5 Important Things to do Before Buying a House

For most homeowners, buying a house is the purchase of a lifetime. Before you sign on for your dream home—and potentially all the debt that will come with it—you need to take an honest look at your finances. If you are thinking of buying a house, these tips will help you align your personal budget with your house goals.

1. Know Your Household Budget

Setting up your household budget should start with having a firm grasp on how much money you have coming in (after taxes) every month. Next, you’ll need to determine your monthly expenses, from bills, utilities, and insurance to groceries and entertainment. The amount of money remaining after you subtract your monthly expenses is your expendable income. Are there areas you can improve on? Is the expendable income you have enough to cover the added expenses of a mortgage, insurance, and home ownership? Make adjustments where necessary.

2. Pay Down Debt

Of course, it is possible to buy a house even if you currently have existing debt, but you are putting yourself in a much better position to be approved for a mortgage if you can pay off most or all of your debt first. Paying off debt will also improve your credit score, which is also an important factor in getting the best terms for your mortgage.

3. Save for a Down Payment

Lenders have been increasingly cautious about who they lend money to and how much money they lend. Because of this, lenders often require a 20% deposit on a home. Depending on the price of a home, this deposit can get pricey. Focus your personal budget on saving towards this deposit. It will improve your chances of getting approved for a loan and give you a head start in paying off your home.

4. Know How Much House You Can Afford

Feel out what kind of loan you can get pre-approved for. Typically, your actual “new home” budget will be less than the amount you are pre-approved for, but this is a good jumping off point. Next, seek out homes that could realistically fit into your budget. Most lenders suggest a house that is about 2.5 time your annual salary.

5. Research and Inspect

If you find a home you can afford that you want to buy, don’t jump to sign the first contract of sale laid before you. Take the time to hire a home inspector. A home inspector is different from an appraiser and you will have to hire them each separately. However, a home inspector could save you money in the long run by uncovering any big issues with a home before you own it. Take some time to research the real estate market you are buying into. Is this home priced fairly compared to similar homes in the area? If not, you could use this data to argue for a lower price.

Finding a home you will love with your budget is possible. By modifying your spending, you can save money, get the best mortgage possible, and land your dream home.

Dealing with Financial Stress Due to COVID-19

Covid-19


Are you aware of the impact of long-term stress on the human mind and body? Now, more than ever, it’s crucial to be aware of the strain money woes can put on your body AND mind.


The arrival of COVID-19 has brought with it a barrage of physical illness, hospitalization, and even death. An effect of the virus mentioned much less often, that can also have a disastrous effect on lives, is the psychological stress so many are experiencing.

Not knowing when you’ll receive your next paycheck while the pile of overdue bills on your kitchen table grows, can have a negative impact on your health. The body’s “fight or flight” response is meant to be a helpful boost of adrenaline to get us through temporary challenging situations. The problem arises when the situation shifts from temporary to long-term.

Any stressor that puts the body into “fight or flight” mode for longer than an hour or so is going to wreak havoc on many bodily functions. The adrenaline rush that comes with being stressed causes an increased heart rate and blood pressure, dilated pupils, heightened brain function, and a higher intake of oxygen.

If stressors are present over a long period of time (like during a global pandemic), other health issues will begin to arise. In combination with a poor diet and lack of exercise, chronic stress is one of the leading causes of heart disease. Other complications from long term stress (money worries in particular) include:

  • Migraines
  • Sexual dysfunction
  • Asthma
  • Gastrointestinal issues
  • Chronic high blood pressure
  • Diabetes
  • Intractable all-over body pain
  • Stomach ulcers 
  • …and more

It’s generally not a good idea to make any important decisions when you’re under a lot of stress because your state of mind isn’t primed to make good judgement calls. Unfortunately, it’s pretty common to make bad choices when dealing with things like the fear of not being able to pay your monthly living expenses. Money stressors can incite depression or PTSD in some people, which can then lead to a downward spiraling cycle of Overspending, Guilt, and Fear; Lather, Rinse, Repeat.

