Budget Breakdown: Why your budget is only as good as how it adapts

Having a budget isn’t a full proof way of assuring you’ll be able to save money, pay bills on time or have a general, strong understanding of your finances.

The misconception is that just because you put pen to paper and thus have accounted for your car payment, house or apartment or your utilities that you’re on the right track to becoming more successful when it comes to money.

Truthfully, that’s just a small part of the budgeting process as other elements play into all of things you want to do with your money beyond just knowing that it exists and where you hope it is being allotted.

Experts argue and with good reason that your budget has to be adaptable; it has to be able to change with how your lifestyle, job or other elements can shift in one direction or another.

Would you believe that someone can get take a pay cut at work and leave their budget absolutely untouched? You’d think that those with any sort of financial acumen would be trying to look for easy places to start cutting expenses as well, such as cable television, cell phone perks or spending money on clothing less frequently then previously.

The status quo when it comes to your budget, simply doesn’t work.

In addition to any pay changes, you also have to consider your retirement as it pertains to your income and how you save money.

If you’re thinking about retirement or have decided to invest a portion for the first time, you have to consider that as you get yearly raises, bonuses or cost of living expense increases, you might want to alter your contribution to your retirement account and increase it with each year, so you can build your wealth or take into consideration how the market might fluctuate. If your company has a match program, you’ll want to take that into your thought as well.

No one is going to argue that a budget is the way to start saving and to beat debt into the ground, while keeping track of everything and anything that is money related. But budgeting isn’t a one and done proposal. It’s about a constant changing effort to manage your money, with a key on the word “manage.”

If you are a manager at work, manage a team or are in charge in some form or fashion in any realm of your life, why shouldn’t money be the same? You don’t all of a sudden start managing and then stop looking to get better, and money should carry with it that same mentality.

Money Mattering: Why common budget mistakes can be avoided

Do you often update your budget?

Do you even have a budget?

Perhaps when it comes to spending, you don’t have a plan and you simply “wing it” and assume that you’re making more than you spend, whether that comes in the form of simply paying bills or buying what you want rather than need.

Let’s start with that over or under estimating your spending. If you aren’t sure what you’re spending on or, even worse, how much you’re spending, then you need to adjust that immediately and that starts with a budget.

That budget also should consist of a plan to save money for the future or for expenses that might be the unexpected, such as taxes that need paid, home repairs or something else of that ilk.

The real issue that most face and one of the more common mistakes is not really looking at money in the purest sense or buying as though you have all the money in the world. Think about the car you own; did you buy it based on the money you have or the car you want? If it’s the latter, you’ve likely overspent on a car that is much loved, but the monthly payment hardly is the same.

Overspending isn’t just about not budgeting but also not looking in more unique places to get what you want, more specifically buying used when that is perfectly acceptable and must less expensive.

The first thought in that school of thought is car, but what about your home?

Far too many who struggle with money buy too much home, and that isn’t to suggest they don’t need the three bedrooms or extra living space in the basement, but more about the monthly mortgage payment and the overall cost of the house.

The common phrase “house poor” is all too familiar in that your mortgage takes up more than half of your monthly income, a sure fire no-no in the world of budgeting and saving money.

Finally, money isn’t just the root of all evil but it also is something you like to pretend you have even if you don’t. Not having money just means your budget looks different than that of your friends, so trying to buy the same wardrobe, the same car or the same vacation plans is only going to put you further behind in your plans for financial success and freedom.

Making mistakes with your budget is nothing new. The trick is figuring out what you’re doing wrong and adjusting it before mistakes start to feel like commonplace.

Personal Problem: Is a personal loan the answer to paying off debt?

Credit card debt is a topic that is tough for most people to indulge in discussing, mostly because everyone has debt and paying it off can be difficult if not feeling nearly impossible.

So when it comes to tackling debt in the form of credit cards, you might be willing to entertain just about any option that you can think of, even if it means adding to the pile.

Consolidation is paramount for some, simply for convenience purposes of making one payment and calling it a day. The consolidation road can center on two avenues: debt consolidation companies that overtake your debt and help you manage it or quite simply a personal loan that can use its Superman like qualities and knock out your debt in a single swipe.

The debt consolidation plan through a company works, but that renders your credit cards cancelled and obsolete and will ding your credit score as a result. It doesn’t mean you’ll not be able to have credit or get more important loans, but that is a deterrent for the masses.

A personal loan allows you to have a fixed interest rate (which is a breath of fresh air versus doing balance transfers on credit cards that change drastically once the promotional rate that is introduced goes away after 12 or 18 months).

Before going into a personal loan, you have to make sure you’re able to carry something like that, first by checking your credit score but also making sure you’re not going to get saddled with a high interest rate based on your debt to income ratio or income in general.

