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Showing posts from April, 2009

A co-worker intrigued by personal budgeting and software ran into my office this afternoon. "Can you believe it? I heard about on NPR yesterday! And you were just talking about it...isn't that weird?" Maybe. Maybe not. If is an accurate gauge of salaries, then most of us who are employed by others are making between $40,000 and $80,000 a year. Try saving enough to pay for a house, put children through private school, and then into college, fund a retirement plan (again!), pay for a car, pay for school loans...well, you get my drift. A LOT of us are using personal budgeting software and most of us have finite resources, even the Millionaire Next Door has to do some planning. (Okay, so it's mostly around taxes, but that kind of planning counts too...) is an awesome free resource for aggregating all of your accounts into one overview. The first time I really understood my net worth was when I began using the full functionalit

You Need A Budget

Based on recommendations from various money blogs, I downloaded the You Need A Budget software for a two week free trial. New personal household budgeting software is incredibly important to getting the money right, and I'm still looking for the perfect system. YNAB. as it's frequently referred to, is a wonderfully smooth little household budgeting tool. Except, it didn't work for me. And the download was a big mistake on my part. After a couple of weeks of loving You Need A Budget's smooth workings, and getting excited about how the monthly categories move forward every month in a quasi Dave Ramsey esq virtual money envelope system, it all came to naught and I tossed the software in the recycle bin. Why? Three huge drawbacks for me: No way to categorize autodeductions of the paycheck. I do a lot of autodeductions, which is one way I have been building my portfolio into the the very low 6 figures (FINALLY!) I need to track that functionality. The answers o

Personal Financial Planning

All of us could use a little help from time to time, especially in the financial arena. This is a guest post by Edward Clark, of the Lohengrin Group , a financial planning service located in the deep South. He describes how financial planning helped one of his clients save her million dollar nest egg that had been hatched from the poorest of beginnings. "Sonia came into our office with a tale that should be in a book. She wiped her glasses with a beautiful handkerchief with her initials on it and said, “OK, but it’s kind of complicated.” And off she went. Sonia’s story was so captivating that we just listened as she spoke for half-an-hour. She said that she was born in Russia well after the Communist revolution, and was caught in the ongoing chaos that ensued after the Communists took charge, but before the 2nd World War started to creep into the region. Renegade soldiers went through villages in her part of the Ukraine, searching for Jews, literally raping and pillaging peaceful

Personal Budgeting vs. A Spending Plan

The origin of the term "budget" is debatable, but most sources track it back to the french or Latin words for bag or pouch. I don't use a budget. I don't like the idea of having a small bag determine how my financial life flows, it's too restrictive. I prefer to think of my monthly cash flow as a spending plan. It gives a feeling of bounty, when in fact, many of us who feel poor are actually rich in resources. For example, my spending plan includes $200 per month for health insurance. I don't see that as an expense, I see it as something that I purchase in order to protect myself and my family from catastrophic financial burdens. That's a good plan! The most important spending plan that I ever ran across is called The 60% Solution by Richard Jenkins on MSN money. He was wondering if adding all these receipts in personal software was really helping him control his money. Here is an excerpt from the article: "After analyzing our spending patterns over

Why This Blog Exists

I was a widow with a young child just ten years ago and my husband left so little money that I had to borrow to pay his funeral expenses. Learning personal budgeting skills saved my small family and it might save yours. I devoured every financial planning book on the market, many of them are recommended in my blog like Dave Ramsey's Financial Peace and Andrew Tobias' The Only Investment Guide You'll Ever Need. Learning from others lifted me out of financial despair. That information, mixed with a lot of encouragement from friends along and a full-time job with benefits, steadied me along as I rebuilt my life. These books and these tips on the blog allowed me to finance my child's sub-Ivy league college education and build a year of emergency account funding now stashed in very safe investments in ING Direct savings bank accounts. This is not professional advice, just sharing of a journey. Learning to manage money, while still enjoying the wonderful things in life (a

How To Become a Millionaire

The old adage is that if you want to be someone, then act like they do. Dress For Success books are built around the idea that if you want to be the boss, you have to look like bosses look. This is the first post in a series on how I've used good personal finance books to build a six-figure nest egg over the past 9 years . Maybe these steps will work for you! Now I know that the odds of me becoming a Millionaire are pretty slim, considering my age and the big bumps in my history. But I know I can do better than I am doing now because I have a history of success -- and you will too, if you follow at least some of these steps. So I'm working millionaire habits into my life by doing some of the things (not all of the things) that millionaires do as outlined in several books, the first of which is The Millionaire Mind, by Thomas J. Stanley, Ph.D. I've recommended it before, and continue to learn more from it. Here is how you can follow some of the advice from that book and add

How Long to Keep Tax Records?

