Just when I think I have got it figured out...

Prior to the last two weeks I was keeping one credit card on me "just in case of an emergency." Between June and early July, I put $1,000 onto that sucker. That does not include a $200 plane ticket for a planned vacation.

Needless to say after overspending that much, I had to make the bleeding stop. I have hung the card up to dry in some drawer at my parents house, where it can stay safe and sound and far far away from my budget.

During the last two weeks, I have not adjusted well to not spending at my leisure like I had been doing on the Amex. I blew my dining out / grocery budget by $50 already, and I still have 4 days to payday. Part of this is to blame on the longer days to spread the check over - we were paid the 13th, the next one still won't come until the 31st - so 17 days rather than 15, which happens to include an extra weekend.

But excuses are for addicts - I must get past the denial and accept the fact that I blew it. So I have started looking for a solution. One point of major bleeding I found is lunch & drinks. Almost all of my "dining out" was spent on one of these two. Overall, I spent an average of $15 a day on dining out, and $20 on food in general.

For this next week, I have a few challenges for myself to achieve an overall goal of $5/day average for dining out and $7/day for eating in: 1. Eat breakfast in, every day. 2. Only eat out for lunch 1 weekday and 1 weekend day. 3. Dinner - same rules as lunch.

Let the games begin!

The Finish Line

Many of the books I have read lately emphasize the important of VISUALIZATION in achieving a goal. You start with the furthest out goal (by a house) and work your way backwards to current day decisions that can be made to achieve that goal.

Example: One day I would like to own a house. (Overarching goal). Before I take out a mortgage, I should pay off my student loans (long-term). I can pay off more of my student loans once I get rid of credit-card debt (short-term).

Once you have your end result in mind (relaxing on the back deck off my kitchen with my morning paper and a cup of coffee, while I listen to the birds in my back yard), the day-to-day steps become more clear and more important to achieve.

Credit can help your or hurt you along the way. The less debt the better, but there are some basics of having a good credit score and affordable interest rates- pay any bills on time, always make your minimum payment, etc. Rather, if you don't do these things, your credit score will take a big hit down, and once your credit score goes down your interest rates go up and suddenly you owe a lot more than the $15 minimum payment you missed....

Keeping a good credit score is a good overarching goal to your financial decisions. The hardest part will be creating a lifestyle for yourself where you stay within your limits and create some cushion. Staying within your limits means spending less than you make each month. If you spend less than your monthly income, you won't need credit cards. If you don't need credit cards, you won't throw away money on interest payments. And the benefits just keep coming..

The second part, cushion, entails not just staying right within what you make every month, but actually being disciplined enough to set some aside. Start small - the emergency fund I talked about before (~$1,000) should be created as soon as possible and used only for true emergencies (and if used at all, built back ASAP).

Next, work towards saving 4 - 6 months worth of expenses - this way if you are injured, the economy crashed, or your new CEO does a lot of layoffs, you have enough backup to keep paying your bills, work on your recovery, and get to that next job and back on your feet.

Once you have an emergency fund, start thinking big! What would I like to have for myself one day? A beach getaway? A different car? Your own house? A cozy retirement? If you dream it, visualize it, and plan the steps to get there, you can achieve just about anything. Seriously.

What do you want your finish line to look like?

What's the problem with credit, anyhow?

I'd like to start this session with a little personal story. Two months ago the sit up sheets went around for girl scout cookies. Being the awesome friend and daughter that I am, I decided to order two more than usual to give to my friend and my mom. So arrival day came and here I sat, with FOUR boxes of cookies. Quick outside lesson about myself 1. I'm not big on sweets in the sense they are not a daily or even weekly purchase for me. 2. I work a job with unpredictably long nights. Just so happens the day of the arrival of the deliciousness, work turned into one of those late nights. Guess how many of that first box survived the night? Less than half.

Now, knowing what you know about my lack of sweet tooth, what do you suppose was the cause of my cookie binge? Aside from stress (not uncommon and manageable by alternating dubstep and classical music) I had an endless supply of cookies. Why did I eat them rather than order salad with everyone else? Simple: because they were there!

Similar to the grass is greener on the other side syndrome, the minute your credit card tells you that you have $3000 to spend, you feel you have $3000-cash. Deep down, when you are debating between debit or credit you think "credit. I have more"

MEEEH!! Wrong sucker! You just offered to pay a company more than you're worth in repayment and interest for sh** you probably don't need in the first place. My net worth currently sits at negative few thousand (which has come down tremendously thanks to savings and paying down my student loans).
The fact I owe more than I am worth is something I am not fond nor proud of, but I at least happy to say I got an education worth more than I owe for it, so I'm not too worried about future.

