needed an item, would use what fit (or almost),  and often not matching. They were worn anyway. Warmth was the goal.

There was only one car for the family, (most women didn’t drive) and some didn’t have a car.  Families helped each other, multi generations living in the same house.  Everything was shared and passed to another to be used until it was completely worn out.  Nothing was wasted.

Socks were darned… a wooden darning egg was put inside the sock with the hole of the sock stretched a bit, and weaving thread back and forth waffle style, the hole was closed, and the sock used again. Shoes were heeled and resoled at the cobbler to pass on to others for a added year or more for several children.  Broken shoelaces were knotted and put back in the lace holes.  And yes, if the sole of a shoe was worn out before money was there to resole it, cardboard was cut to size and shape, and slid in like and innersole, until the cash was there for the cobbler bill.

Also remembered was ‘stretching’ food…. adding extra water to soup, cutting a piece of meat so each could have a bite or two, adding a little water to the dregs of the ketchup, mustard, etc to use every bit left in the bottle. Potatoes were cooked in various ways, and were filling.  Always a green and yellow vegetable gave us vitamins.  Powdered milk with added water was cheaper than whole milk. No food was ever wasted.  Children’s birthday parties meant ice cream and cake for dessert, along with a glass of tonic (soda). And a small (practical) gift for the birthday child made the day memorable.

We used baking soda or salt and water to brush our teeth, and because old fashioned, natural home remedies worked, we used them for whatever ailed us.  They are all available still, besides being cheaper. Check online…. you’ll be amazed.

Adding a little water to the almost empty shampoo bottle, a few shakes to it, and we got a few more shampoos.  Cutting off the leg of a nylon stocking, small soap ends were put the foot, and knotting it, we shook it back and forth in a bucket of water to use for a task.

With no specific specially made household cleaners, we used rubbing alcohol, or vinegar, or ammonia…each used separately diluting it with water and each for a specific task.  Again, check online.  These still work for any task, and are much cheaper too.

The point of this post is to let you know that things can be done differently yet work.

And….. back in the day….. there were no credit cards!  Cash was used ….. and if the cash wasn’t there, you went without, or you waited for it, while saving the money.

Any or all of these things can be implemented into your lifestyle….. saving money along the way.

Auditing your accounts = Knowing what you have and have spent

It is extremely important to audit your accounts….making sure all are balanced (to the penny), so that you won’t spend what isn’t there.

Although online banking does this, a check register is another way.  The written register subtracts a written check amount, subtracting it from the remaining balance.  The online version allows that same amount to ‘sit’ there until the amount is cashed, letting you think you have more than you do. This is how overdraft fees occur.  It shows more than what you have written out.

Savings accounts are just that….the money there is being saved for something specific… your Cash Reserve ‘Cushion’ Account – is used only should the time come when you are temporarily out of work, for whatever reason, thus receiving no paycheck.  Your goal for this account is 9 – 12 months of your income.  It will carry you over until you, once again, receive a regular income.  If you’re just starting it, it may seem daunting.  The thing is to start it and consistently add to it …. you probably won’t need it immediately, so this give you time to save and watch it grow.  It is there should your income stop for any reason.

The other account, the Liquid Emergency account is the one there for – only – things such as a large appliance purchase, a plumbing issue, car tires or repairs, dental, eyeglasses etc.   These accounts should ‘sit’ there and be added to frequently. Two or three thousand dollars is a good figure to have in it.

Checking accounts need to be continually checked and balanced….. it only takes minutes, yet is so important and should not be neglected.  Never.  And never….pay a bill before the deposit of cash for it has been added to your account.  Don’t think that ‘by the time they get the payment, the money will be there’…. That’s not always the case and it’s how wasteful overdraft fees occur.

If you use your credit card, save your sales slips – put them in an envelope in a handy drawer….when the bill comes in, get the envelope out and check off the slips to the bill.  It will probably check out right, but occasionally there is a charge which doesn’t belong to you.  If so, call the customer service number on the bill and clear up the issue with them.  If you don’t check your bill each month, you could pay for something that someone else purchased.  It happens occasionally.  Pay credit card bills in full and before the due date to avoid fees.