Missing posts and hard moments

I originally planed to post three times a week and I haven’t since last Monday due to a death in my family. I do hope to post more articles soon. During this time I have learned a few lessons and have learned that you never want to be limited by money. I had to take almost a week off of work yet my expenses spiked since I ate out more often in addition to filling up sooner then I would have liked to. On top of it I have finals next week and still have to finish projects from earlier in the month. I do hope you the reader understand. I want to publish good articles and not just something I thrown together in five minutes, which at this time I just decided to take a break from it all and I plan on starting back within a week.

Thanks,
Zack

Make sure to stay organized

I hope everyone has had a good weekend, I spent a good part of mine searching for documents. I eventually found them right on my desk after shuffling them in with other papers.

One thing that has helped me a bit on my path is to stay organized. I remember when I was younger and I had a savings account how I would loose the statements. I would be in a panic much like I was this weekend. Frantically searching for the paper until after midnight.

What being organized to me means:

  • Have a “to file” box. Right when I walk in my door I have a box I put all my mail, receipts, paperwork, etc. It all ends up there. Once every few days I will go through this pile and sort it and one by one record and file away as needed. Although I do on occasion forget to place a receipt there and then I forget what I spent it on.
  • Have a spot for everything. I have an old UPS box that I keep all my old statement in, as soon as I reconcile my checkbook I place it in this box ASAP. To many times have I forgotten only to have the statement reprinted since I lost it. I also have a file cabinet for my business and I keep everything of important, from letters to permits and everything else you can imagine.
  • Don’t just leave “stuff” out. This is exactly what I did. When I did the article the other day for how much I’ve made thus far I left it on my desk and worked on a paper and it was mixed in with those paper. So when I went to search for it when I was doing book work I couldn’t find it.
  • Use a calendar or reminder system. I can not speak enough good words for Google Calendar. I have it setup to text me a few days in advanced and the morning of all appointments. Before I would use a paper, but it would get lost or torn.
  • Don’t carry your documents around loosely. I have someone I do work for that does this. Instead of having a nice spot to place it, they carry it around with them. When they go home, go out of state, etc. it’s there with them. As you can imagine they lost a few items. Before I got a clip board and a bag to carry around I would loose paper and lucky it wasn’t anything major, but the other person would loose receipts and the likes.

These are just a few of the numerous ways to help keep organized. I invite you to share your method? Is it the simple Shoe Box or do you have an elaborate file system?

Ideas for Staying out of Debt 6 – Track your money

In Ideas for Staying out of Debt I plan to cover my ideas/plans on how to stay out of debt.

If you often spend money and by the end of the month your asking yourself “what did I spend my money on?” then this is for you. You got to make sure that your tracking your Expenses vs. Income. When I first tried this I would often just give up for months at a time. It was hard to make sure I entered every transaction into GnuCash and one year I just completely stopped, since I was becoming lazy.

Here’s what you need to do in order to keep track of your money

  • record purchases as soon as you buy an item
  • keep all receipts until you enter them
  • if no receipt, then make note, for me I use my cell phone
  • sit down once a week to do all your bills
  • every so often reconcile with your bank’s online banking
  • make sure you plan for big purchases

The first three are all related, make sure that when you purchase even a meal that you sit down and record the purchases. I was/am horrible about this and I would often forget to and ended up forgetting what I even bough. Now I try my best to record it within a day or two.

You need to set a day aside each week to pay all your bills. This way you can open the checkbook once and be done. Plus you can start to get a better view of your finances. I know when I do that I end up thinking is it really worth the cost I paying.

This is one thing I do every couple of days. I just give my bank’s online banking a quick visit and ensure that nothing unusual is going on. I will also make sure that the purchases match up and wasn’t over charged.

Finally, make sure to plan for big purchases. Case in point I knew I’ld be building a computer and for three months I prepared for it. Now in my case I started to buy individual parts for it bits at a time, but I could have just the same saved back the money. Just a little bit here and their can go far. Often times a big purchase I want I spend a long time planning before I actually make the final decision to buy.

