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Budget, updates, and the future

Finance

I have recently reworked our budget, including a new spreadsheet, sorted by categories. It’s a Google Doc template available here. I will dive into each section in detail in coming weeks.

My wife and I had a long conversation about what has worked and what has failed miserably regarding our debt and repayment plan. The results of that conversation will be the subject of a few posts over the next couple of weeks.

Our destination hasn’t changed. Our map hasn’t changed. We are making some changes to the route we take, to allow better for our strengths and weaknesses, both as a couple and as individuals.

 

Money Problems – Day 5: Boosting Your Income

Finance

Pizza Delivery Bike
Image by Kevin H. via Flickr

Today, I am continuing the  series, Money Problems: 30 Days to Perfect Finances.   The series will consist of 30 things you can do in one setting to perfect your finances.  It’s not a system to magically make your debt disappear.  Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.

I’m not running the series in 30 consecutive days.  That’s not my schedule.  Also, I think that talking about the same thing for 30 days straight will bore both of us.   Instead, it will run roughly once a week.  To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.

Today we’re going to look at ways to boost your income.

People spend a lot of time talking about ways to reduce your expenses, but there is a better way to make ends meet.  If you make more money, you will—naturally—have more money to work with, which will make it easier to balance your expenses.  I’ve found it to be far less painful to make more money than to cut expenses I enjoy.

I can hear what you’re thinking.  It’s easy to tell people to make more money, but what about telling them how?  Guess what?  I’m going to tell you how to make money because I rock.

By far, the simplest way to make more money is to convince whoever is paying you to pay you more for what you are already doing.   In other words, get a raise.  I know that’s easy to say.  Money’s tight for a lot of companies and layoffs are common.   None of that matters. Your company knows that hiring someone new will involve a lot of downtime during training.   If you’ve been visibly doing your job, and the company isn’t on the brink of failure, it should be possible to get a bit of the budget tossed your way.

  • The first thing you need to do is get visible.  If you habitually come in 15 minutes late, make it 15 minutes early.  If you are working an alternative schedule, consider switching to the standard schedule, so everyone who matters can see you are at work.    Start sending status updates to your boss, including copying him on emails to other people you work with, if those emails signify important milestones in a project.
  • Next, log your work. Keep track o what you do, what you’ve accomplished, and—most important—how much money you have made or saved for the company.
  • Third, do your research. Hit the salary survey sites to find out what other people in your field are making.  Don’t worry if you are on the high side.  There is always someone making more than you.  If you are the exception to that rule, try using a similar variation of your job description and title.   What’s the concrete difference between a software engineer I and and a software engineer II?  About $15000.
  • Finally, schedule a meeting with your boss and ask.  Lay out the things you’ve done, the amount you make for the company and what other companies are paying.  Chances are, your boss will have a hard time refusing your request.

Another simple idea is to get a second job. Personally, I hate this idea, but it works wonders for some people.  Gas stations and pizza stores offer flexible schedules and they are always hiring.   If they aren’t willing to work with your schedule, or it doesn’t work out, you can always quit.  This isn’t your main income, after all.

My favorite option is to create a new income stream.   What can you do?

Take a piece of paper and a close friend and brainstorm how you can make some money. Write down every type of activity you have ever done or ever wanted to do.   Then write down everything you can think of that other people who do those activities need or want.  Remember, during a brainstorming session, there are no stupid ideas. Take those two lists and see if there is any product or service you can provide.

You can start a blog—although don’t expect to generate much money early—or try writing for some revenue-sharing article web sites, like hubpages or squidoo.   Other options include affiliate marketing, garage sale arbitrage(buying “junk” at garage sales, fixing it up and selling it), or even doing yard work for other people.

One interesting business I’ve seen lately is a traveling poop-scooper.    These people travel around and scoop poop out of ddog-owners’ yards.  Business booms in the spring when the snow melts, but it can be an ongoing income, since dogs don’t stop pooping.

Raising your income can make it easier to pay your bills, pay off your debt, or even taking nice vacations.  How have you made some extra cash?

 

 

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Tips to budget successfully

Finance

This is a guest post written by Andreas Nicolaides, a financial author for UK based MoneySupermarket.com.

Whether your aim is to save money for a special occasion or you just want to make sure you don’t have to struggle financially when it comes to the end of the month, a budget can be a saving grace. Budgets help us quickly and easily identify our total income and all our expenditure, allowing us to plan for the best and prepare for the worst financial situations.

Set yourself a target

 

If you have decided to set up a budget, then there must be a reason. Are you looking to save for an upcoming event? Or maybe you have realised that you are struggling to make your payments every month and you would like to feel more financially secure. Based on what you would like to get out of your budget, you should set yourself a specific, measurable objective.

My first objective I set for myself was to save $100 every month for a year. This sort of objective is easy to manage and easy to monitor and this is what we are trying to achieve. One important thing I would mention here is to ensure your objective is achievable; don’t set yourself a target that is too far out of your reach, being realistic is extremely important.

How do you set up your budget?