In addition to depression and PTSD, stress can trigger other psychological problems like:

  • Anxiety
  • Insomnia
  • Sleep apnea
  • Narcolepsy
  • Restless leg syndrome
  • Hypersomnia
  • Anger issues
  • Hopelessness

Studies have shown a direct correlation between money stress and depression long before the current global pandemic entered our lives. It’s clear that people dealing with financial troubles are significantly more likely to be depressed than those who don’t struggle to pay their bills.

Under normal circumstances, it may be possible to overcome money worries before they lead to detrimental psychological or physical ailments. With the additional stress of the unknown that accompanies COVID-19, however, the average American is under an excruciating amount of mental strain.

Regardless of your socio-economic status, chances are high that you will feel the effects of this global pandemic. Whether due to furlough, job loss, money lost through investment(s), business closure, fewer customers, or being unable to work due to school closures, virtually everyone is feeling vulnerable. There is no shame or embarrassment to be had if you’re dealing with financial strife right now. No one could have predicted COVID-19 and the widespread destruction it has left in its wake.

If you’re dealing with financial stressors and need help figuring out the right money management  strategy, let Veitengruber Law help you. There are a number of options available to help those who have been affected by the fallout from the coronavirus. Our team is working full-time (at home but together every day via the power of technology). You can reach us at the phone numbers on our website, or you can send me an email at george@veitengruberlaw.com. You can also message us on any of our social media pages. We are active on Facebook, Instagram, Twitter, and LinkedIn.

Budgeting Basics During a Crisis

budgeting basics

Creating a budget is certainly not a walk in the park even in the best of times. Budgeting is an ongoing process and for most people, your budget has the possibility of changing from month to month. When the world is in the middle of a pandemic and you’re potentially working with a reduced amount of income, staying within a budget is of the utmost importance. Our advice for budgeting basics holds true now, but budgeting during a crisis presents challenges that we aren’t presented with when things are flowing smoothly. that you will want to pay special attention to as you map out the next several months of your finances.

If you’ve never set up a budget before, you picked an interesting time to start, but it can still be done, and major kudos to you for recognizing that you NEED to work within a budget. As with most things in life, the more you practice budgeting, the better you’ll get. Take a good hard look at all of the points listed below, note how they’ve changed since COVID-19 came on the scene, and you’ll be able to piece together a new (and hopefully very temporary) “Pandemic Budget.”

Income

Let’s begin at the most obvious place: your income. As we all know, your income is going to determine your budget, or in other words, how much money you have to spend. Your income can come from a variety of sources: your main day-to-day job, side jobs, child support, or even rental properties. It includes any source that brings money into your household each month. To start creating your budget, record the total amount of money that you’re making. For many Americans, this figure will differ from your “normal” income amount as you face reduced work hours, fewer clients, furlough, or total job loss. If the latter is the case, be sure to file for unemployment ASAP.

It’s important to take taxes into account, so make sure you’re recording your monetary income post-taxes. Some people refer to this as “take home pay.” If you’re married, you’ll potentially be combining your incomes, so record them on the same budget.

If you are self-employed, budgeting is even more important. Your COVID-19 month-to-month income may be unpredictable depending on your business. If you’re still bringing home money but your business will likely suffer in the upcoming months, use your income figures from the three months that you made the least amount of money over the past 2-3 tax years. Average those three amounts and use that figure for your projected pandemic monthly income.

Expenses

The next part (that no one likes to think about) is what you spend your money on. Though expenses have their own categories, you always have regular “offenders” every month like your utilities, mortgage, or car payment. Sometimes utilities can sway a bit from month to month, but in general, they stay consistent.

You can’t forget about the other necessities like groceries, gas, clothing, household necessities, and other miscellaneous items. For your budget, it’s important to take into consideration everything that is going to require money. You may very well need to (and/or be forced to) delete some expenses at this time both in order to cut back on spending and also because you simply won’t have access to some things right now.

Set Priorities

Your priorities right now are likely going to be slightly different than usual. Make sure the basics are covered before setting money aside for any extras.

