Hiding Purchases From Your Husband is So 1950

March 29, 2017

When I was a little girl, I remember my great aunt sending my mom money with a note that simply said, “Please don’t send a thank you note. I don’t want my husband to know.” My great uncle was a bit of a curmudgeon and my aunt would have suffered for her generosity. I also remember my grandmother taking me shopping for back-to-school clothes but telling me to leave everything in the car when we went back to her house so my grandpa wouldn’t know she was spending money. Sound familiar?

A lot of us grew up with this example and continue to exhibit similar behavior in our lives today. Have you ever rushed to put purchases away in the closet before your husband could see or stuffed your Lululemon purchases into your purse before walking into the house to avoid a potential fight about overspending on perceived wants versus needs? How about hiding a Target splurge on stuff for your kids?

While these actions may have been slightly justified back in our grandma’s day, these are all examples of financial infidelity. Just like if you were deleting texts between you and a male coworker to avoid a fight with your husband, hiding purchases from him is the same behavior. It’s a violation of trust. What do you really have to hide?

Back then, women didn’t have as many choices when it came to careers and having their own money or even sometimes in choosing a life partner. I will never forget the day I nervously broke the news that my first marriage was ending to my grandmother. Her response surprised me.

She said, “Good for you. You will do just fine. If I’d had a career and options like you, neither one of my marriages would have lasted.” And while I didn’t relish the thought of anyone I love feeling “stuck” with someone else I love, I understood what she meant and she was right. The big difference between back when my grandmother had to sneak spending behind my grandpa’s back and today is that if you find yourself in a marriage where you truly don’t have economic power, you have the choice to work it out or leave.

I’m not saying you shouldn’t have the autonomy to make your own purchasing decisions – quite the opposite. You may never get on the same page with your spouse about the value of spending on certain things like clothes or wine or electronics or name the thing that causes money fights in your marriage. But there are ways to solve that without hiding purchases such as having separate spending accounts where you agree that you each can do whatever you want with that money with no judgment and no arguing. The kicker is that you both have to stick to the agreement where you only spend that money and not other money that’s allocated towards your family’s goals.

It may be a challenge to arrive at an amount you both agree on for your spending money. When a spender marries a saver, the saver will always want to spend less, but there are logical ways to arrive at that number. Start with your shared goals like retirement, paying off debt, saving for college, etc. Assign a number to those goals and calculate what it will take to get there and agree together whether that amount is reasonable or if you need to modify the goal. Getting on the same page about this helps you both feel responsible for your part in achieving that goal and should help the saver partner relax a little bit about spending on things they don’t perceive as necessary.

Kelley Long is a resident financial planner with Financial Finesse, the leading provider of unbiased workplace financial wellness programs in the US. For more posts by Kelley or to sign up to have her weekly post delivered to your inbox each Wednesday, please visit the main blog page and sign up today.

Why Is Your Budget Failing?

February 21, 2017

Why is my budget failing? My friend asked me this question a few days ago. She has been trying to budget for the last few years and just can’t seem to stay on track. I told her that I have found that there are some common reasons why budgets fail and if she addressed the following common reasons why budgets fail, she can become a successful budgeter:

1. Budget categories bursting at the seams. Years ago, I worked with a woman who was diligent about creating and tracking a budget but struggled to handle emergencies. When I looked at her expenses, I saw that over 50% of her spending was her mortgage and 30% was a car payment. There was no wiggle room to handle emergencies. Luckily, she was able to get a roommate and downsize her car. Consider reviewing articles like this one as a starting point as to how much to spend in each budget category.

2. Not sticking to your budget. A budget only works if you actually follow it. I always tell people that there are two parts to a budget. One is forecasting what your spending needs are for the month and the other is tracking. If you are not doing both then it will be hard to stick your budget.

3. Using the wrong budgeting system. Using the wrong budgeting can make budgeting feel like a dreaded chore. If you hate technology, use a budgeting worksheet and either a notebook to write down expenses or keep receipts in an envelope. If you are comfortable with spreadsheets then use Excel, which can do the math for you. If you want more features then explore the various online budgeting software programs and find out which best matches how you want to budget.