The main key thing when you start to put your budget together is to make sure you’re as honest as possible. Get yourself a pen and some paper and on one page detail all of your income. Include the obvious and also remember to include any benefits you are entitled too. Then grab another piece of paper and detail all of your monthly outgoings, remember to be honest and thorough and try not to forget anything. Once you have both figures, deduct your expenditure from your monthly income that will give you your monthly figure.

You have some extra cash?

 

If when you have your figure you realise that there is some cash left over, you can then decide what you want to do with it. My advice here depends on your own personal circumstances, for example if you have high levels of debt, your main aim should be tackle your high interest debt aggressively and as often as possible.

If you have some money left over and your aim is to save, then set up an interest bearing bank account. If you are based in the US then you could look to set up an LSA or lifetime savers account. In the UK we have the equivalent, that is called a cash ISA saving account.

No money left over?

 

If after working out your budget you find you have no money left over, then you need to do something about it. Debt is one of those things that won’t just disappear overnight; it’s something that takes time and commitment, but not giving up is paramount.

How to cut down your expenditures?

 

One of the main things you can do when you realise you are in a bad situation is to try and cut down on your expenditure. Here’s a couple of quick ways:

  • Use price comparison sites – These sites are great to check and see if you are paying too much on your bills, and if you are, you will have a list of fantastic options available for you to choose from. This is a great way of saving money on things like your car insurance, see here.
  • Sell unwanted items – Selling unwanted items is a quick way to making some cash, everyone has them around their home, so why not make use of them instead of letting them build up dust?
  • Cut down on your spending – Try to avoid buying luxuries and try to stick to a specific shopping list when out doing the weekly food shop, this will help you avoid unnecessary purchases

A budget is used by many just to monitor what they spend month to month, but I hope I have detailed how it can be a helpful financial tool that can help you reach your financial goals. I hope my tips to budget successfully will help you get started on your way to financial freedom.

 

Sunday Roundup: Diet Redux

Misc

Emergency "Twitter was down so I wrote my...
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I had total diet fail last month.

From April to May, across 4 consecutive weekends, I put a bit over 1500 miles on my car on 4 separate trips.  That is something like 10 times my average mileage.

That’s a lot of driving, squeezed around a regular schedule of work.   Have you ever tried a drive through for low-carb food?   Because of that, and the circumstances of some of my trips, I abandoned my diet on those weekends.   Funeral food is rarely low-carb.

By the time those trips were over, I had spent so much time off my diet that “What’s one more sandwich?” became an easy justification.  There is a reason I don’t break the rules I give myself.  I can’t seem to cheat just once.  Once I cross that line, it’s over.

So, instead of cheating on my diet and feeling guilty, I officially dropped it for most of the month of May.  I decided it would be easier to get it out of my system than to continue worrying about it.

May’s over, and I’m back on the Slow Carb diet.  My little fail cost me 7 pounds and 6.5 total inches(waist , hips, biceps, and thighs).  I’m reasonably sure that most of that is water and will evaporate before next weekend.

Best Posts

My goal is to live my life so that I have no regrets at the end of it.  That means pursuing my dreams and doing the things I love.

It’s easier to do the things I love when my life isn’t weighed down by the crap I don’t need.

Sweating the Big Stuff wrote a killer post on saving money simply by asking.  Often, the easy things work.

Carnivals I’ve Rocked and Guest Posts I’ve Rolled

Shopping Online: The Money-Saving Secret was included in the Festival of Frugality.

Money Problems: Paying Off Debt was included in the Carnival of Personal Finance.

5 Ways to Help Your Friends Stay Out of Debt was included in the Totally Money Blog Carnival.

Should Pupils Focus on Personal Finance was included in the Yakezie Carnival.

 

Thank you! If I missed anyone, please let me know.

Get More Out of Live Real, Now

There are so many ways you can read and interact with this site.

You can subscribe by RSS and get the posts in your favorite news reader.  I prefer Google Reader.

You can subscribe by email and get, not only the posts delivered to your inbox, but occasional giveaways and tidbits not available elsewhere.

You can ‘Like’ LRN on Facebook.   Facebook gets more use than Google.  It can’t hurt to see what you want where you want.

You can follow LRN on Twitter.   This comes with some nearly-instant interaction.

You can send me an email, telling me what you liked, what you didn’t like, or what you’d like to see more(or less) of.   I promise to reply to any email that isn’t purely spam.

Have a great week!

 

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Where the hell have I been?

Finance

For the last year or so, I haven’t been writing much, which feels weird.  I used to write three timer per week.   I’d write about saving money, investing, frugality, sometimes, relationships and parenting.2016-01-13 18.51.30

But that stopped.   Why?

When I started this site, I was about $110,000 in debt, and just starting my journey out of it.  A few months before, I was looking into bankruptcy, because I didn’t know how to get out of debt.

For years, the ways I saved money, cut corners, and earned extra money was fodder for this site.  Everything I did was about saving money, earning money, and paying off debt.

Now?  I’m about 2 months away from being completely debt-free.   I paid my mortgage off last month, and have about $10,000 in credit card debt at the moment.   I know, I paid that off backwards, but there are reasons.  Reasons I’ll share another time.