Is it okay to play the lottery?

Here is one issue I see regularly on various Personal Finance sites. Is it considered okay to play the lottery? My stance on the issue is it is alright, but in moderation. Below I listed the various Pros and Cons and then I give my argument below.

Pros

  • So long as it’s money you don’t need and you only play every so often no harm should be done.
  • There can be an Entertainment value thinking of what if I win.
  • Several states use Lottery winnings to fund education.
  • It can be a social event like in an office pool and can lighten the mood.

Cons

  • You can have a gambling problem.
  • If you overspend you could end up in debt.
  • Is viewed as a “tax” on the low income.
  • Several views it as a way out of poverty and/or a way to fund retirement.

I’m sure the list could go on, but those are the main point from several sites that I have read. I do believe it’s okay so long as it’s what several other Personal Finance sites and myself call “fun” money. I will have cash on occasion to buy small items such as drinks and snacks. If I was to buy a lottery ticket it would just mean one less coke to buy.

Also, a part of my college cost are paid via a scholarship fund that is funded in part from the state’s lottery. Plus I have over heard several people doing “what ifs” such as “If I won the lottery I would by a new car” and would get all excited and would have enjoyment from the thrills of the possibility, however slim it may be.

Yet at the same time we’ve all seen on the news cases of winners loosing it all or of several people spending insane amounts on the lottery in hopes of winning. In cases like this or when it’s viewed as a means to get out of poverty, then one should not play. For as they say in the TV ads, “Remember, it’s just a game.”

Ideas for Staying out of Debt 5 – Budgeting the Babylonian way

In Ideas for Staying out of Debt I plan to cover my ideas/plans on how to stay out of debt.

For those of you that have read The Richest Men in Babylon you know which method I’m taking about. This method is mainly for those of you who are in debt, but I’ll show you my modification once out of debt. For those of you that have not read that book the method is devised as followed:
  • 10% you save right away from each paycheck. The point in this is to have extra money that is yours outright.
  • 20% you divide between all your creditors. You would take out a piece of paper and write all your creditors in it and divide the 20% to all of them, pro rated. Just as an example, if you owe $250 to Creditor A and $500 to Creditor B you may make $375 which means 20% is $75. You would pay Creditor A $25 and pay Creditor B $50.
  • 70% is to be used on your living expenses. All your bills are to come out of here. You cannot dip into the 10% or 20%. For some people this will be hard, especially if your making minimum wage. Yet it also means you have room to spare once you’ve trimmed your bills down to this level.

The part that I find interesting that other Personal Finance Blogs talks about is saving at least 10% for retirement. While in this book they said to save 10% to invest safely. To cover this problem, I believe once your debts are paid off you should put the 20% towards retirement, that way you have money in the bank and/or investments, no debt, and your bills are getting paid.

Ideas for Staying out of Debt 4 – Extra Income

In Ideas for Staying out of Debt I plan to cover my ideas/plans on how to stay out of debt.

This is one area I can speak about from experience. When I first started my business I made less then $1,000 the first year. I had no ads, no car, and I wasn’t sure if I wanted to do it. My primary income at the time was helping out at the family business, a steel yard and a farm. Over time I got my business built up till last year my business out earned the family business and I haven’t looked back.

Now, if you are in debt right now the extra income from a side business or just working longer could be used to pay it down quicker. Or you could use it to build up your savings. This way you will have more income to work with. Think about it, your in risk of going into debt with your current job. By adding an extra $100-$300 a month of income could mean the difference between scraping by or ringing up debt.

For short term debt such as a personal or payday loan then selling items you no longer use on eBay could help. Just make sure you properly describe the object and take real pictures, the buyer would want to see what it really looks like. But for the long term debt you would be better off ether working more hours (if possible) or even starting a side business. I started my business on the side and eventually now it’s my only source of income, after about 3-4 years.