4. Unrealistic Budgets. My friend had a family of seven that wanted to budget $350 a month for food.  Considering she had five very tall teenage boys to feed, we decided that her budget was not realistic. If you find that you are constantly going over certain budget categories, consider increasing your budget and maybe using cash for purchases in that category. Also be honest with yourself. If a Mocha latte or a manicure keeps calling your name, just put the expense in your budget.

5. Not changing the budget with life changes. It’s rare that your spending is the same every month. As gas prices, food prices and your utility bills change, so will your budget. Be flexible and adjust your budget to accommodate changes in your expenses.

Now, these aren’t all of the reasons why budgets fail. But if you are struggling with your budget, the list above gives you a good starting point. With a few tweaks, most people can become budgeting gurus in no time!

Don’t Pay a Multiple of a Car’s Sticker Price

February 17, 2017

Anyone who has ever been a passenger in my car knows that I am not a big fan of buying new cars very often. My last two cars got to 250,000 and 300,000 miles before I sold them for parts. My current car is a 2002 with over 150,000 miles on it and I’m hoping to get this one to 300,000 miles.

Living on the East Coast, with all the snow and salt, bay/ocean water and sand, the exterior of cars can take quite a beating.  Mine certainly has. That doesn’t even count the kid who rode his bike directly into my driver’s side rear door, leaving a gigantic dent and paint scrape. Needless to say, my car isn’t going to win any beauty contests, but I haven’t had a car payment in a decade or so. I’m not much of a “car guy.”

That’s why when I read this article about negative equity in car loans reaching an all time high, I found it very alarming. Negative equity, for those who are unfamiliar with the term, is not a wonderful thing. If you owe $10,000 on a car that’s worth only $7,500, you have $2,500 in negative equity. Just about 1/3 of all new car purchases in the first three quarters of 2016 had trade-ins with negative equity and that negative equity was, on average, just over $4,800. That’s nearly $5,000 on top of an already fairly expensive purchase.

To me, this is a huge warning sign about how we think (painting with a broad brush here) about the value of a car. To me, a car is just a way to get from Point A to Point B quickly without needing to walk in the rain. To a lot of people, the type of car they drive is a reflection on who they are as people and they are willing to make questionable financial choices in order to have their car reflect the values that are important to them.

If I owned a coffee shop (I’ve been watching Friends episodes with my kids, so Central Perk is stuck in my head) and would sell you a cup of coffee for $3 but would charge you $8 if you drank half and asked for a new cup, how many new cups do you think I’d sell? I’d hope ZERO! But that’s what we do with cars. We (the folks with negative equity) drive them for a while and before we are finished with them (like getting to 300,000 miles), we trade them in for a much more expensive but shinier model and we add to the cost with that troublesome negative equity.

If a person repeats this pattern a few times, they might end up paying almost twice the sticker price for a car. If you add in the cost of interest on a car loan, it could be 3 or 4 times the sticker price. There’s not a car in the world that I’d pay that much for.

I wrote a while ago about how to save money when buying a car, and I still very much believe in that philosophy when buying a car. If you use it, or something similar, you can avoid the ever-growing problem of negative equity in your next car purchase. As pricey as cars are today, don’t let yourself pay a multiple of the sticker price.

 

 

How an Argument on Valentine’s Day Made Our Marriage Stronger

February 14, 2017

When I think of Valentine’s Day, I always think of my first Valentine’s Day after I got married. We were new homeowners undecided as to how to decorate our home. I am a saver and I wanted to bargain shop and slowly decorate. My husband is a spender who was tired of walking around empty rooms and wanted to start buying furniture without looking for a deal (gasp). Our discussion, or rather argument, about how we would buy furniture was the first dose of reality that we had very different thoughts about money.

Now, I am sure some of you are asking yourselves why she is talking about an argument on Valentine’s Day. Trust me. I am going somewhere with this. It was not easy, but after we both stopped pouting, our argument made us realize that in order to have peace, we needed to agree on how we will spend money as a couple so over the next few months we came up with a plan to manage our finances together. The following is how we were able to do it without strangling each other:

1. We had money meetings a few times a month. We had a meeting a few days before the new month began to discuss what expenses were coming up during the month and a shorter meeting before each pay period to make sure nothing changed or was forgotten. The longer we did this, the shorter the meetings became. This went a long way to prevent arguments about last minute unexpected spending.  Consider using a budget worksheet as a tool to map out your spending plan as a couple.