  • Groceries: Although how you acquire your groceries may look different right now, you have to feed you and your family, so first and foremost, set aside enough money for food. This should come before you worry about other bills. You may have to adjust your food allowance slightly to allow for delivery fees at this time.
  • Utilities (Electric, Water): You have to keep the water running and the lights on, so these should take next priority. You might be asking, “isn’t my mortgage more important?” Well, living in a house without lights or water is no fun. The utility company won’t wait to turn your water and electric off if you don’t pay them. Many mortgage companies are giving a tad more leeway than usual during the challenging times we are living in!
  • Mortgage or Rent: Although you may get slightly less push back if you’re a little late, don’t put your housing payment off entirely unless it’s a dire emergency. Stay on top of it and don’t let it slip to the bottom of the pile.
  • Gas/Fuel: Normally, you have to put gas in the car to get to work. If you’re now working from home for the next several months, the good news is that the money you would have spend on gas and parking can be spread out to use in other expense categories where needed.
  • Clothing: This is another budget category that you can easily cut out right now. Even if you’re required to video conference, you only need to look presentable from the chest up, and no one is going to be able to discern whether you’ve worn the same shirt to every meeting – just hang it up to keep the wrinkles out in between calls!

Under normal circumstances, we’d say that as long as you’re meeting your necessary expenses then you can spend some of your income as you wish. A “fun money” fund, if you will. However, as we’re in the middle of a pandemic that shows no clear end date, we have to advise you to save anything you have left over – just in case you need to make ends meet for longer than originally planned.

Final Touches

Once you’ve figured out your grand total of expenses, you want to make sure that it doesn’t add up to more than your total income. If you end with a negative number, you’ll need to go back through and see what unnecessary spending can be cut out. If Income – Expenses = $0, you’ve successfully created your first budget! Some people prefer to have their final number greater than $0, just to provide a little wiggle room. This is naturally preferable so that you can begin to build up a small savings.

As you go through the next few weeks, chances are, you will have to make some edits to your budget. This is more than okay. Remember, creating a functional budget is a tricky process even in the best of times and it takes time to figure out. Don’t be discouraged at the thought of having to create a budget; instead be proud of yourself for taking a step towards managing your money skillfully, especially in such a challenging time.

Why You Need a PreNuptial Agreement (PreNup)

prenuptial agreement

The US has seen a significant drop-off in the marriage rate in recent years. Part of the reason for this is that there is less financial advantage to getting married for women. 2019 was the first year on record where women made up the majority of the U.S. work force. With male and female partners entering into a relationship on more equal economic footing, there is less impetus to take the marital plunge. When a couple does decide to tie the knot, it is a growing trend to sign a prenuptial agreement before walking down the aisle.

A prenuptial agreement for those intending to get married, or a cohabitation agreement for those who want to live with their significant other, can give you the security you need to intertwine yourself financially with another person. Sure, you love them now, but people and circumstances change. If the marriage doesn’t work, particularly if you are the one with a higher income, you can save a lot of time, money, and heartache if there is a prenup in place. Signing a prenup is not a negative mark against your relationship or a dismissal of your genuine feelings for your significant other. It is a smart financial move and could even better allow you to exit the relationship amicably in the future.

A prenuptial agreement isn’t just for those who are well-off financially. People from all kinds of financial backgrounds are using prenuptial agreements to protect themselves and their assets before entering into a marriage. You might want a prenup if you intend on passing separate property to children from a previous relationship. A prenuptial agreement or a cohabitation agreement can be a great way to clarify financial rights within the relationship so you both know what kind of financial responsibilities to expect. If you want to make sure your spouse is protected from becoming liable for your debts, or vice versa, a prenuptial agreement can cover that. Essentially, a prenup will help you avoid arguments and bitter feelings should the relationship not work out. It can also prevent some of the bigger causes of divorce—like financial disagreements—by ensuring everyone is on the same page.

In New Jersey, prenuptial agreements must contain several components and cover a few different outcomes to be recognized by NJ courts. NJ prenups and cohabitation agreements are governed by the Uniform Premarital and Pre-Civil Union Agreement Act, which requires that specific issues be covered in order for the agreement to be enforceable. An experienced divorce attorney will be able to ensure you are covering all of your bases, but a few big things to come to an agreement on are:

– Financial rights and obligations concerning property and debts, establishing who pays for what

– What assets will be considered co-owned and what assets will remain individual property

– Whether or not spousal support will be included in a divorce settlement

What happens to debts, inheritance, or assets gained after the signing of the prenup

– How property will be titled and who can stay at what property in the event of divorce

If you are considering a prenuptial agreement, talk to your significant other. Work together to determine whether or not a prenuptial agreement is right for you and your relationship. Talking to an experienced attorney can help you work through all the little details. Veitengruber Law offers personalized legal strategies to help protect you and your loved ones’ financial futures.

