In Part 1, you added up your income. Part 2 had you tally up your expenses. Now, before we look at the difference between those numbers, let’s talk about your savings.
Here in the United States, the amount of money Joe Citizen saves is non-existent. In recent years, the statistics have shown the nation’s savings rate at 2% on the high end and a negative 2% on the low end. In other words, our citizenry saves, on average, nothing. Are you an average Joe? [Read more →]
Now that you’ve tallied what you’ve got coming in, it’s time to look at what’s going out, but first, I want you to take out an index card or sticky note or just a small piece of paper. On it, I want you to write the total amount for what you think you spend each month. Set it aside for later. [Read more →]
Many people have a habit of purchasing their Christmas gifts on their credit cards each year, acting as if they were suddenly surprised to find that Christmas came on the 25th of December…what, again?! Others frantically try to scrape together enough money to buy gifts by cutting corners in the months of October, November and December. Again, they seem to be surprised to find that there’s a major expense in the fourth quarter of the year. If you’re in one of these groups, here’s your clue: it’s time to start planning for next year. [Read more →]
If you have a partner in your life—a spouse, someone you live with as a committed couple, anyone who affects or is affected by your financial decisions—please do everything you can to make sure that both of you stand on equal footing when it comes to money. By “equal footing”, I don’t mean that you have to both work and earn the same amount of money in your paychecks. Equal footing is when you both know everything about your individual and joint financial situations and you make decisions for the present and the future together. It is not when one of you earns the pay and the other receives an allowance determined by them because “it’s my money and I will decide what you need”. It is when all household income is pooled and it goes from being mine or yours to become simply ours. [Read more →]
If your employer traditionally pays Christmas bonuses, you may still receive one this year, depending on what the company has had to cut in order to keep up with the current economy. If you do get that extra money, what are you going to do with it? Will you do the same thing you always have? Will you spend it on Christmas gifts or the post-Christmas sales? Will you splurge on a big ticket item? Will you use it to pay on your debts?
Most people view bonuses as “free money” and they race to spend them. [Read more →]
How do you teach your children about money? It’s an especially tough question when what you learned as a child left you totally unprepared for life in the adult world. And it leads to many more questions… At what point do you tackle which questions? What bad habits do you have from your own childhood that you want to make sure they don’t learn? What’s the right way to go about this? [Read more →]
When I first started trying to figure out how to create a budget, I was lost. I didn’t know how much I spent each month on pretty much anything, nor did I have any idea how much I shouldspend. The whole idea of trying to figure that out intimidated me to the extreme. As a matter of fact, I had several false starts with my budget. I’d put one together at the beginning of the month, figure out that I wasn’t meeting it at the end of the month, and decide it was hopeless and convince myself that I really didn’t need a budget anyway. I think I did this several times over the course of a couple of years. At that time, money wasn’t tight and I could afford to be reckless. Or so I thought.
Had I taken the time to learn—really learn—how to effectively budget in those days, I might not have ended up more than $30,000 in debt when my first husband and I split up. [Read more →]
Many people have never taken the time to calculate their net worth. For some, it is because they believe only the rich do that sort of thing. For others, they think that their net worth says something about their personal value as individuals in the world, that it’s some sort of judgment about whether or not they are worthwhile people. Neither of these beliefs is true.
Your net worth is [Read more →]
If you’re involved in any type of long-term committed relationship (married, living-together, whatever), you need to get current with each other about your money. Talk about your past mistakes and successes, your present situation, your future goals, and your individual money habits. Many people come from families that treated money as a taboo subject. If you came from one of them, it’s time to break that destructive family tradition. [Read more →]
If you don’t live an extra busy life, I want to know your secret. Most of us are living life in the fast lane, whether we want to or not. We’ve got work and family and friends and classes and parties and team sports and… and… and… and we still need to make time for ourselves, somehow. It seems like there’s never enough time to do everything we need to, much less those other things that we still want to do.
One way to make handling your monthly finances easier is [Read more →]