2. We set up communication ground rules for the meeting. First, we agreed to obey the principle my kids learned in kindergarten that if you have nothing nice to say, then say nothing at all. We established the budget meeting as a no nagging, judging, and cursing zone with no sarcastic remarks allowed. We also had to give one compliment about how our spouse managed their money. Work with your partner to come up budget meeting ground rules.

3. I agreed to keep the meeting short and my husband agreed to bring his body and mind to the meeting.  I also agreed to be flexible on the meeting times if important events arise, such as my husband’s favorite team playing. Agree on a meeting date and time where both of you can be mentally as well as physically present.

4. We set up 4 accounts: a joint checking account where both of our paychecks initially went into for the household bills, separate checking accounts where money was transferred from the joint checking account for personal spending that we did not have to consult each other on, and a joint savings account. We agreed on how much each of us would get to spend every pay period. Every couple is different, so discuss the best opton for the both of you.

5. We also came up with spending ground rules. For us, it was that we would not spend anything over $100 from our joint account without discussing the purchase with each other. We also agreed that we would not discuss money spent in our personal accounts. I deliberately mentioned this twice because for some couples, it’s important to have personal money you can spend freely.

So as odd as it sounds, our argument on Valentine’s Day was one of the best things that could have happened to us. It led us to getting on the same page about money, which brought us closer together as a couple. As you celebrate Valentine’s Day, consider using the day to go over ideas on how to help you and your partner manage money better together.

 

Is Spending $2 Million per Month a Bad Thing?

February 10, 2017

Well, if you’re Johnny Depp, the answer appears to be a resounding…YES! In a case where Johnny Depp and his former agents are making claims against each other (I have no idea which side’s arguments have merit), there are unconfirmed reports that his spending habits are rather lavish, averaging about $2,000,000 per month. He reportedly paid $3,000,000 for a party that ended with firing the ashes of Hunter S. Thompson from a cannon. Sadly, I missed that party. His prior firm is now suing him for an unpaid loan and he’s suing them for mismanagement of his finances.

This will be an interesting case to watch, and if he needs to generate cash, we may see a lot of Johnny Depp in roles that he wouldn’t have previously taken..or he could sell some islands. For those of us who have never spent close to $2,000,000 in a month, the numbers here seem completely absurd. It’s easy for us to roll our eyes at yet another celebrity who spent money on a lifestyle that isn’t sustainable in the long term.

How many times have we seen this? (Answer: A LOT) How can they not know that this is how the story unfolds? (Answer: It’s THEIR first time handling this much money.)

The interesting thing, at least interesting to me, is that I see this same thing happening on a daily basis, just with much smaller numbers, all over America. Here’s a story of someone I’ve had the pleasure to get to know over the last few years. He works for a big company that is one of our clients and is now, at age 50, ready to make progress in his financial life. He has a great job, a great family, great friends…and about $30,000 in credit card debt that is killing him! He is now struggling to make just the minimum payments on all of his cards.

During a conversation recently, we laughed at how we each made less than $20,000 per year in our first jobs out of college and at that time, we felt like we had more than enough money to live a great lifestyle! Fast forward a couple decades and now he’s earning just over $100,000 and feels like he has less discretionary income than when he was 22 and new to the workforce. As his income went up, so did his lifestyle and spending level.

It’s not quite the reported Johnny Depp level of spending, but it’s not tough to see how that happens. We somehow spend as much as we make, no matter how large the income gets. When that income stops, which we see in sports and entertainment, or slows down – that’s when we see headlines about famous people being broke.

It just happens more slowly and without the press when you aren’t famous. While Mr. Depp owes millions, a normal everyday guy owes $30,000 in credit card debt and it’s incredibly burdensome. Some of it was for vacations, some for car or home repairs, and some was books for college for his son, but it all has added up and become close to unmanageable.

We developed a plan to get him out of debt, which involved cutting back on some spending while increasing income for a 6-9 month window. He and his wife have ideas on how to generate some income thru “gig work” and will use every dollar to pay down credit card debt. Between Uber, Lyft, some handyman work and some graphic design, they will laser focus and work themselves hard for a fixed period of time. The reason I tell their story isn’t for the solution, but more for the parallel that I see between them and Johnny Depp. The numbers may be smaller, but the problem stems from the same behavioral pattern.