Dealing With Financial Anxiety Around the Holidays

Between Black Friday, Small Business Saturday, and Cyber Monday, the holiday season can bring with it an abundance of opportunities for shopping and gift buying. This time of the year can be exciting and joyful, but it can also be stressful. If you are facing financial difficulty, the added pressure of holiday shopping can create anxiety and increase the strain on already burdened financial resources. While you may not be able to eliminate all of your holiday stress, you can make some smart money choices to alleviate financial stress. Here are six ways to get through the holidays without breaking the bank.

 

  1. Create a Budget

Review your income and your expenses and see how much wiggle room you have to fit in holiday spending. Figure out what you are willing to spend on gifts, food, and decorations and then decide if this matches your budget. It can be helpful to allot a specific amount of money for each item on your list. Determine how much you can afford to spend on each person and on your other holiday items. This can help you avoid overspending and keep you on track to meet your daily financial obligations.

 

  1. Don’t Buy It If You Can’t Afford It

We’ve all been there: you have the perfect gift in mind for your loved one, but the price tag gives you pause. Every year, parents dip into emergency savings or retirement plans, maxing credit cards and cutting corners in order to give their children a fantastic holiday. A good rule of thumb is that if you can’t afford to purchase a gift without borrowing money from another account or taking out a loan, it’s best not to make the purchase. After all, going into debt is going to be more detrimental to your loved ones than skipping a few presents under the tree.

 

  1. Plan Your Shopping

Whether you are at the grocery store or the mall, it is a good to have a clear idea of what you intend to buy before you get there. Create a list of what you want to buy and who you are buying it for. This will prevent you from making unnecessary purchases or spending beyond your allotted budget. Impulse purchases can add up over time to completely ruin the budget you have established for yourself. If you know what you need and how much you are willing to spend on it, you can’t fall prey to holiday consumer tricks.

 

  1. Be Creative With Your Gifts

Your gifts can still be thoughtful without an exorbitant price tag. If your crafty, put your creative skills to good use and make some handmade presents customized for your loved ones. DIY gifts can be very meaningful for your loved ones without breaking your budget. If arts and crafts aren’t your thing, you can give the gift of your time. Cooking a meal, cleaning a house, a night of babysitting, a movie night on the couch—these thoughtful gifts can mean everything to your loved ones and likely won’t cost you a thing.

 

  1. Talk To Your Loved Ones

Discuss what the meaning of the season is for your loved ones. You may not have the financial resources of others close to you. While it might be a bit uncomfortable, take the time to set reasonable and realistic boundaries with family where your finances are concerned. Gift spending limits and spreading holiday cooking responsibilities evenly amongst family members can save you a lot of headache and disappointment later on. Your family should know what to expect from you this holiday season and you should not feel ashamed to set reasonable financial boundaries with your loved ones.

 

  1. Start Saving For Next Year Now

Yes, really. The earlier you can start preparing for the holiday season, the better! Once you get through this year’s shopping list, start looking towards next year. If you start saving in January, you’ll have a better chance of getting through the holidays without stressing out so much about how holiday spending will impact your bottom line. Create a holiday savings plan and start putting a little bit of money away every week. By this time next year, you will have a substantial budget to work with.

 

It’s very easy to be swept away by the magic of the season and forget the reality of your bank account. But keep in mind that the holiday season isn’t supposed to be about new gadgets and shiny packages. The holiday season is a time to focus on quality time with loved ones and reflect on the previous year. With some diligent planning and financial creativity, you can get through the holidays without going into debt and still enjoy the spirit of the season.

 

 

 

 

 

 

 

 

 

 

The Multiplier Effect: What it Means for You in 2020

multiplier effect

In 2020, as you consider where and how to spend your hard-earned paychecks, there’s one economic force we at Veitengruber Law would ask you to consider: The Multiplier Effect.

Why exactly is it that money must be spent locally to benefit the community? In short, it boils down to the multiplier effect, which states that each dollar spent has an impact that is greater than the original sum.