If you don’t have the income to carry personal loan, what ends up happening is you borrow less than you need to consolidate and still have a stray card or two to pay on in addition to paying back that personal loan.

The real selling point of the personal loan is that one stop shopping (or paying back) mentality. The personal loan can take multiple lines of credit and allow them to be paid off and that one lump sum monthly is important for the purposes of convenience. That is hard to understate for the people who have a lot of debt and a lot of cards they’re trying to manage.

Having credit card debt is troubling and disheartening but it doesn’t have to be a mountain that you can’t climb. Taking a personal loan should mean that, credit wise, you can carry it with an interest rate that only alleviates the problem, not adding to it.

Home Furnacing: Are you burning through money trying to redecorate?

I recently moved into a new home that was, for lack of a better term, outdated. The good news is that the major players we all look for in a home: windows, roof, heating system and cooling, carpeting all were pristine and in perfect shape.

The house was groomed well with landscaping that wasn’t about to skip a beat, and nothing major needed to be done.

Just a makeover of the home inside, as far as decorating in all facets of the word. I came from an apartment with furniture and a design flare donated and inspired by my parents, and that simply wasn’t going to do in a time like this when I have my own house.
That house should, in essence, reflect my style, too.

But how do I have that penchant for style in my home on a budget? That part isn’t quite as daunting as you’d think, particularly if you know where to cut costs and minimize spending.

As far as furniture, and perhaps aside from food, this product has a markup that would make Donald Trump blush. Furniture is terribly overpriced, and you need to prioritize how you’re buying it and what you’re spending.

For instance, if your furnishing a second bedroom, maybe a cheaper outlet like Ikea and its small, modular furniture would be better, and you can focus your attention on a bedroom mattress that is a little more expensive, but with the understanding that you’ll be sleeping on it, not the spare one, every day.

Furthermore, if you have an adverse reaction to garage stores or buying furniture second hand, then you’re missing out on being able to save hundreds if not thousands. I wouldn’t recommend buying a mattress second hand, but what about things like end tables, coffee tables, and other items of that ilk that can easily be purchased for next to nothing and perhaps stripped and repainted or stained to make them look as though they came directly from a high priced, higher end furniture store.

As for those bare walls, you can line your place with pictures but if you have a flare for fashion, why not let your accessories do the work for you. My girlfriend has her scarves, hats and other stylish accessories hanging on the walls, and it looks great, proving that you don’t need pricey wall art or photos to make your walls pop.

And there’s also nothing that says some of those mom and dad hand me downs aren’t all bad, either, especially if they’re the kind that can be remade or molding into more of what you want.

A new place comes with great financial responsibility, but if you’re pressed for cash, push back and use your creativity and money prowess to put money in your pocket and everything else in your house at the right price.

Credit Death: Why certain moves will always kill your credit score

Think about your credit score and the advice you receive from friends, a family member or anyone else (including a financial planner) about that score and how to protect it.

You may think that protecting a credit score simply means making sure you pay relatively the date due and having debt is just a part of everyday life.

But destroying your credit score is a reality that most ignore, and they don’t follow simple rules to keep that three digit number on the straight and narrow.

And we all know what a poor credit score means in the grand scheme of things as it relates to money: you won’t be able to get it, nor are you going to be able to get a credit card, borrow money or get a car or house with much ease.

Don’t forget as well that a bad credit score also means your interest rate if you are able to get a loan is going to be heavy, to say the least, and you’ll end up spending more in interest than you on the principle, and that’s a place no one wants to be.

To keep your credit score in line, you want to focus on two elements: paying on time and keeping your credit levels at a reasonable level (i.e. not maxing out your credit card). Maxing out a credit card is a huge credit score red flag as creditors see a $5,000 credit limit and the balance sits at about that or maybe only a few dollars less. This is called a bad credit utilization rate, and creditors see it and assume that you aren’t going to be able to accept any more credit, certainly not from the reputable ones anyway.

Paying on time might be the easiest yet the most difficult element to control for the general public to get right when it comes to their debt. Late credit card payments not only carry with them a late fee, but carry quite the relevancy when it comes to your score: something in the neighborhood of 35 percent. You want to stay as close to that payment date as possible but certainly not past it, and if you manage to go past 30 days, you run the risk of having that reported to a credit agency and thus turn it over to collections. That, in itself, is worth about 100 points of a drop to your score.

Keep that score alive and kicking by doing not much more than pay attention to paying on time and reminding yourself that the money on those credit cards needs paid back, so keep it minimal at best to maximize your score.