What can we learn? As your income goes up, pretend that it doesn’t! Rather than increasing your level of spending, how about increasing your savings rate FIRST!

Get to the IRS limit on your 401(k). Max out your health savings account. Contribute to an IRA. Build a serious emergency fund (a year’s worth of expenses). Once you are there, then allow yourself to increase your lifestyle to meet your income.

How to Create a Budget After Divorce

January 10, 2017

It’s probably not going out on a limb to say that just about everyone knows of someone who either got divorced or is getting divorced. Over the years, I have worked with several people getting ready to divorce and I find many are unprepared for what life is like financially afterwards.  Going from two incomes to one means an overhaul of your finances and for some, a readjustment of their lifestyle. If you find yourself wondering how to put all of this together after a divorce, consider using the following tips to get you on the right track:

1. Know what money is coming in. Review payments you may be getting or receiving from your divorce and adjust your total income accordingly. Typically, child support does not impact your income tax whereas alimony paid can reduce your income and alimony received counts as income. If you are getting or receiving alimony, you can use the IRS tax withholding calculator to make sure you aren’t paying too little in taxes or giving the IRS a large tax-free loan

2. Know what money is coming out. Create a spending plan to account for how much money you need to have monthly to maintain your lifestyle.  Consider ALL  of your expenses beyond  mortgage/rent, car payments and debts. Typically, the most underestimated and forgotten are auto and home maintenance, groceries and eating out.

If you are not sure where to begin, consider using online tools at your bank to find out how much you have been spending. Most online tools will categorize your spending, so first consider adjusting the categories. Then choose a 30-90 period to see what your average spending looks like.

3. Know what the difference is. Subtract your income from your expenses to gauge if you can afford your current lifestyle. If you have a surplus, review your numbers to make sure they are realistic, you have a category for savings and you have a buffer (10% or greater) to account for unexpected expenses (better known as Murphy’s Law).

Also review how much you are spending in each category. For instance the guidance is for household expenses to take up no more than 25%-35% of your net income and auto expenses (car loan, insurance, gas and maintenance) should be no more than 20% of your take-home pay. If you are spending more in those categories, you may not have the cushion to lessen the blow of an unexpected expense. If you have a deficit, then you may not be able to afford your current lifestyle and expenses may need to be cut. This could mean downsizing to a less expensive home, a less expensive car and in some cases, a less expensive neighborhood.

Divorce is hard enough on its own. You don’t want it to cause too many financial problems as well. Taking the time to review your expenses after a divorce can go a long way into making the transition process easier.

What To Teach Your Child About Money Over Winter Break

November 29, 2016

Experience is often the best teacher. My mother told me this often and like most kids, I ignored her. I thought I knew everything when I was a teenager despite my lack of a high school diploma, never having had a job or paid a bill, and being on the earth for less than 18 years.

When I went to college, she gave me an amount of money to spend monthly. I, like most kids, did a horrific job managing my money and I found myself broke within days of getting my monthly allowance. My mother refused to give me extra money. Needless to say, it was a humbling experience.

During my first major break in college, my mother pulled me aside and showed me how to budget. For those of you with kids in college who are floundering with their money, take the time to help them learn how to budget. Trust me. They will be much more receptive after they have tried and failed. The following steps can help your child manage their money better – and create less of a headache for you.

1. Work with your child to create a budget.

At the time I went to school, the Internet did not exist, so my mother helped me create a budget on paper. My budget consisted of eating out, clothes, and entertainment. To her credit, my mother did not roll her eyes over my eating out expenses but guided me into limiting my spending so my money could last. Today, your child can use websites like Mint to manage their money. Help them think through how much they should spend weekly, so they have money for the month.

2. Establish rules for overspending.

This one was easy. My mother said, “Don’t ask me for more money.” She made it clear that if I could not manage my money, she was not going to be “Bank of Mom.” Knowing that there was a limit to my spending scared me into thinking more about how I spent it. Go over the rules for overspending so you and your child are on the same page.

3. Consider a part-time job.

I complained to my mother that the money I was given was not enough. She went over the amount and then how I spent it, which I blew on pizza, clothes and movies. She then told me that her job was not to manage my social life and if I want one, I should get a job to cover the expenses. Immediately, my complaining subsided.

