Category Archives: Budgeting

Day 9: Get smart about your taxes!

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I was going to cover something else completely today but saw that taxes are the topic du jour on Twitter (if you want to follow me on Twitter, I’m @Jessc098).

That got me thinking… the vast majority of Americans file on or after the deadline…very much unlike me. I consider a perk of being self-employed being able to file my taxes extra-early without waiting for a W-2, but I’m weird like that. Also, being an adoptive parent (two adoptions in three years) we see gigantic refunds every year due to the Adoption Tax Credit. We don’t even end up paying AMT.

Do you pay someone else to do your taxes? If you don’t have businesses or trusts, or other unusual circumstances, you might try giving tax-preparation a try.

We’ve used TurboTax online for the last several years, and one of my favorite features is that I can print my return to a *.pdf file and keep it on my computer. Also, every time I loose this file I can just grab it from the Web. Furthermore, it keeps track of things like the carryover balance of the adoption tax credit that we’ll get to claim for 2009 because we didn’t reach the max in 2008. This is all stuff my tax preparer might miss, and it provides me the extra assurance of being able to find the return later if I need it.

Also, if you are (or have) gotten money back this year–is it time to re-evaluate your withholding? What if you reduced your withholding and stopped giving the government an interest-free loan? Just something to think on for today. You could put the difference into an IRA or if you’re afraid of underpaying and getting stuck with a bill, put the extra into a SmartyPig savings account to keep around until you’ve calculated your 09 taxes.

Just my $.02 for today.

Day 8: Budgeting for the Technophobes

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If you’ve checked out the past three posts about aggregators that work directly with your online banking and you’re not comfortable with that, I understand. There’s a pretty spiffy Web site that works similarly called BudgetTracker. It’s a calendar based system that works from information that you provide. It also allows you to track business finances online.

Day 7: If you’re not budgeting yet…. do it!

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Ok, this catches us up to Monday, and we’re almost back on financial-literacy track.

For those of you who are brave, empowered and socially-fearless, you might like to try the “twitter of budgets” (As I’m so-dubbing it). Geezeo.com is a frightfully-social way of playing with your budget. I do think this could make budgeting fun for even the most carefree of souls.

Geezeo calls itself “Geezeo, the coolest, most fun way to look at your money without becoming one of those cheap people even you don’t want to hang out with.” (I take exception at that last part….)

I played with the site a bit today. They have a fantastic twitter-like feature called “confession booth” which you can either use with your own ID or anonymously to confess your financial indescretions and get back on track.

I’ll admit, I participated. I posted “Discovering that every time I get in the car seems like a good time for Starbucks. I’m thinking of filling my cupholders with concrete.” Ok, not too difficult. I wondered what others were saying and took a look at the feed… and I could read those all day! If you’re really brave, you can update Twitter from the “confession booth” if you’ve linked the two in your profile.

They have an aggregating feature which automatically downloads everything, excellent security credentials, and an “ask an expert” feature which I’m going to explore some more. Their blog also has some great posts including one today on four ways to save money on perscriptions. That’s a major expense in my household, so I’ll be studying up.

If you haven’t found our other budgeting solutions to your liking, give Geezeo.com a try. It looks like a lot of fun!

Just my $.02.

A belated day 5. Get a budget. Now! No, Really.

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My apologies for the delayed posts. I took a few days to enjoy the Easter Holiday with the family, and I’m back to writing feeling refreshed, renewed and most of all, saved.

Today’s topic (well, Friday’s actually) is budgeting. We all know we should budget. Most of us even have a rough mental budget. But how many people truly account for every dollar in and out. You must stop and ask each dollar “who are you, and where do you think you’re going?”

It is my theory that once someone has done this for a month–they’ll never go back to winging it again.

Implementing a household budget and reviewing our progress weekly has saved our family $1,500 per month, and we consider ourselves pretty thrifty people.

How to go about making a budget? We began by using Mint.com which we found through the Motley Fool. I’ll tell you about some more budgeting options as the week goes on.