Saving Money After the Holiday Dip

The financial dip is the wallet-depleted period that immediately follows the holidays. It is the period that starts in the beginning of the year and ends when the weather warms in some areas. Most consumers have nothing but lint in their pockets at this time. Some consumers have a difficult time recovering from the dip period. The following are some tips that all consumers can use to save money after the holiday financial dip:

Do Some Bill Snipping

One way that modern consumers can save money after the dip is by snipping the household bills. Some of the bills such as the cell phone bill, car insurance bill, Internet bill and cable bill are open for consumer manipulation. What that means is that the account holder can contact customer service and remove some of the unnecessary features and add-ons until the post-holiday finances recover. Examples of bill add-ons are premium cable channels, cell phone music and data features, additional gigabytes of Internet, and collision and comprehensive auto insurance coverage. Consumers often surprise themselves when they see how much of a difference a little bit of bill snipping can make.

Start a Couponing Hobby

Many people do not bother themselves with coupons because they do not want to take the extra few seconds or minutes to stand in line or type a code into a website. The beauty of the dip period is that it provides consumers with the opportunity to do things that they would not normally do. Coupon codes, promotional codes and discounts codes are available on a vast number of websites as well as in the paper circular. They can help a struggling post-holiday consumer to get by and get back on his or her feet after spending so much money.

Go on a Penny Hunt

Many consumers turn their noses up at pennies because they are the least of all the money. However, these little brown coins can get people out of many tough situations. A group of them can put food on the table. They can buy gas. They can even purchase clothing. The best thing about pennies is that they are all over the place. Consumers can find them under the mattress, in the car, behind the dresser and more. A post-holiday consumer can probably find some serious cash by going on a penny hunt. Bank machines can help consumers turn their pennies into dollars.

There are ways that one can bounce back after the holiday doldrums. Consumers can start with the previously mentioned tips and go from there.

Myth Busters: Why you’re not always hurting your credit

Your credit score is coveted, at least it should be based on those three numbers and how they dictate everything from an interest rate to if you’ll be given a loan of any kind.

But as much as you pay attention to that score and make sure any move you make won’t hurt it in the long run, you might be overthinking it.

There are plenty of misconceptions about your credit and subsequent score, mostly centering on how you can damage it.

For instance, plenty of smart shoppers have vetoed the idea of having their credit score inquired on because of the thought that it is going to hurt your score. There is a difference between a hard and a soft inquiry, with the former being what happens when you buy a car or house or there’s something of value being attached to the score and approval.

The soft inquiry, mostly centering on you checking it yourself, won’t matter at all. Even the hard inquiry is only going take a few points off, so if you are buying a car for instance and go to multiple dealerships, you won’t take too much of a pounding by having it check more than a few times.

For those of us who struggle with credit and debt, you also might be inclined to inquire about a credit counseling or consolidation program in the hopes of managing your debt and having one reasonable payment per month.

That route often is viewed as a negative by the masses, given that those credit cards are closed immediately upon signing on for this type of deal in addition to the creditors issuing a letter saying as much.

But even though that all sounds daunting, a credit counselor and service that wipes out your cards and consolidates your debt is a good thing, and won’t affect your credit negatively. It’s relatively a neutral move in the sense that you’re not going to be penalized, other than maybe a few points and not being able to apply for any new credit as far as cards go for the next couple of years.

All that doesn’t sound so wonderful, but in actuality its a good thing since you shouldn’t be applying for new credit since you’ve struggled so mightily with what you recently consolidated though a company that specializes in it.

Your credit score certainly is pertinent as far as managing your debt and making sure you’re excelling and able to get the home, car and credit you want, but don’t be misled by misnomers about that score and what exactly is affecting it one way or another.

Fast and Furious: Why saving money can be quick, simple

When it comes to saving money, the time is now.

In fact, it is always now.

So many people struggle and strive to save as much as possible, but what ails them typically is they can’t do it fast enough. Time never really is of the essence as far as saving money as more often than not, you don’t look at putting money aside as the long haul or something you do over time. Chances are, you’ve talked about it as an immediate need.

But much like losing weight, saving money isn’t going to happen overnight, but that doesn’t mean you can’t strive to do as much as possible as quickly as possible with a few money saving habits you might be overlooking, or at least ones that can gain ground on your ultimate goal of saving money.

For instance, when was the last time you examined your grocery bill? Do you even have one? The latter question pertains to your propensity for putting cooking at home on the back burner in exchange for expensive and pricey eating out options at restaurants for breakfast and lunch but especially dinner.

The grocery store isn’t completely absolved, either, from this discussion. Families and individuals alike also love the idea of convenience and aside from falling prey to ordering food every night they tend to fall victim to expenses that include pre packaged grocery store meals that are much more expensive than ingredients that need prepared at home and served. If you can make the time to do that, you’ll save thousands per year.

