Category Archives: Tips & Tricks

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’.

 

 

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%.

 

 

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).

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.