We linked all of our accounts and classified our expenses in Mint. It’s an aggregator, so you only have to link it once, and not a lot of downloading. From that, we could see our past 90 days of spending, and we created a budget from there.

Each month since then we’ve been able to further trim our budget, whacking quite a substantial amount out and paying down our debt at a faster rate than ever before.

I’ve converted a few other folks to using Mint.com and since I tout mint so frequently here, I thought it might be beneficial to hear the praises sung from someone else.

April Stensgard of MomJobSeeker.com says “Mint.com is a very useful site. I love the daily reminders about the status of our budget. Mint.com also pointed out that our bank was charging us $10 for certain online transfers. I didn’t even know about this bank fee until Mint.com discovered it. We brought it up with our banker and have resolved the charges.”

April also offers a few ideas for improvements to Mint: she’d like to print out reports on the budget. I totally agree. I take screen shots and print those, but a printout we could post on the fridge or something would be super.

Kelly Mainard also converted to Mint. She says “Mint.com is a great asset to controlling my finances. I can see where every dollar is going and I can plan in the future. For the first time in my life, I feel as though I have real control of my finances! It’s empowering.”

If those aren’t good enough recommendations to try this yourself, I don’t know what is. Grab your bank statements, put in a movie and sit down with the computer and start working out your budget with Mint.com. An initial investment of 2-3 hours is just about perfect to get mint.com rocking and rolling for you, and beyond that, weekly maintenance of just a few minutes to classify any expenditures. You won’t regret it. I promise.

Just my $.02 for last Friday. More to come later today to catch up for the weekend.

Day 4 of 21: For Community and PF/Literacy

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This is day 4 in a series for the month of April: Financial Literacy Month.

I stumbled upon The Motley Fool a long time ago. I remember learning about stock-trading via a game they had (way back when E*Trade first launched). I have since kept using Motley Fool occasionally whenever I want to learn something new about finance. IRA vs 401K, what’s a 403B, I’ve always turned to Motley Fool for their reliable, humorous explanations, which are written in the plain-English that we non-CPAs understand.

Motley Fool provides excellent communities and message boards, and some affordable financial literacy classes (at least they have, I’m not sure if they’re still available).

I learned about Mint.com from Motley Fool.

They also have excellent tax-planning resources!

The site is free with a free membership but there’s a premium membership as well. I’ve never explored this, as I’ve found everything I’ve needed in their free pages.

My only word of caution is “beware the ads.” Their advertising borders on oppressive. It also frequently has a doomsday or get-rich-quick tone that I tire of. There is email “why the oil boom is coming SOON” and the site is covered with ads. Sometimes it can be hard to tell the content from the ads.

They also have so many Fool-branded affiliate relationships that I can’t always tell what all they’re endorsing, or what is going to get me to sign up for some fund or stock newsletter. I find myself only reading the first 1/2 of all their pages and never the sidebars because of the advertisements.

That said, the message boards are excellent resources, as are their tip articles like “60 seconds to get out of debt.”

If you’re new to personal finance or trying to learn something new–check them out, but beware the ads–here there by dragons.

Day 3 of 21: Debt is Dumb!

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I’ve been a personal finance “hobbyist” since I first saw Suze Orman on TV a few years ago, and discovered that you don’t have to have money to be involved in your finances.

Seriously though, I got involved in my retirement planning, and household budgeting. We paid off our cars early and “burned the candle at both ends” to pay down our home mortgage (something we’re grateful now as most of our neighbors are upside down in their mortgages).

In my research of personal finance, I’ve studied the PF theories of two “gurus” of personal finance; Dave Ramsey and Suze Orman.

Dave Ramsey’s philosophy is a bit more stringent. He doesn’t believe in debt. He says never take more than a 15 year mortgage, and never, EVER use a credit card. I especially like his book “The Total Money Makeover,” which I downloaded as an ebook from Audible.com.

Suze Orman’s philosophy is a little more relaxed in that student loan debt is “acceptable” debt, and that a credit card used for job search expenses is OK. I found her philosophy and strategy very helpful in my first few years on my own. I especially like her book “Money For the Young, Fabulous and Broke!”