One avenue that often gets overlooked is credit cards. And you might be thinking to yourself, how can credit cards actually help me save money? It isn’t so much using the cards at will but rather the idea that balance transfers can save you hundreds or even in some cases thousands of dollars on interest, especially for the cards that are carrying 20 something interest rates, those high interest store cards and anything else that has two digits when you talk about interest. Transferring isn’t a free pass as you have to pay it off by the time that introductory rate or promotion ends, but if you can buy yourself 18 months or more with a goose egg for an interest rate, you’re far ahead of the pack.

You’ll never meet anyone who doesn’t want to save as much money as possible, but for those without the patience or time to do it the right way, you might want to take drastic, albeit simple, measures.

Saving panned: Why traditional coupons can’t trump online version

Not long ago, coupons came to us via the mail or perhaps in the form of a door hanger or some other means of marketing and promotion that promised to save us money one way or another.

That, for the most part, was the only means that a consumer could bask in the glow of money saved, sitting at the kitchen or dining room table, scissors in tow, cutting corners literally as they went from one circular in the Sunday paper to another in the hopes of putting a little extra cash in their pocket.

The emergence of online coupons, or as it is affectionately known now as “couponing,” has benefited customers two fold: the same money savings options are there, only with a simple click of the print button but also the arrival of web sites that use online coupon codes that work in conjunction with and have relationships with retailers that allow you to score even more savings from one purchase to the next.

That advantage is one that customers find far too appealing to ignore and certainly beats the traditional form of the coupon or, if nothing else, works as the perfect compliment to that way of shopping. Some retailers have sales specifically designed for someone who might have a credit card with the store, and they’ll be apt to send you coupons in the mail for that reason alone. The influx of online coupon sites, such as keycode.com, PromotionCode.org, RetailMeNot.com, and coupons.com take those savings and merely add to the winnings.

If you can’t use both, the online coupon sites mentioned above typically trump most of what you can get with the paper version. Coupons for various retailers range from 10% all the way up to 70% off, and let’s not forget as well just how convenient online shopping is when you add online coupon promo code sites to the equation.

Not only do you have the ability to browse these sites, find the retailers and subsequent coupons you want, but it’s as simple as clicking and revealing a list of discounts that work for you, often with several to pick from, whether the retailer is offering free shipping or a discount of $25 off purchase of $100.

No matter how you slice it, coupons of this ilk are too hard to pass up.

keycode.com, for instance, partners with thousands of retailers who dish the goods on a variety of products and services so customers are more inclined to buy and you can view any number of deals, rather than just having, for instance, a $5 off coupon that hardly is enough to whet your appetite to save money and thus shop. keycode.com conveniently allows you to simply search a retailer and an entire page of coupons populates. A simple click on the one you like best, and you’re transported to a world of saving money you never thought possible and certainly wouldn’t get to this level with hard copy coupons, scissors and the best intentions in the world.

Those old fashioned coupons still have their place, but you’d be hard pressed to pass on the online coupons and promo sites that serve you much better for what you’re looking to save.

 

Free and Cleared: Is being debt free really possible?

How often have you told yourself that you want to get rid of your debt for good, start over so to speak and have money on hand and not have to depend on charging and borrowing every time you need something?

Chances are if you care about your money and want to be able to save it and spend in accordingly, you’ve thought about how to get rid of debt and also subsequently live your life completely debt free.

Those last two words are paramount because the idea of having a lifestyle or what you need to live without having to carry a little bit of debt at least is next to impossible. And truth be told, it is. There are an incredibly few number of people who actually have no debt, but the discussion put forth isn’t about your mortgage or car payment or some of the other necessary evils of debt that you and everyone else has.

This is more about how to live debt free away from borrowing money, using credit cards or amassing debt owed for things that aren’t quite as relevant and tangible as that house you’re living in or car you’re driving around on a daily basis.

This is more about charging vacations on credit cards, buying furniture or home improvement products and clothes on department store cards that have low rates at first then have interest that interjects itself at around 20 or 30 percent.
So how does one truly live debt free?

For starters, they budget accordingly to build a savings account that can help them handle emergencies or the products that they ultimately want. For this select group, it’s more about spending your own money to buy things and knowing you have enough saved that the dishwasher for $200 can come out of a checking account rather than charged to a Best Buy card, for example.

Even that so called car payment isn’t always a need, if you have a car that you can buy outright and avoid having that monthly payment. The catch with that can be a slew of repairs to come but that still can happen with the car payment, too, so why not try to eliminate at least one of the expenses.

And as long as you’re trying to live debt free, why not follow the simple act of buying based on a need not a want? If you’re toting around a cell phone that is three years old and it works fine, why replace it? The same can be said for your stove, couch or anything else that is motoring along just find in this world and doesn’t need swapped out for something better.

Keeping yourself out of debt isn’t quite the debacle and headache you might believe. It’s about decision making and determining how to budget and buy accordingly.

Savings Gone Wild