No matter what option you pick, make sure you actually use the extra money to pay down debt. Once you are debt free, then you can splurge a bit, or save it up. Just make sure if you don’t already have an Emergency Fund, to set that up with the extra income first. After all, you want to make sure a bad tire doesn’t wipe out the extra bit you just paid down.

2012 Money Goals, 1st Quarter Expenses

Expenses

As you can tell, March was expensive (Created in GnuCash)

  •  My Car – You should be able to tell that March was a bad month car wise. At the beginning of March a bad storm came to where I live at and it threw a plastic lid through my back windshield, and side window, and busted out another one. In addition I pay my insurance in 3-month increments and March was the month. In February you see a good month, less then half spent on my car, which is what I try to do.
  • Drinks/Snacks – This also include food along with when I go out to eat. Which I try to spend less then $60 on, but sometimes it doesn’t work that way since I’ll overspend.
  • Books – I am a college student and for the Spring 2012 term I bought all but one off of Amazon, but that was in December and a few didn’t ship until January.
  • Phones/Cellphones – Right now I pay around $50-$60 a month for my Prepaid Phone. In the past there was times I paid $70 and other times I would pay $20. But now it’s pretty predictable.
  • Other(s) – This is just a catch all for misc. items and to make the graph easier to read.

Budgeting

I used to be on a budget and part of it was savings. As you can tell from the last post, I haven’t been keeping up with that goal. Which the goals I had set are going to be the basis of my budget. I want to try to keep Drink/Snacks down to $60 along with trying to pay off my debt and increase my saving. But that will be a topic for another day.

2012 Money Goals, 1st Quarter Savings, Debt, & Income

Savings

  • Emergency Fund – As I said earlier I have yet to start back on saving in my Emergency Fund. It currently sits at five dollars.
  • Taxes – I just recently paid Estimated taxes to the tune of 450, with about another hundred still in the account. Only time will tell if this was enough.
  • Slush Fund – Need to set this up. By next quarter I hope to have an account established.
  • Place to live – here’s the really dumb part on my move. I have 3,750 but it’s mostly from Student Aid that I have managed not to spend.

Debt

  • Student Loans – The original loan was for $5,500. The current principal is  $5,299.77. Which mean $200 is paid off of the $750 goal. The only bad part is I have about $60 in interest that I have not paid yet.
  • Credit Card – I only have a $200 credit limit and my last bill was for $0 and currently I only have a $3 balance from Saturday. So on using it less I am making progress.

Income

  • My business which is Computer Repair and Programming seams to be on track. After doing the quarterly book work it’s at $4,505.67. Which my goal is $20,000. So it’s almost a quarter of what I expected. Yet the last two/three weeks have been slow and may explain why it’s not $5,000. But I can live with that.
  • Passive Income – Have yet to establish any, I have been reading blogs, books, and listening to shows on that topic. Lets see if I can get this going soon.

Noticeable Quarter Events

This quarter has been an interesting one. First time I’ve installed a security camera system, which was a good learning experience. Always wear dust masks when working with ceilings and walls. But onto some bad events. The beginning of March there was a bad storm which busted out three windows on my Ford Explorer. The repair bill was around $700 but my parents chipped in, which helped a lot. Had my parents not chipped in and with virtually no Emergency Fund this could have been much worst.

Now you may be asking me, where’s the expenses? I haven’t had much time to analyse my expenses yet but I can say more was spent on my Explorer then any other category. I will make a new post when I’ve done that.

And as always, feel free to comment below. I want to hear your comments and suggestions. If you like this post make sure to subscribe to the feed at the bottom of the site. Thanks and I hope to hear from you soon.