I find my own personal finance philosophy right in-between these two–shunning credit cards, but accepting mortgages and student loan debts. Mr. Ramsey encourages parents to pay for their children’s college, I’m of the opinion that they appreciate it more when they put themselves through.

I encourage you to check out the library or iTunes and their Web sites for some good ideas and information. Dave Ramsey has a daily podcast available for free from iTunes. I especially enjoy the Friday shows where he invites callers to call and scream “I’m Debt Free!” with him on the air when they’ve paid off their last debt.

Happy learning!

This is part 3 of 21 of “21 days of financial literacy” for April, which is Financial Literacy Month.

Day 1 of 21 Days of Financial Literacy: DebtGoal.com

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This weeks’ featured topic will be Debt.

The first free Web resource that I’d like to feature is DebtGoal.com.

DebtGoal is an online debt calculator system that helps you to beat your debt. It calculates payoff times and a goal and “debt repayment budget” from the debt information you provide. I initially set up my account to include my mortgage, but took it out because I found the information discouraging. Leaving just my revolving debt accounts in there is a much better way for me to go.

DebtGoal’s calculator solution is to pay from the highest interest rate debt first, while paying minimums only on the rest. I personally adhere to the “snowball method” of paying the smallest balance first, closing the account and then moving on to the others.

I’m an alpha-tester with DebtGoal and have requested that the allow users to choose “high interest first” or “snowball method” perhaps even with a calculator for the difference between the methods.

There’s pros and cons to this system. First, it is not (presently) an aggregator, though they are working on adding this functionality. What this means is that each time you get a statement in the mail, or write a check, you have to manually log in and type the info.

One feature that I really like, and haven’t seen other places, is that it shows new spending separately, by basically showing you that you have to pay A: your regular debt-busting budget amount and B: your new spending to keep up on your goal.

It’s very graphical and visual. I was surprised to learn that my debts (they are mostly remaining travel debts from my adoption trip last year) would take 91 years to pay off if I paid only minimum balances. I’ve basically thrown at them everything I can each time a bill is due, but I can take a look at DebtGoal’s suggested payments and plan ahead to make payments to each respective account.

I’ll attach a screenshot here, but for my pride’s sake, I’ve removed my account balances. Rest assured, this will be paid off by year’s end. I’m on track!

If you have debt and you’d like a nice graphical way to tackle that, I’d encourage you to give DebtGoal.com a try!

Living great, despite the layoff

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Try it Now! Join Lending Club.We’ve now reached the point (just a few months in) where I’ve completely replaced my previous work-outside-the-home income with my mobile notary business and my freelance writing. By implementing the tips I’ve been outlining here–even post-layoff our family is coming out ahead of where we were six months ago financially, as well as in peace of mind.

Here’s a brief list of what we’ve done so far, and where it’s getting us. Remember, my layoff was December 7th, and today is April 2nd.

  • Called all lenders and negotiated lower interest rates. Followed up by shredding all credit cards. Value: Priceless!
  • Learned to cost-cut around the house: home-made laundry detergent. Saves $7/mo.
  • Budget and track all expenses with Mint.com.
  • Renegotiated and repriced insurance, dropped the gap coverage on our paid-off/high-mileage cars. Saves $4/mo.
  • Used the library more. Estimated savings $20/mo
  • Developed passive income streams (adding advertising on this web site and others, as well as Lending Club interest). Earns $1.10/mo.
  • Rolled-over my fee-intensive 401K into a more affordable IRA Savings TBD
  • Found tax advantages to starting my mobile-notary and freelance writing business.
  • “Re bundled” our cable-TV package to the same service and same company at a lower introductory price. Saves $25/mo.
  • Received our tax refund and paid off an adoption loan ($150/mo, a credit card $100/mo and a student loan $110/mo). We have just one credit card left. Saves $360/mo in debt payments.
  • Refinanced our 30-year fixed mortgage, and rolled in our home equity loan ($329/mo). We put both into a 15-year fixed mortgage and will be paying just $89 more than we were paying on our old mortgage payment. (We used Smarthippo.com to find a better rate). Saves $240 per month and 15 years off the life of our mortgage.
  • Testing out some meat-free recipes for dinner. Last night the kids loved eggplant parmesan (they thought it was pizza!). Saves $24/mo.
  • Renegotiated cell-phone plan (due to new business). Saves $100/mo.
  • The layoff reduced our household’s commuting cost. Saves $200/mo in fuel.