If your child is struggling to manage the money they have, go over their funds with them to assess if the struggle is a result of poor money management or truly a lack of funds. Depending on your child, encourage them to work a part-time job. Surprisingly, when I eventually got a job, my grades went up. The job was a wake up call as to what my life could be like without an education.

While your child is home for the holidays, take the time to review their spending. Helping your child create good money habits now will go a long way to creating a financially successful adult. They’ll thank you someday.

 

 

How to Financially Survive the Holiday Season

November 08, 2016

I love the fall – the changing colors of the leaves and the beginning of the holiday season. For many, this gives us time to spend with family, but for a lot of us, the holidays create a black hole in our wallets. I am sure that it comes as no surprise that Thanksgiving and Christmas are two of the most expensive holidays of the year, but with some planning, these holidays do not have to wipe out your accounts:

1. Review your spending to determine a realistic budget. Before you get caught up in the non-stop “Black Friday” sales that seems to start right after Halloween season, take some time and realistically assess your budget to come up with a total dollar amount you can spend on family gifts. Consider using your bank’s software or websites like, Mint to help you create a budget.

2. Come up with a game plan for who will and who will not get gifts. I have a HUGE family: 5 brothers and sisters and close to 20 aunts and uncles between both my parents. (Don’t get me started on first cousins, much less second and even third cousins.)

I limit gifts to immediate family members, and I give either a family photo or a photo of the kids in an inexpensive frame for family gifts. Decide who will get gifts and come up with a game plan for other family members. Remember, gifts can be more than something you purchase- yummy desserts or an offer to babysit or do another needed service for a family member are great gifts.

3. Start shopping now for great gifts in inexpensive stores. The best time to hunt for gifts in inexpensive stores is now. Also, start searching consignment shops, particularly for kid’s gifts. A few years ago, we got an expensive all wooden dollhouse filled with wooden furniture and dolls for under $25 at a local consignment shop. Start slowly going to local stores to find some great deals.

The holidays can be financially stressful. However, they do not have to be if you take the time to plan ahead. Start planning now so you can save later.

 

 

 

What To Do Before You Say “I Do” Again

October 11, 2016

As I anticipate all of the upcoming marriages, I think about two of my friends who are getting married for the second time. Second marriages make up 1/3 of weddings. One of my recently engaged friends getting married for the second time told me the first time she went into her marriage blinded by love. This time, the blinders are off and she wants to walk into her second marriage with her eyes wide open. I told her that this means having a tough, but loving financial conversation with her fiancée.

One caveat my husband asked me to include is this: I live in the south where the men eat and sleep college football so please respect the football or whatever your fiancé’s favorite sport season is and have the meeting at a time when he or she will not get distracted by scores. When you find the best time for a meeting consider reviewing the following:

1. Consider pulling up each other’s credit reports using websites like Annual Credit Report.com so you know what you are financially marrying. Ask about his or her plan to repay debt and their thoughts about the debt. Do they consider the debt to be a shared responsibility or just yours to take care of separately once you marry?

2. Review each other’s spending plan or at least your ideas on how you will spend money once you get married. If you are coming into the marriage with children, what financial obligations or promises do they have towards your child that will affect the household income now and in the future? Will you keep everything separate, together or have one joint account and two separate spending accounts? Discuss current and future financial obligations and a plan for how these obligations will be met.

3. If you have assets you are bringing into the marriage, consider a prenuptial agreement that can state how the assets will be divided in case of a divorce. As optimists, we want to believe our second marriages will last forever, but the fact remains that the divorce rate for second marriages is higher. Your EAP or prepaid legal plan may provide legal benefits to help you create your documents.

As you think of remarriage, remember that you are bringing a lot into the second marriage. Assets, kids, a credit history and money management habits can make or break your future marriage if they’re not discussed. Taking a few hours to talk about your finances with your future spouse can go a long way to building a strong foundation for your marriage.