I found this simple to follow info on the Unclutterer Blog which I linked to from the Almost Frugal blog. I recommend them both. Uncluttered has a wonderfully obsessive group of people who share ideas. The tax retention info is a table format that gives you a template to follow for tax info. Don't let fear of paperwork and taxes keep you from investing and saving! How Long To Keep Records

Earn 7% or more with Lending Club

I'm kinda' scared and feel a bit silly...I took a risk and lent someone some money over the internet in order to take a chance on earning 7% or higher. This isn't like me at all! But INGDirect's 1.5% is just not going to get that new pair of shooz and the -25% on my retirement fund means I'll be of the working and stressed out masses even longer than expected (which is, basically, forever). Several of the frugal bloggers and money bloggers have mentioned the on-line lending companies, where you sort of act like a micro-lender, with the site as the go-between. It's called "Peer Lending." I've read enough about the service to finally give it a shot. I spend $100 on a great night out on the town...why not take a small, calculated risk that might help out a service trying to go fill a need that the financial institutions are missing. It's pretty simple. 1st - I funded my Lending Club account with $100. That took a couple of days to process throu

Louisiana Section 529 Plan is #1

A real life example of how you can send your child to an Ivy League college, even if you are a single, middle class Mom. 529 plans are a huge help. I deposited $10,000 of my house sale proceeds into a 529 plan gauranteed interest only account for my daughter last year. Earnings: $900 - The Louisiana plan matched my $10,000 deposit with a 9% addition to my account in part based on my AGI (under $50,000). $634 - in contribution interest. $126 - state tax credit That's a 16.6% return on the $10,000 investment, 15% if you don't live in the state. And you don't have to live here to take advantage of the Louisiana 529 plan. The money in the 529 plan is going to pay for her apartment rent, food and tuition not covered by scholarships. The tuition not covered by scholarships each year is about $5,000. Whew. She's a Junior! Check out Louisiana's 529 plan here. I don't work at the Louisiana Office of Student Financial Assistance and make no money for promoting it.

Easter Dinner Deal from Wal-Mart - frugal and fabulous

According to the National Retail Federation’s 2009 Easter Consumer and Action Survey, you will be heading out to a discount retailer sometime before the Easter holiday is over. And your average Easter bill of $135.03 for candy, gifts, food and decorations will be down to $116.59. If you run your household and budget like most of us, the researcher’s crystal ball predicts that your biggest expense will be in preparing a meal, with “the average person expected to spend $37.67 on food, down from $41.09 from last year.” When I was deep in Mom Land, my biggest Easter expense was on church shoes and clothes for the family, and we skimped a bit on the meal. Other expenses included cards to far-flung family members and an Easter basket or two. This year I will probably spend the most money on gas dollars to travel to see friends and family during the long Easter week-end. The survey found the majority of people (64.0%) will bargain shop at discounters this year, up from the 58.8 percent w

Personal Care Spending Patterns

The story in Real Simple magazine on what people spend on average in certain categories is intriguing. (see post from April 2nd, 2009). I had no idea I spent more than the average bear on personal care! has a nifty feature where you can analyze trends in your spending by category, comparing it to other cities and the US as a whole. According to my program, the US is spending between $89-$120 per month on personal care...which includes hair cuts. It seems hair cuts/color, etc., is the big swing factor. My highlights run about $120 every six weeks, and a cut is about $35. I've gone an extra week between coloring before, which could save me $120 a year. Shampoo is pretty expensive too, especially if you color your hair -- that investment has to be protected! Real Simple Magazine editors suggest measuring the shampoo used very carefully. A quarter sized dollop is about all you need. Personal Care spending is not an area I want to skimp on too much. It's

Spring Home Spruce Up on a Shoestring Budget

I realized during my quarterly spending audit that I'm woefully underspending in decorating my abode, and it's starting to show. I'm embarrassed to have people over, and having people over for my tutoring/coaching business is crucial to financial success in my side income stream. But how do I spruce things up without spending all my revenues on home furnishings? More ideas from Real Simple Magazine that I'm going to try are below. I'm going to start small, but try to buy great quality items that will last. The bathroom shower curtain comes first, along with some new towels for the guest bath. and, here I come!

First Quarter 2009 Spending Audit

How do you know if you are spending too much in any one category? Or if there is room for you to reasonably spend more on a particular category in your budget? Pinching pennies too hard can cause any reasonable adult to splurge on impulsive buys, which is counter to Real Life Money's purposeful spending that leads to satisfaction (not a credit card hangover) The average person spend $2775 a year on home improvements . The good news here is that I sold my house last year and don't have any home improvements! The bad news is that I need to buy some household furnishings like a bed, shower curtain, new bedding, new furniture. I suppose I can hold off on that for awhile. The average person spends $588 per year on personal care products . I've spent $275 on personal care products and it's only April 1st. May need to tighten the belt here. The average person spends $749 a year on clothing . I've got $960 budgeted to spend each year on clothes, and I've already