Today amidst various political BS I heard the statement "Americans now owe more in student loans than credit card debt." And you idiots think that's a BAD thing? So I spent more on my education than my wardrobe or the car I might wreck after charging the nonfat latte I managed to spill in my lap - at least knowledge and social skills friendships business connections might get me a better job one day. Visa, Amex, MasterCard, and Discove will not.

If you have it ($3000 credit line) you will spend it, or more than you otherwise would. You'll think "that Chamanda is crazy, this isn't do bad!" and more cards you shall get..

A glass of milk goes nicely with cookies, but eventually the box and your friend's box and your mom's box will be gone, and the girl scouts have stopped selling and you are left with spoiled milk and no cookies.

Same to your wallet and your credit. Don't let your credit score become a half empty glass of spoiled milk. It smells bad, and it's hard to be friends with smelly people...

Budget Commandments

Lately I have been a little off... budget-wise, blog-wise, fitness-wise, you name it, it's off. But, lately I have been focusing on something a little bit different. Just recently I took a vacation and despite the word "vacation" and very much wanting to be happy and content, I noticed that not only was I neither happy nor content (despite giving myself an extra spending allowance to enjoy), but I was also brining down the entire mood around me. The Lorax inside me speaking for happiness everywhere struck out - something must be done.

 Inspired, while perusing the book selection at the airport, a title struck out at me: The Happines Project @ http://www.happiness-project.com/. Gretchen has 12 Personal Commandenments inspired by various moments of her life and happiness project, which led me to think, why not have 12 Spending Commandments? A quick list of reminders is just what I need to get my budget back on track.

1. Pay debt first
2. Every penny counts
3. Debt, Save, Give, Needs, Fun
4. Flex and be flexed
5. Hard work pays off.
6. Plan the splurge.
7. Needs > wants.
8. Give more.
9. Have a little faith.
10. Fun is free.
11. Home cooked > dining out
12. Credit = debt = bad idea.

- "my" money is not mine until I give back what I borrowed.
-if I budget to $0 including-"miscellanous" not a penny is wasted.
- in order from most to least important
- wiggle room is good, like expecting the unexpected so Im always prepared
- grades, budget,career, family.. you name it, and this is true.
- if I plan the splurge I can get the most bang for my buck - outlet mall on a holiday wekeend anyone??
- are my .. bills paids, car running, body working?
- I have been blessed because others gave to me, time to return the favor
- If I spend wisely and plan ahead, I know my needs will be met
-going outside, talking with friends, using my imagination -so much fun for $0!
- less on my waist more in my wallet, what's not to love?
- the temptation to spend when the credit is in my wallet is far greater than the discount coupons I get. I need to lock them up and throw away the key, lest I make the unplanned splurge.

How to Make the "Oh Sh!!" Purchase, without need to say "O.S!!"

As you may have noticed in my last blog, I recently had an O.S moment. Drove to work like usual, parked my car in the deck like usual, went on with my day like usual, left way later than I would like to like usual, and my car had a flat tire.

Old me: "O.S.!! I have a flat tire how am I going to pay to get a new one?"

Budget-savvy diva-self: "I have a flat tire, but damn I'm hungry.. what to do..what to do"

As you saw, I called AAA and had them put that beautiful donut in place of my decrepit pitiful looking tire.

The following week I went to my favorite Kauffman Tire and asked what they recommended, so 4-tires and an alignment later, Betsy (as I fondly call my 1999 Camry) and I rolled on out of there safe and happy - all for a whopping $425.

Ok, so I got a good deal on those 4 new tires and alignment - but $425 is practically rent. The man at the counter even said "well I am not sure if this is in your budget or not.."

I thought to myself, "Well no sir, I did not write in 'unexpected new tire purchase' when I made my February budget." But I did think - "Well, I have almost 4 months worth of expenses saved up - and I can start replenshing that bucket as soon as next paycheck, so I should go ahead and take this good deal and put that nasty donut back in the trunk where it belongs."