7 Things I Didn’t Do When I Was in Debt

May 11, 2016

It may surprise you to know that since graduating from college, I’ve dug myself out of credit card debt not once, but twice. The reasons I got into debt are best saved for future posts, but both times I got out because I reached a point where I basically put the cards away and settled in for the long haul of paying it off. In both instances, becoming debt free again involved some significant lifestyle sacrifices. Here are 7 things that I do today, some big and some small, that I DIDN’T do when I had debt:

1. I didn’t take cabs. One of the things I love the most about living in Chicago is that there are literally at least four ways that I can get from one place to another. When I was facing a $12,000 credit card balance while trying to build a business and working a minimum-wage retail job in 2011, I rode my bike everywhere. If I couldn’t ride, I took public transportation. Riding in a cab was out of the question unless my personal safety was in question. These days I’m more inclined to hop in a cab to save time or if I’m tired, but I still try to avoid paying to get from place to place if I don’t have to.

2. I didn’t go on vacation. This is a tough one, especially since I had a sense of YOLO exacerbated by the fact that I have some pretty major personal travel goals, but part of the reason I was in debt was due to meeting some of those goals. Sure I went places. Friends and family got married and I didn’t miss that, but I’ll always remember the time a close friend got married in Florida and while I attended the wedding, I was unable to extend the visit into a real vacation because I couldn’t afford the extra nights in a hotel or the time away from work. These days, we plan ahead for travel and don’t go if we can’t pay ahead of time.

3. I didn’t shop at Nordstrom. I honestly didn’t even know what the inside of a higher-end department store looked like until I was debt-free. If I needed to buy clothing, I shopped at discount outlets or Target. It didn’t feel right to me to spend money on luxury brands while I was still paying down debt. Now I’m more of a Nordstrom Rack aficionado but only if I can turn around and pay off the charge card the day after I shop.

4. I didn’t drink $12 per glass wine. When I went out with friends, I usually stuck to cheap beer or limited myself to one glass of wine before attempting to move the party to a BYOB situation. Nothing sucks up extra money like alcohol and while these days I can afford to be picky about what I drink, I definitely couldn’t afford to be a wine snob when I was debt-ridden.

5. I didn’t get my nails done. To me, having manicured fingers and pedicured toes is a luxury. And while no one can make my nails look as nice as a pro, this was not a “need” in my book while I was in debt. I did my own or occasionally traded my mom for a good foot rub. (We still do that!)

6. I didn’t get massages. I am well-aware of the health benefits of a good massage and during my years of credit card debt, a fair share of birthday and Christmas gifts were massages, but it was not something that I scheduled on a regular basis. If I could afford a massage, I could afford to pay more on my debt.

7. I didn’t get my hair colored.  I’ve been coloring my hair since the age of 25, and I really appreciate having a colorist fill in my roots every 6 weeks or so. Back in the day though, I did it myself with color kits purchased at BOGO sales at the drug store.

This is what worked for me and my values and it may not work for you. But if getting out of debt is a top priority, then I encourage you to take a look at where you’re spending your money and see if you can cut out one or two of these things in order to increase your payment. For motivation, plug it into the “New Monthly Amount” of the Debt Blaster calculator to see how much sooner you can be debt-free.

 

11 Easy Ways to Save Money Without Changing Your Lifestyle

May 02, 2016

Does saving more money mean you have to make big sacrifices? If you are trying to find wiggle room in your budget to apply towards important goals like retirement or paying off debt, the first place to look is at the easy hacks. Where can you cut expenditures without drastically altering your lifestyle? Here are some ideas, all of which I have personally tried:

Spend less on hair and nails. I live in NJ, where big hair and gel manicures aren’t just something you see on reality TV shows. That kind of primping at the hair or nail salon is expensive.

Switch from coloring your hair to less frequent highlights and you can save $100 per month.  Doing your nails at home can save another $40-$50. For guys, switching from a salon stylist to a barber can save you another $40.

Give up restaurant beverages. Drink water instead of soda or alcohol and you can save 10-20% on the cost of eating out. If you eat out frequently, including lunch at work, you don’t even have to do this all the time, just most of the time, to see big savings. Your employer doesn’t provide beverages at work? Bring your own from home instead of using the vending machine or corner convenience store.

Join the library. I once had a Very Serious Book Habit. I adore book stores, read voraciously, and could easily spend $150 per month or more on new books and magazines. If I didn’t like the book enough to keep it, I’d trade it in for store credit after I was finished reading it.

I reduced my book buying habit reluctantly. First, I gave up magazines in favor of the library copies and then I made a concerted effort to also read library copies of those books I was pretty sure I didn’t want to own. I now use an e-reader and buy fewer printed books, which has cut my book buying considerably.