- Zack

Also, on a side note, today I’m 19. With the extra money from gifts I hope to not blow them. I would really like to pay off some debt and/or save but I need to at least make sure I don’t blow it on food and stuff I never use. Finally I am expecting a slight increase in one of my Subcontracting Job and I plan on using half of the excess to pay debt and the other half to fund savings. Which should amount to about $50 for each category per month.

Goals derailment, what if

Even though I set money goals earlier this week, if I wasn’t to meet them I wouldn’t get to upset. I even expect a few to not be achieved this year. All it would mean is to try harder. Case in point, on debt I have been trying to not use my credit card, well I used it today at Subway.

The point of goals isn’t to set in stone events that must happen. Rather it is what I would like to happen. One goal I made was to have $20,000 in gross income from my business and after doing my quarterly Sales Tax return I can say I’m on progress. I was at the $4,500 mark which isn’t half bad in my opinion. It means I must try to beat that the next three quarters, but more on that later on in April.

Some goals I set for myself as a person I end up rolling over into a new year. Take the goal  of loosing weight, which is also related to spending less on junk food. I have had this goal on my plate for a few years now. Yet I will stick to the goal for a few days then I go talk myself out of it. I will say I don’t have the time and/or energy to and will slowly stop.

This is one area I need to change. I should start to care about my goals and not push them off. I need to hold myself more accountable and reward myself for meeting goals. The Subway today was a reward for progress toward the weight loss goal. I went on several small walks, ate fewer snacks, and drank less Mountain Dew. This is a personal weakness, I used to carry cash and would spend it all on Mountain Dew, leading me to stop using cash. As part of starting Staying out of Debt I will start using cash again, slowly.

Time will only tell if changing how I view goals will help. I am only a human with weakness, but if I am successful I will come out stronger and less in debt. I would like to hear from you what you do to stay on track. Just leave a comment below.

2012 Money Goals

With the first quarter of 2012 coming to a close, I will be sharing with you my financial progress report. But first, I should explain what my goals are. Listed below are my simple goals for 2012 organized by category.

Savings

  • Have two months living expenses in a savings account. I.e. an Emergency Fund. For me this would be about $1000. In the past I’ve had a much smaller E. Fund, but my income was to low one month and I have yet to build it back up.
  • Make sure I am setting back money for Taxes, I am learning this the hard way on my 2011 Taxes. My goal on this for 2012 is to owe less then $100.
  • Have a slush fund of sorts – I have a few expenses I always forget to plan for (Oil changes, web hosting, etc) My goal for 2012 is to get the big offenders out of a slush fund.
  • Finally, I want to have money saved up for a place to live. From my last post you can tell I would much rather start small and pay for the house outright. But at the moment it looks like I may have to rent until I get enough saved.

Debt

  • The only debt I have currently is a student loan. I hope to have at least $750 of the principal paid off by the end of 2012. I really wish it would be paid off by December, so I may throw some extra money into it.
  • I do have a credit card, but it’s a secured credit card with a $200 limit. It gets paid off every month if I use it and in 2012 I hope to use this card less. When I first got the card I placed $120 on it and since the start of 2012 it hasn’t been over $60.

Income

  • I own a business and I really hope to have it take off this year. In 2012 my business grossed about 10k or 11k. Almost half of that is from subcontracted services. In 2012 I want to see my business pass the $20,000 in gross sales mark.
  • I also want to diversify my income and for 2012 I want to start having passive income. I am not sure what I’ll do yet, but I would like to set a goal of having $250/mo by the end of 2012.

Expenses

  • I plan to sit down at the end of this quarter and examine all the money that I paid out and find ways to reduce it and to make a budget. I used to follow a budget but then I got a car and it just went out the window.
  • This is in relation to savings also. But the money I don’t spend on an Item I want to start saving away. I used to buy snacks and pop often and I would like to add to my savings every time I get the temptation, instead of buying.

Well that’s my 2012 Money Goals as of right now. Make sure you check back in Mid April for my first quarter financial report to see how much or little progress I have made.