Here's the how:

Step 1 - Make a budget, include Step 2 as a major goal of your budget.
Step 2 - Save $1000 as quickly as possible - this is yours to keep, not spend.
Step 3 - If you have real emergencies along the way, use your part of your $1000, and pay back in until back to $1000.
Step 4 - Pay off credit card debt - this is money you spent that you did not have. The money you make is not truly yours until your debt is gone, period - be careful.
Step 5 - Take your main monthly expenses (utilities, food, enough for gas to get to work) and multiply by 3 if you are single no kids, 6 if you are married/have kids. This is your emergency fund goal.

For some, this may be a very quick process - tax refund anyone??
For others, this could take quite some time. But true me - it's worth it!!

You may feel trapped by your budget to start - eating out less, shopping less, etc. - but once that "Oh sh!!" purchase comes and you find yourself not worried about how to pay for it, you will get to breathe the most satisfying sigh of relief you have felt in a long time.

Confessions of a Budget Blower

This pay period I did pretty well in most of my budget categories. Utilities were $50 cheaper than usual, so I put that into my long-term savings. Actual grocery expenditure was only $60 of the $100 I originally allotted. Dry cleaning was $14 of the $25 I set aside. Spending on gas was about half of what I allotted. And I gave up all alcohol for lent (lots of reasons behind that one, tougher than sticking to a budget!!!), so naturally my dining out spending will likely be half of what it usually would.

But here's where the trouble begins..

Mom's birthday was Wednesday. Tuesday night I decided to take the 45 minute drive ( 20, since I was already halfway there for work) to see her - but she was not home, so I bought her flowers & chocolate (real gift was at my apartment still), and left the card I had planned to mail with the gifts. Extra gas used - no mother to see.

Wednesday night I came out of the office to a flat tire. Tipped the AAA guy $5 that I wasnt expecting to spend.

Thursday I got off work early, so I drove back home (again) and took Mom to dinner. Extra $30 from my dining out budget I did not anticipate, but the food and the company were amazing, so I count it as worth it!

Friday had a chiro appointment - usually I only have one a month, this is the 2nd in two weeks. Good bye $50.

And Saturday boredom and a failed attempt to get my flat tire fixed (wait so long I probably wouldnt have made it by the time they closed) let to shopping trip at the nearby mall. EVERYTHING was on sale. In particular, a shirt I have had my eye on since January was on clearance + extra 30% off. I broke my own rules and did not put the shirt on hold, and picked a second up in the process.

So while I have enough cash to pay the *wince* credit cards that I put the chiro, shirts, and birthday dinner on (rule #3 broken), I will either a) cut back next month's free spending & pay with the next check b) not give to charity.

I dont think I should compromise on b), so please understand if I turn down a few extra lunch dates.

Total $$ blown: $12 gas, $15 flowers, card, chocolate, $5 tip to AAA, $30 dinner out, $50 chiropractor, $43 shopping spree = $155.

Not the worst I've ever done, but as I budget down to the last penny, that is $155 that I don't get to spend next month :(.

Budget - the Work/Life Bridge

http://moneyland.time.com/2012/02/03/personnel-finance-productivity-down-employers-target-debt-stress/

This article presents an intersting viewpoint: employers have incentive to teach employees about personal finance.

What I found even more interesting, however, was this tidbit "There are ideological blocks too: many think school is for Shakespeare and Nietzsche and that teaching kids about money is best left to parents."

When I compare the classes I had in highschool to what my mother had in highschool, I noticed something interesting: classes teaching skills useful to an individual operating their basic every day life, such as cooking, nutrition, and personal finance, have nearly vanished from public schools.

What are a vast majority of American's problems stemming from these days? OBESITY AND DEBT!!

No wonder the private sector has begun to hone in on this lack of information - organizations like http://www.fitbit.com/ and http://www.myfitnesspal.com/ are easy, nifty tools to help people set exercise and nutrition goals, and keep track of their progress.

Similarly, programs such as http://www.mint.com/ and celebrity-like figures such as Dave Ramsey and Clark Howard have popped up trying to help people learn how to manage their money and reach their financial (as well as other) life goals.

Accordingly, employers can benefit tremendously and quite selfishly from helping employees conquer their own health or finance issues. Who would you want on your staff? The unhealthy, broke employee who continually calls out sick or is late due to car troubles that she cannot afford be fixed (unreliable), or the healthy, financially stable individual (reliable)?

Could your organization benefit from implementing Financial Success program?