Go from two cars to one or even none. Do you really need two cars?  Maybe, but maybe you don’t.

Try living with one car for two weeks and see how you do. Can you take public transportation, carpool or catch a ride to work from your spouse? You may find it’s less painful than you expected. Giving up a car can save you as much as $700-900 per month. I know because I did it myself.

Shop for insurance. You may be able to save by changing your home and auto insurance. Every few years, shop around to compare coverage and prices. The right coverage could save you $100-$200 per month.

Host a swap party. Clothes, accessories, toys, holiday cookies, unopened gifts, books – almost anything could be swapped! What is unwanted to you could be valuable to someone else and vice versa. For more tips on hosting a clothing swap party, see this article.  The same principles can be applied to any swap or exchange party.

Share babysitting. A reliable babysitter can cost $10-15 per hour in my area. Babysitting during a night out with your spouse adds $40–$90 to the total cost of the evening.

What can you do if you don’t have family to help? Form a babysitting club to trade nights out with your friends. You watch their kids one time and then they watch yours the next.  Some friends I know took it a step further, forming a neighborhood group. Once a month, one family hosts a pizza/movie night at their home, while all the other parents get a night on the town.

Fill up at the cheapest gas station. Our neighborhood suffers from zip code inflation in gas prices. A favorite hack of my husband, Steve, is to take a certain route home from work that passes a less expensive station and fill up there. The result? He spends 30 cents less per gallon.

Quit the gym and mow the lawn. Another one of Steve’s hacks is that he thinks of yard work as his personal exercise program. Instead of paying a gym membership, he mows the lawn and chops wood, doing something every day as his workout.

He decided he wanted to do this on purpose, even though we planned for landscaping in our budget. Did I mention we live on top of a hill and have three acres and abundant trees? Needless to say, he is very fit, and our bank account is fatter.

Stock a snack box. How many times a week do you pick up a snack at a coffee shop or store? Those lattes and muffins can easily add up to $3-10 per day. Add in kids, and a quick trip to Starbucks is twice as much. Keep a well-stocked box in your car and your office with easy snacks.

Not ready to give up the coffee shop coffee? I don’t blame you. (I am a fan.) Consider ordering a less expensive version, such as an iced coffee instead of a fancy coffee drink. You can save 50-60% on each cup.

Fill a gift closet. If you have kids, you know that birthday party gifts can cost upwards of $100 per month. Plus there are always hostess gifts, teacher gifts, office gifts, etc. It’s easy to forget those expenses, but they can really eat into a monthly budget.

Set a maximum amount you’ll spend on them for the year and then shop in advance. We recently bought 8 ultra cool birthday presents on Woot.com for only $80! Stock up on inexpensive small house presents and interesting wines when you see them on sale so you’ll always have something to bring when you have dinner with friends. Better yet, shop for holiday gifts right after the holiday season has ended, often for 75-85% off.

Do you have an easy way to save money without changing your lifestyle? Please email me at [email protected]. You can also follow me on Twitter at @cynthiameyer_FF.

 

 

Detox Your Finances

April 26, 2016

Every spring, I get the itch to clean. It drives my family crazy but I cannot stand clutter. If I see an item either not being used or not organized for a future purpose, I am probably throwing it away. The great part about my habit is that my family is scared to leave anything out so I rarely have to pick up behind anyone. My reasoning is that everything is either working towards a goal or working against a goal – in this case, clutter.

Finances can be looked at the same way. Either what you are doing is working towards your goals or working against your goals. This is a great time to detox your finances of anything that may be toxic to you reaching your financial goals. If you are not sure where to start, consider this as a starting point:

Did you get a big tax refund or owe Uncle Sam a check? The goal should be to break even – not give the IRS an interest–free loan or owe money. Use the IRS withholdings calculator for guidance on how much withholding to claim on your W4. This is extra money that could be used for financial goals like savings, getting out of debt or college.

Do you feel like your money goes into a black hole the second you get it? Consider detoxing your budget of expenses that are wrecking havoc with your finances. These are what I consider to be the most toxic:

Eating Out: This is like a vortex that sucks money from you. Consider bringing your lunch to work 2x a week. If you go out with friends, eat before and have a large appetizer or salad or soup

Cable: There are so many options today that make it easy to cut the cable cord. Consider streaming devices like Google Chromecast, Apple TV, Amazon Fire TV or Roku to stream TV and movies through services like Netflix, Hulu, and Sling TV so you won’t go into television deprivation.

