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Budget Lesson, Part 4

Finance

Part 4 of the Budget Lesson series.  Please see Part 1, Part 2, and Part 3 to catch up.  The Google Doc of this example is here.

The final category in my budget is “Set-aside funds”.  These are the categories that don’t have specific payout amounts and happen at irregular intervals.  When my car is paid off, there will be a car fund added to the list, instead of a new car payment.

  • Parties –  We throw two parties each year; a Halloween party and a summer barbecue.  We also have three children who have varying expectations and needs for their birthday parties.
  • Gifts – I don’t buy presents for my friends, and the number of relatives I buy gifts for has decreased dramatically over the years.  I do, however, buy birthday and Christmas presents for my wife and kids and I participate in some form of gift exchange with my brothers and their wives.  Combined, we set aside about $100 per month for parties and presents.
  • Pet Care – We have four cats and a dog.  This is to cover cat litter and food the bunch.  We have too many pets, but we can’t give them away.  They are family.  However, there is a moratorium on new animals for a few years.   Two cats and a dog are our hard limit.
  • Car Repair – Cars break.  Tires wear out.  This isn’t a surprise, and it certainly isn’t an emergency.
  • Warranty Fund – We are building up our own “Warranty Fund“, to replace appliances when they break.  I’d rather have the interest accruing than see this as a line-item fee on any of my bills.
  • Medicine/Medical – Kids get sick and prescriptions need to be filled.  We figure our monthly prescriptions plus one office visit per month, but the money accrues in this fund.  On low months, we have more, so we can cover the visits during flu season.
  • In The Hole – This isn’t actually a fund we set aside.  If, for some reason, we go over budget one month, it gets entered here to immediately pay ourselves back for the over-spend.  This month, this number is $170, which is how high we went over for Christmas.  Since we have all of the “Set asides” and non-monthly bills stored in the same account, there was no actual debt, just this “paper” debt to ourselves.  This serves the combined purposes of a mild punishment for overspending and a method to get back on track.

That is my entire budget laid out.   As the series continues, I’ll be examining how I have lowered the bills, how I could lower them more, and how I’ve screwed them up.

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Jason [at] LiveRealNow [dot] net

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5 Personal Safety Apps that Could Save Your Life

Life

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No one likes to think about the possibility of dying too young. But knowing that potential exists, you take the smart step of protecting those you love by carrying term life insurance. But what about preventing the worst? Did you know your iPhone or Android device can call for help or record vital information if you ever find yourself in a life-threatening situation? Here are five personal safety apps that could save your life.

1) myGuardianAngel

Once this app allows you to reach all of your emergency contacts with the push of one button. You enter the contact information for anyone you would want to get in touch with if you were in any sort of emergency as soon as you download it. If you are in an emergency, the app will call your contacts, send them an e-mail with your GPS location and immediately begin recording audio and video from your phone.

2) StaySafe

This app is good for anyone who works or travels alone. You can schedule the app to automatically notify friends or family after a certain period of time when your phone is inactive. For example, you can estimate how long you expect to drive from one location to another on your own and then the phone will contact someone automatically if you are out of contact longer than expected. That way your friends will know to send help because something is wrong, even if you aren’t in a position to contact them yourself. StaySafe sends your contacts a detailed GPS location for you so that they can easily find you and bring help.

3) RESCUE

This full-service app can help you on the scene as well as notify your emergency contacts for you. If you are in trouble, you can trigger the app to sound a loud alarm that might frighten off anyone who might be planning to do you harm. The alarm can also help someone find you if you are lost or unable to move from your current location. When the alarm is triggered, the app will also send immediate notifications to your emergency contact list so that they can begin to send help right away. Emergency services such as the police and fire department can also be set for notification through the RESCUE app.

4) Night Recorder

This is a good app to have when you need to make a quick recording of your surroundings for any reason. The app can be set to begin recording at a touch. If you are stranded, you could create a recording by speaking about the landmarks you can see and explaining how you got to your current location. The recorder can then send an email of your recording to anyone on your contact list.

5) iWitness

With this app, you can instantly make video or audio recordings of your situation so that there is a permanent first-hand record of everything that happens. It is a handy tool for anyone who has been in a car accident or involved in a medical emergency because you can go back and look at the video to see exactly what happened if there is any question about it later. The app will also contact emergency services or your personal emergency contacts if you are in trouble. The built-in GPS locator will transmit your exact location so that people can find you quickly and easily.

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Budget Lesson, Part 5

Finance

I’ve explained my budget in some detail already.  See these posts for the history of this series.

Now, I’m going to go through each section, reviewing ways that I can reduce, or have reduced, my spending.  I’ll be starting with my monthly payments.

  • House Payment – I’ve mentioned that we have a small house payment.    A few years ago, when the interest rates dropped to almost the lowest point they reached in that particular cycle, we refinanced and got in under 5%.   There is nothing to cut.  We won’t refinance again, and the loan will be paid within 7 years, according to the lender’s schedule.  I’m aiming for 4 years.
  • Netflix – We’re on the 2 DVD/unlimited plan for $13.99.  We could drop down to the single DVD plan, but I’m worried that will trigger a rash of movie-buying.  2-at-a-time scratches that itch well.  I don’t think we’ll be reducing this plan in the foreseeable future. [Read more…] about Budget Lesson, Part 5

10 Ways to Secure Your Kids Against Debt

Finance, Parenting

Everybody wants their children to do well.  I want my kids to grow up without making my mistakes.  Here are a few ways to help them avoid debt.