Why Budget

I started this blog, but forgot to say why! Here are some lessons I have learned over many years of trying many different budgets:

1) Online budgeting tools are nice, but only if you use them
2) Know how kids are more likely to eat vegetables they helped prepare? Same thing goes for adults using a budget they made themselves
3) Budgets trim wastefulness, and therefore, are good friends to keep close
4) Budgets do NOT have to be fancy
5) Budgets are like maps: they show you where to go, how to get there, and very useful when you get lost.

The first time I tried to track my spending, I found I had created a nightmare. With rows doing one thing and columns doing another, the budget had too many details and too many numbers, and was a budget too icky all around.

The budget I use now is in Excel. It includes formulas that add and subtract, and shows what % of my take home income each category represents.

Cupid's Undie Run - Saturday, February 12th

Best part of having a budget is being able to find money to give to those less fortunate.

If your budget allows any extra, please support the Children's Tumor Foundation through my team's page at:
http://hope.cupidsundierun.com/cur/participantpage.asp?fundid=3702&uid=9011&role=1

The foundation strives to end Neurofibromatosis through research. This condition usually begins in adolecense and causes tumors to grow on nerves throughout the body, causing blindness, deafness, and severe chronic pain. Currently, there are very few treatments.

One of our friend's youngest brother, Drew, has been fighting with this condition since he was only 10 years old! Please help us raise money for this worthy cause!

Impulse - slowing the "pulse" down

Think for a minute about your pulse: the more mature and healthier you are, the slower it needs to beat to keep you alive, well, and happy.

Infants are at 70-190 vs. Adults at 60-100. Athletes are between 40-60. (source)

Think about your pulse this way:

Infants: young, excitable, immature, developing bodies.

Adults: mature, fully developed (some healthier than others)

Athletes: mature, very well developed, healthiest of all.

Impulse implies that you are in that Infant: 70-190 range, rather than the Athlete:40-60 range.

Think about you impulse buys: you see something pretty, you get excited, you want it and you want it now, and your "pulse" elevates. Seems the only way to slow it down is to buy, buy, buy!

Much like a baby crying until it gets candy.

Here are some quick tips to avoid the trap of impulse:

1.       Make a budget: know what you can afford to blow before you dare step foot into that store.

2.      Back to front: shop the store back-to-front; those $200 heels that just made it to the floor will not look so good after you see the $70 heels waiting for you in the back

3.      Look for red: online or in the store, look (and wait) for the sales.

My top 3 favorite stores tend to sell my top 3 favorite new items at 40% off, just weeks after they are introduced. If I wait a few weeks, I can get 40% more clothing for my money.

                                Waiting isn't always such a bad thing, huh?

4.      Hurry up and Wait! try on what you like, pick your top 3, pick the 1-2 that fit into your budget. Now, I want you to walk to the counter, smile at the sales person, set the clothes down, and ask "Can you put these on hold please?"

5.       Exit the store, carry on the rest of your day, and get a good night's sleep.

If those on hold items haunt your dreams, go back and go ahead and buy them.

Putting clothes on hold accomplishes the following: a) you get the fun of shopping b) you find something you like c) you slow down your pulse long enough to make a good decision

Note: this technique can be applied to all shopping and should especially be applied to bigger purchases.

The more you practice these techniques, the slower your pulse will get, and the more fit and mature your spending habits will be.

               

Some Borrowed Tricks

I love coming up with ways to trick yourself into doing the right thing, or a faster way of doing it, like:

Setting up auto pay on your bills so they are paid before you have a chance to blow your paycheck
Putting clothes you wanted to buy on hold at the store until your excitement over them goes away

So, I loved this nifty article: http://www.43folders.com/2007/08/13/hanger-trick - most women, and a lot of guys I know for that matter, would probably be shocked at the results.

And this website is pretty killer as well: http://www.groceryguide.com/GA/Atlanta/Publix - use it to check the sales at any local food store in your area - and you can check 2 at once for easy comparison shopping!

I will be trying out both of these over the next 3 months, and update you on how I score.

Needs vs. Wants: the starting line

When I read and the speaker asks me to create a list, I find that I usually do not do it, for whatever reason.

So I made one for you. Feel free to disagree with the comment box below.

Ordered from most important to least important, which happens to equal most fixed to most flexible.