Mobile Phone: Contact your cell phone provider about discounts on your cell phone package.  Another consideration is to use tier 2 carriers such as Cricket, Metro PCS, Boost or Straight Talk that generally work with the same cell phone towers as the bigger carriers like AT&T, Sprint, T Mobile and Verizon but at a fraction of the cost.

Are you looking to make a major purchase like a house or car? Get an annual free credit report from all three reporting agencies from websites like annualcreditreport.com. Once you get your credit reports, review them for toxic information using websites like Nolo.com. If you find errors, you can dispute them online. As you review, pay close attention to the following:

  • Review your personal information to make sure all of your information is correct – your name, Social Security number, marital status, etc.
  • Review the your account history to make sure that it is accurate.

Don’t just do spring cleaning. Take the time to detox your finances as well. It can help rejuvenate your New Year’s resolutions and help ensure that all of your finances are working towards your goals.

 

Who Consumers Really Need to Protect Themselves From

March 10, 2016

This week is National Consumer Protection Week so you might have been hearing a lot about how to protect yourself from fraud, scams, identity theft, etc. This is important information but the reality is that the biggest threat to us as consumers is staring at us in the mirror. Here are some ways we sabotage ourselves and what we can do to protect ourselves: Continue reading “Who Consumers Really Need to Protect Themselves From”

Are Your Purchases Like Super Bowl Ads?

February 19, 2016

Less than a week ago, I had friends over to watch the Super Bowl. We had a bit too much food, drank a few adult beverages and watched a game filled with excellent defensive play. It was a pretty good game. Continue reading “Are Your Purchases Like Super Bowl Ads?”

What If You Won the Powerball Lottery?

January 15, 2016

As I type this, the Powerball lottery jackpot stands at $1.1 billion. Yes…that’s BILLION with a B: 1,000,000,000 – nine zeroes. As a CERTIFIED FINANCIAL PLANNER(TM) professional, I can attest to the fact that that’s a whole bunch of money! It’s fun to listen to the radio and hear what people would do with that kind of windfall. As with almost everything, there is both good and bad to what could be viewed by most people as an all good scenario.  Continue reading “What If You Won the Powerball Lottery?”

Finding Some Good In My Worst Financial Decisions: Part 2

November 02, 2015

Last week, I started a series of blog posts discussing some of my personal financial mistakes and the lessons that I’ve learned from them. I don’t know what has gotten into me lately but I am really starting to make a habit out of picking on my own money mistakes. Last month, I wrote in Forbes about some of the things that I have been spending money on in The Last 10 Things That I Bought and was able to identify just how easy it is to get off track with our spending plans. Continue reading “Finding Some Good In My Worst Financial Decisions: Part 2”

How This Married 37-Year Old CPA and Financial Planner in Chicago Spends Her Money

October 14, 2015

When my colleagues, Scott and Tania, joined this Last 10 Buys Challenge on Forbes, I took a look at my spending and initially thought, “No way…this looks BAD!” But then I thought about how I actually like it when my instructor at the gym confesses to struggling with her diet so I figured I should bare it all with thoughts on how I could have done better. Here are the last 10 things I spent money on this week:

Continue reading “How This Married 37-Year Old CPA and Financial Planner in Chicago Spends Her Money”

The Last 10 Things This 42 Year Old Mom Spent Money On

October 13, 2015

In addition to writing for the Financial Finesse blog, I also write for Forbes. One of the Forbes staff members, Samantha Sharf, laid her wallet bare and shared her last ten purchases. She then challenged other writers and readers to do the same. One of our financial planners, Scott Spann, took the challenge and shared his last ten purchases. Realizing first with horror that I am older than he is and second the need for people to see that we are not perfect, I took up the challenge to share my last ten purchases over the weekend: Continue reading “The Last 10 Things This 42 Year Old Mom Spent Money On”

Money For Grown Ups

July 10, 2015

In a conversation with another financial planner here at Financial Finesse, the subject of having college–age children elicited laughter as well as groans. Cynthia Meyer and I shared some stories about our past “adventures” in finance and some mistakes we made along the way. She was inspired enough to write this blog post: Continue reading “Money For Grown Ups”