    These tricks save us $981.10 per month, but we’ve noticed that now that all expenses are tracked, our household expenses have been reduced by about $1300 per month.

Here’s a few things that we’re not doing.

  • Working more than 45-50 hours per week.
  • Missing out on time with our kids.
  • Cutting our daughter’s preschool (we may do this to ‘snowball’ an extra $660 per month, but she’s having so much fun, we’re having her stay for now).
  • Clipping coupons.
  • Stuffing envelopes or participating in “get rich quick schemes” and “pyramid sales.”

Another home-made cleaner recipe

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I haven’t tried this one yet, but I’m going to. I’m actually going to copy-and-paste the whole message here, because it’s from my grammy. Yes, I don’t care how old I am, she’s still always going to be my Grammy! (She’s also test-driving the home-made laundry detergent with me–so far I’m happy with it at my house).

**************************
Dear Jessie,

Got our utility bill today, and in it was a recipe for a cleaning liquid you might be interested in.

Mix the following ingredients in a bowl or bucket:

1/4 c. baking soda
1/2 c. borax
1/2 c. vinegar
1 gallon of water

Stir vigorously to dissolve the baking soda and borax. To make a spray cleaner, recuce the recipe and fully dissolve the ingredients to avoid clogging the spray bottle This recipe works great on countertops, floors and walls. Use with a mop, reusable sponge or rag.

I hope it will work out serendipitiously. (Sp.!!!) whew! Big word!
Lots of love, Gram xoxoxoxoxoxo
**************************************

Hope my gram decides to post again sometime. I wish my great-grandmother was still around, she had some amazing thrifty tips that I still use today. She would also be a great contributor here. For instance, speaking of utility bills–I save the carrier envelopes that my bills come in and I write my grocery lists on the outside and stick the coupons inside.

Today’s Activities

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Today Rob and I checked out SmartHippo.com again and decided how to approach our refinancing project. We had our first mortgage, as well as a home equity loan of $15,000. Our first mortgage was at something like 5.5% and the HELOC at 8%. We were able to refinance both into 4.5% with our regular bank, paying one point into a 15 year loan and keep our payment very close to our existing fixed 30 year loan. We’re also going to enroll in the mortgage accelerator to pay it off faster. This is exciting! We’ll be making real headway with every payment towards being debt-free. We spoke to a number of banks today about the subject and all were shocked that we were OK with a higher payment, and that we wanted a 15 year fixed, instead of rolling our 30 year loan (now in year 5) into another 30–and extending our term by another 5 idiotic years. (Dave Ramsey calls this the “stupid tax,” meaning the premium one pays for making dumb financial choices).

Our house won’t be underwater, and we’ll still have plenty of equity. Also, we’ll be building equity like crazy, with more than half of our monthly payment landing in equity–not interest.

One surprise in this process was that so many of the companies we talked to wouldn’t recommend their mortgage accelerator program–because it was administered by another company and you had to pay a fee to enroll, essentialy the other company works like a payday lender and loans the mortgage the difference between the two payments. We searched out the right accelerator program with the same zeal that we searched out interest rates.

Another interesting surprise was that because of our recent debt-busting efforts (two credit cards and two vehicles and an adoption loan paid off) we were able to qualify for our refinance based ONLY on my husabnd’s income. This we’re told was because of our excellent credit scores and our low debt-to-income ratio. The mortgage consultant said adding the verification process of my self-employment income wouldn’t get us a lower rate as we already qualified for the lowest available rate. Saves us a lot of headache, and provides a lot of peace of mind.