4 years ago, I was essentially working 4 jobs.   My day job, my gun training business, my internet marketing business, and my websites(including this one).   I was working all of the time.   It was necessary, but it’s a path to burnout.   Then, I changed jobs a couple of times, nearly doubling my day job’s pay.   My business partner got promoted out of a position that generated leads for one of our businesses, then had an accident that the other shared business on hold for a while.

Suddenly, I had free time and enough money coming in that I didn’t need to work all of the time.   It was a crazy place to be after spending more than a decade pretending to be a workaholic just to keep my head above water.   (Here’s a secret:  I’m incredibly lazy.  I’m just the busiest lazy man I know.)  So I started pursuing hobbies.

Linda and I have been taking ballroom dancing lessons and are nearly to the point that competing is a real possibility.

I cleaned out my garage and assembled a decent wood shop, which is something I’ve wanted to do roughly forever.2015-12-25 14.49.08

I’ve been taking blacksmithing lessons with my teenage son.

I’ve been playing games with my kids, dating my wife, and simply enjoying my life.

This site?

Through all of that, I haven’t known what to write about.

“Dear audience, this month, I paid my bills, didn’t go on vacation, and bought a drill press.”

“Dear audience, my debt went down another $500 this month.”

“Dear audience,  I didn’t buy a car I can’t afford this month.  Again.”

Those aren’t good articles.   Financially–while paying off debt is disturbingly exciting–my life is very repetitive.   That’s the hardest part about paying off a lot of debt.   It’s good, it’s necessary, it’s boring.   My wins have been spaced out by several years lately, and I haven’t been creatively frugal.  Screw frugal.   If you can afford some conveniences and luxuries, frugal sucks.

Anything new happening in my world that would apply to this site would make it read like an accountant’s ledger book.   $100,000 minus $1500 plus $10,000 minus $300, ad nauseum.

Instead of inflicting boring accountancy on you, I’ve been absent.

What next?   Who knows.   I enjoy writing.  I enjoy writing here.   I’ve started writing a novel.

What would you like to see here?

 

 

My Financial Plan – How I Improve on Ramsey

Finance

In April, my wife and I decided that debt was done. We have hopefully closed that chapter in our lives. I borrowed, then purchased, The Total Money Makeover by Dave Ramsey. <a href=budget” width=”300″ height=”213″ />We are almost following his baby steps. Our credit has always been spectacular, but we used it a lot. Our financial plan is Dave Ramsey’s The Total Money Makeover, with some adjustments.

Step 1. Budget:

The budget was painful, and for the first couple of months, impossible.  We had no idea what bills were coming due. There were quarterly payments for the garbage bill and annual payments for the auto club.  It was all a surprise.  Surprises are setbacks in a budget.

When something came up, we’d start budgeting for it, but stuff kept coming up. We’re not on top of all of it, yet, but we are so much closer. We’ve got a virtual envelope system for groceries, auto maintenance, baby needs(we have two in diapers) and some discretionary money. We set aside money for everything that isn’t a monthly expense, and have a line item for everything that is. My wife is eligible for overtime and monthly bonuses. That money does not get budgeted. It’s all extra and goes straight on to debt, or to play catch-up with the bills we had previously missed.  I figure it will take a full year to get all of the non-monthly expenses in the budget and caught up.

Step 2. The initial emergency fund:

Ramsey recommends $1000, adjusted for your situation. I decided $1000 wasn’t enough. That isn’t even a month’s worth of expenses. We settled on $1800, plus $25/month. It’s still not enough, but it’s better. Hopefully, we’ll be able to ignore it long enough that the $25/month accrues to something worthwhile.

Step 3. The Debt Snowball:

This is the controversial bad math. Pay off the lowest balance accounts first, then take those payments and apply them to the higher balance accounts. Emotionally, it’s been wonderful. We paid off the first credit card in a couple of weeks, followed 6 weeks later by my student loan. Since April, we’ve dropped nearly $10,000 and we haven’t made huge cuts to our standard of living.    At least monthly, we re-examine our expenses to see what else can be cut.

Step 4. Three to six months of expenses in savings:

We aren’t on this step yet. In step 2, we are consistently depositing more, making us more secure every month.

Step 5. Invest 15% of household income into Roth IRAs and pre-tax retirement:

I have not stopped my auto-deposited contribution. It’s stupid to pass up an employer match. My wife’s company does not match, so she is currently not contributing.

Step 6. College funding for children:

We have started a $10 College fund.

Step 7. Pay off home early:

I don’t see the point in handling this one separately. Our mortgage is  debt, and when the other debts are paid, we will be less than a year from owning our house, free and clear. This is rolled in with step three. All debt is going away, immediately.

Step 8. Build wealth and give!

We have cut off most of our charitable giving. Every other year, it has been a significant percent of our income, and in a few more years, will be so again. The only exception to this is children knocking on the door for fundraisers. I have no problems with saying no to a parent fundraising for their kid, but when the kids is doing the work, door-to-door, especially in the winter, I buy something. My son’s school, on the other hand, gets fundraisers ignored. When they come home, I send a check to the school, ignoring the program. I bypass the overhead and make a direct donation.