Rule Your Wallet Blog

Amazingly, I stayed on budget for these two sales days. It wasn’t easy with all the marketing and flashing lights I was inundated with.

The good news is I finished my Christmas shopping, so that is one less thing to worry about. The great news is I didn’t buy anything for myself and wasn’t sucked into the feeding frenzy.

How did I stay on budget?

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At the end of the day, if your finances are in bad shape then you have one of two problems. You are spending too much money or you are not earning enough money. It is that simple.

I know what you are going to say. What if I have a bunch of unexpected expenses or one large unexpected expense? It could be argued that in this case you are not earning enough money. If you were earning enough money, then you would have the necessary insurance and funds available to cover these types of expenses, in theory. Continue Reading

My budget was dinged with a subscription fee that I had forgotten about and this one has put me over the edge. Granted it was only a $30 charge, but it was the straw that broke the camel’s back.

I have a decent sized list of yearly charges that are a constant source of  annoyance to me because I can never remember exactly when I will be billed. I have a general though of “It seems like it is about time to pay for my basketball season tickets.” Of course, this thought last for 1-3 months before the bill actually arrives. Here is a list of my once a year bills. (If I can remember them all.) Continue Reading

Getting all your goals written down

When you are setting your goals to get out of debt, the list of debts that need to be paid off can become long. The list gets even longer when you add in your savings and retirement goals. It is with long list that we can run into trouble (more on that later). When you first start you get out debt plan, you need to list all the debts you want to pay off and all the savings goals you wish to reach. Here is my list from when I first started.

• Credit Card #1
• Credit Card #2
• Credit Card #3
• Car Loan
• Emergency Fund to 3 months
• Student Loan
• Early Retirement (4 separate goals within this one)
•             401k
•             Roth IRA
•             Equity Account
•             Real Estate

Not the longest list of things in the world, but still 7 things to keep track of or 10 if you count all the retirement goals.

Prioritize your Goals Continue Reading

Budget Flexibility

Having the proper amount of budget flexibility will make your life less stressful. I have a bad habit of not doing this and it just makes things annoying for me. If you read my post on how many checking accounts should a married couple have, then you know that my wife and I have 3 checking accounts; Mine, hers, and ours. The budget that always seems to bite me is the “ours” account.

For some reason (I promise I will tell you the reason), I have a mental block about adding in flexibility to this budget. There is plenty of flexibility in our personal checking accounts and even a built-in buffer for each account. Joint account, nope, none of that. I could make excuses here and say there have just been more unexpected expenses happening the last few months, which is true, but is not the root cause of the problem.

Cause of Inflexibility

Every year it is the same few months that give me a headache: June, July, and August. It is normally just those three months that are an issue. That was until this year. This year our joint account budget started running into trouble around April. What changed this year? A heat wave that caused unusually high temperatures starting in March.

The electric bill fluctuates enough to throw everything off and cause a loss of flexibility in the budget. Why do I never fix this problem? Because it always goes away. The power bill at my house is sometimes triple what it was in the winter, but it always goes back down. I did base the monthly budget on the highest electric bill of the year, so that wasn’t the problem. Another reason: I am too lazy to adjust the money transfers for three months out of the year.

Solution to making this budget flexible

The way I am going to fix this problem is just add $150 to our joint budget. All the money left over at the end of the month (during the Fall, Winter, and Spring) will be transferred to a joint savings account and probably put towards a vacation. The other option would be to allow a “buffer” to build up in the account during winter to cover the increases in the summer.

It is win-win. I don’t have to adjust our contributions to the joint account during the summer months and we will already have some money saved up for a vacation.

If you need a budget spreadsheet. I recommend visiting Budgets are Sexy’s free budget templates.

With the state of the economy over the past few years, it has become harder to get by financially. Many people are doing just what they can just to pay the bills, but even more people are not prepared to handle an event that can cause financial disaster. These distastes come in many forms; a job loss, sudden illness, or a major car repair can wreak havoc on a your personal finances if you are not prepared. The good news it is not hard to prepare for the unexpected.  All it takes is planning.

Here are a few easy steps to take prepare yourself for a financial emergency.

Start an emergency fund – The amount to save is a hotly debated topic that ranges from 3 months of financial expenses to 12 months of financial expense. I know it is not easy and it can’t be done overnight, but you must start somewhere. Try to put whatever you can into a savings account every month. You can also try the dollar savings plan if you use cash.

Use direct deposit – With direct deposit, you will know that your paycheck will be in your bank account and you will not need to worry about getting to you bank before it closes.  This will help you if you cannot go out due to illness or in the event of natural disaster that causes your bank to close temporarily.

Use online bill paying – You do not have to use this service every month, but it can come in handy if you have all your accounts set up. Let’s say you forget to pay you cell phone bill before you go on vacation and it is due.  No problem,  sign on the internet and pay it.

Get an ATM/Debit card – I prefer an ATM card to a “fake visa” that you bank issues as  a debit card. You may not regularly use cash or have a need for a debit card, but there are some circumstances where it may be necessary.  If you don’t use one regularly, get one anyway and keep it in a safe place.

Set up a home equity line of credit – This option is not available to most people given the current economy, but if you can get one, you can use it until you have your emergency fund built up. Unlike a home equity loan, which provides you with a lump sum of cash right away, a home equity line of credit provides you with cash that you can use a little at a time and only when you need it.  If you don’t actually take any money out, you don’t have monthly payments.  However, if an emergency strikes, you’ll have cash available.  This can be particularly helpful if you find yourself out of work for a short period of time.  Your bank won’t lend you money when you are out of work, so plan ahead of time and the money will be ready when you are.

Plan for financial disaster now and experience the comfort of knowing you are prepared if an emergency strikes. A little bit of planning can go a long way to helping your through a financial emergency.