Needs*:

1.             Taxes   -   they come out of your check first anyways, so they are at the top

2.            Rent   -   no one wants to get evicted

3.            Utilities  -   no one wants to get dressed in the dark             

4.            Loan payments -   you promised you'd make this a priority to pay back

Mixed:

5.            Food  -   Dining Out vs. Eating In, or Steak vs. Canned Tuna can be flexed

6.            Health   -   getting prescribed meds is a need - getting Name Brand meds is not.

7.            Transportation   -   getting to work is a need - getting to the mall is not.

Wants:

8. Personal Travel - yes you WANT to explore the world, but save up to go do it.

9. Clothing - unless you are currently naked, this is a want

10. Recreation - of course you WANT to go to the movies, but make sure it fits first

*series on how to control these coming soon

Budgets set up in order of most important (needs*) to least important (wants) will help you

a) keep you spending in perspective
b) remind you your obligations need to be paid first
c) show you that you still have something leftover for fun
d) or if nothing is leftover for fun, it reminds you that some "needs*" probably have "wants" attached to them, and the "wants" need to be clipped fast

Understand a need* versus a want? Good - now you know the basic way to start your budget.

Whose Money is in Your Wallet?

As a follow-up to my post on Attitude, I figured I would outline some money-attitudes and their biggest downfalls.

Child - everything comes from Mommy & Daddy

                                Attitude: I want it, gotta have it, what's your's is mine

                                Downfall: Mommy & Daddy say "No."

Student - Spender: I go to school, I live on my own, but Mom & Dad still pay

                                Attitude: but everyone else lives on the upper east side.. Daddy please??

                                Downfall: Mommy and Daddy say "No - get a job if you want it."

Student-Hybrid: I go to school, I pay for my own drinks, but Uncle Sam gets the rest

                                Attitude: I <3 my student loans, how could I go to Spain without them?

                                Downfall: 4 years of fun = 10 years and $50,000k + Interest  to pay back later 

Student - Adult - Saver: I go to school, I saved for college, and I paid for it all on my own

                                Attitude: Only my money is mine/Ahhhhh freedom is sweet.

                                Downfall: You lived close enough to take the bus, which contains lots of loud Freshmen.

Adult - Spender - Child: I have a job, it pays for my drinks, but I live at Mom & Dad's

                                Attitude: the old bird does my laundry and makes me breakfast, why would I ever leave?

                                Downfall: Mom & Dad sell the house and buy an RV to travel - for two.

Worker-Hybrid: I have a job and pay for my apartment, but Mom & Dad pay some of the bills

                                Attitude: I am so close to being on my own, but it's so cheap to keep me on their plan!

                                Downfall: Mom & Dad switch plans, you're dropped, and your rent suddenly feels steep

Worker- Saver - Adult: I have a job, one name for every bill, and my checking account pays it all

                                Attitude: Only my money is mine/Ahhh - freedom is sweet.

                                Downfall: You seem less popular, because creditors never call...

Worker- Spender -Parent: I have a job, I pay the bills, and my kids get all the rest.

                                Attitude: I can't wait until they are old enough to get jobs and move out.

                                Downfall: You have trained up adult-spender-children: they will never move out.

Worker-Saver-Parent: I have a job, I saved for their college, and I love my vacations.

                                Attitude: I can wait to have it, and they can too.

                                Downfall: Your married friends are jealous, and you won' get as much time with your precious babies since they will never live on your couch.

Where there's a Will there's a Way

One thing I have learned about Money Managment - there is NO skill involved.
I repeat - NO skill.

Yes, I am a numbers person by nature (accountant by choice), so I am more aware of numbers, money, and the tools available. But AWARENESS and APPLICATION are two totally separate things. Knowing is the first step, Doing is what counts.

Let me give some none-money examples

• Doctors smoke.
• Nutritionists eat at McDonalds.
• Accountants go broke.

Why do awareness and application not always match up? Attitude.

If you desire to do something, chances are you will do it. Here's the trick with money - the more you plan and save now, the more you will enjoy what you want and be stress free later. But chances are your Attitude towards money will have to change first.

What's yours?

If YOU Wish Upon A Star

As a freshly - graduated laden - with - debt college student trying to get off to a great start on my next 60+ years, I have discovered there are a LOT of people, just like me, though they may be earlier or further along on the timeline than myself.

Here's what I picture for our futures (and why Im starting budge-what?):

• Student Loans - gone, gone, and long gone.
• Car - newer, reliable, and all mine. No lease, no loan, no strings attached, nada.
• Credit cards - um duh, why wouldn't I just pay cash? My money, my purchases- not yours VISADISCAMEX!
• Retirement - as good as I live now and then some.

Does this life sound nice to you? What would you like to add?