  1. Talk to your kids about money.  Your kids will never learn how to handle their finances if nobody teaches them how.   This is important.    The factor that contributes most to stress, divorce, long hours, and unhappiness can’t be left to chance.
  2. Set a good example. Spend less than you have and let them see you doing it.  No matter what you tell your kids, if they see you doing otherwise, they will learn the bad lesson.   Money, work, relationships.  They all need attention, and your kids are watching you manage each of them.  Make them proud.
  3. Open a savings account for them, and let them fill it. Teach them the value of their money by letting them work for it, watch it accumulate, and spend it on something they care about.  I make my kids work to convince me to make a withdrawal, so they know it is only for the important things.  I don’t, however, decide what is important for them.
  4. Start a college fund. $100 or $10, it doesn’t matter.  Start putting something aside today.   College costs keep rising.  In 10 years, or 20, you can be sure that college will cost more than it does today.  Last year, nearly two-thirds of students graduating with a four-year degree did so with an average debt of more than $23,000.   Anything you can do to move your kids towards the debt-free 35% will help.  They will thank you for it for the rest of their lives.  Remember, they are in charge of choosing your nursing home.
  5. Teach delayed gratification. Don’t let them think that every whim needs to be satisfied…ever, let alone immediately.  Sometimes, anticipation improves the act.   When I am looking forward to a good meal for a few days or weeks, I really savor it when I finally do get the chance to eat it.  If they want everything they see, make them figure out what they want most, and what it will take to get it.
  6. Teach them to balance a checkbook. This is one of life’s basic skills that far too many people are lacking.   If you can’t balance your checkbook, how do you know what you have?  If you don’t know what you have, how can you know what you’re able to spend on necessities, or even luxuries?  Knowing where you are is at least as important as knowing where you are going.
  7. Give them control of money. This is the best time to learn how to manage money.  Give them an allowance and make it big enough to cover school lunch and bus fare.   Let them practice real-world skills and, more importantly…
  8. Let them make mistakes with it. This is their opportunity to make financial mistakes that won’t haunt them for years or decades.   Let them have some money and let them screw it up.  When they can’t buy the new game, or can’t fix their car, they will learn.  It’s better to do that as teenagers living at home than as adults forced to move back home.
  9. Let them see your pride in their good decisions. If they do well, tell them.  Let their endorphin rush come from your praise instead of their purchase.  You aren’t helping them by getting them hooked on the latest gadget.  You are helping them by making them feel good about making the right decisions.
  10. Beat them with a stick.

How do you protect your kids’ future finances from the kids themselves?

 

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Budget Lesson, Part 1

Finance

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Over the next few weeks, I will be going over my budget in detail.

The first section is income, but that’s straightforward.  A line for each income source, bi-weekly, monthly and annual totals.  Simple.

Before we start, a word on the organization.  There are five columns:

  • Category – This is the description of the line item.
  • Cost – How much do you pay for this item?
  • Time – What is the frequency of the payment?  Valid values are ‘m’, ‘q’, ‘y’, ‘w’ for ‘Monthly’, ‘Quarterly’, ‘Yearly’ and ‘Weekly’.
  • Monthly – Cost and Time are combined to calculate the monthly expense, to make it possibly to budget.  If this is $100, I need to set aside a C-Note each and every month to make the payment when it comes due.
  • Yearly – This column is mostly informative.  It’s helpful to see this in comparison to my annual pay.

The first section I am actually going to address is discretionary spending.

  • Groceries/Dining    $475.00 – We don’t budget heavily for groceries, which would be a surprise if you saw me.  At the smallest I have ever been, fit, I was never small.  We shop smart, buy in bulk when it makes sense, and rarely eat out.  We also keep cooked rice and beans in containers in the refrigerator as a cheap and healthy way to stretch almost everything we eat.
  • Discretionary    $250.00 – This gets used for household items, like toilet paper and soap.  It also get used for the odd book or movie, or to cover the gaps between the other categories and reality.
  • Baby stuff    $60.00 – We have two children in diapers.  ‘Nuff said.  This category does get progressively smaller as the baby items are outgrown and the children get potty-trained.
  • Gas/oil    $200.00 – Gas and auto-maintenance.  This is actually higher than monthly costs, allowing us to set some aside for larger maintenance issues.
  • Clothes    $15.00 – All of our dressers are overflowing, so this is strictly replacement cost for the time being.  Our kids wear a lot of hand-me-downs.
  • Blow Money    $50.00 – Occasionally, habitual shoppers need to shop.  If they don’t do it on-budget, they will do it off-budget and kill the whole idea.

Initially, we used a “virtual envelope” system.  We had a spreadsheet and every time something was spent in this category, we entered the amount and stopped when the category was spent.   Didn’t work.  We are going on a pure, cash-only system as of the first of the year.  No money, no spendy.