For example, if you were to visit a New Jersey locally-owned hardware store to purchase a new door for your home rather than choosing to order from a big-box chain, the money you spent will allow that store owner to earn profits and pay a local employee, who will likewise spend money in the community, hopefully at another local shop, thus multiplying the positive impact of the original amount spent.

In this way, each dollar spent locally has the potential to send positive economic reverberations throughout the region, and will continue to do so as long as the majority of cash earned continues to circulate locally.

When we think about cities and towns in NJ that have gone from thriving and vibrant to economic wastelands, it is evident that these communities lack local investment. Without local businesses and investors reinvesting their wealth, the very infrastructure supporting the community fractures and collapses.

In order to avoid such conditions, businesses and investors alike must commit to the local communities that support them. By the same token, consumers can maximize the impact of every dollar spent by finding local businesses to support.

What will the multiplier effect mean for you as a New Jersey resident in 2020? Should you cancel your Prime account and forego the convenience you gain as a modern citizen of a global economy? Of course not. There are, however, ways you can spend locally without having to restructure your life.

First, if you’re in the fortunate position to have the capital to purchase an investment property in the new year, consider looking nearer to home rather than just shopping for the best bang for your buck. Not only will doing so encourage additional investments – people can’t invest money they don’t have, after all – but it will also improve the New Jersey landscape by ensuring property development continues to happen right here where we live.

Furthermore, every dollar spent in New Jersey is not only just earned and re-spent, but it is also taxed! Consider that cash spent locally can be taxed repeatedly – nearly indefinitely – until someone in that cycle breaks the chain by spending the money elsewhere. Tax dollars are absolutely essential to the establishment and maintenance of vital community services: schools, libraries, parks, and public transportation are just a few of the most beloved public services, none of which will survive without a steady stream of local spending.

What if you’re a first-time home buyer rather than a big-shot investor? Are the dollars you spend really going to have a significant impact, or does massive impact only accompany huge property investments? The answer couldn’t be clearer.

In the calendar year 2019, if we only consider NJ buyers who purchased new homes, they will have splashed out more than two billion dollars. When the National Association of Home Builders crunched the numbers, they calculated that the multiplier effect of such an astronomical sum would account for the creation of nearly four million local jobs, over $180 million toward wages and income of those workers, and $225 million in revenue for local tax funds.

Furthermore, this two billion will still be positively impacting the community after 12 months! Clearly, if we want our incomes to sustain, nurture, and grow the very towns in which we live, we have to commit to spending, investing, and hiring locally whenever possible.

If this article has sparked you to action, and 2020 will be your first year focusing on keeping your money circulating here at home in NJ, we couldn’t be more delighted. Here are easy-to-use resources to get you started:

 

 

Budgeting Tips When You Live Paycheck to Paycheck

paycheck to paycheck

It’s a reality that life’s expenses simply cannot be ignored or avoided regardless of our circumstances. Most people work hard every day to earn the money they need in order to meet those expenses. Some people literally live from “paycheck to paycheck”, scrimping by on mere dollars by the time they get paid again – only to have their entire paycheck GONE nearly as soon as it hits their bank account. Believe it or not, there is also a group of people who don’t even have bank accounts!

If your income is just enough to allow you to squeak by each month but you aren’t able to put any money into savings, your financial future looks bleak. You need to be able to put some money aside for retirement as well as emergencies that arise along the way. If you have children, you’ll also most likely want to be starting a college fund for them.

Don’t think you can do it? Try out some of the following tips to see if you can make your money stretch just a little bit further each time you get paid.

First, you need to know your total monthly costs 

When you have some free quiet time, sit down (with your significant other, if applicable) and set out to determine exactly what your total necessary monthly expenditures are. Be sure to include:

  • Living expenses (rent or mortgage) plus any HOA fees
  • Utilities (gas, electric, phone, internet, water & sewer, trash removal, recycling)
  • Cell phone bill(s)
  • Car payment(s)
  • Gas (for vehicle) OR
  • Public transportation fees (train, subway, bus)
  • Food (include groceries as well as any restaurant bills)
  • Prescription and OTC medications
  • Other

Once you are sure you haven’t forgotten any necessities that you pay for regularly, the total amount is how much you’ll need every single month. If you have money left over, you’re doing great! Stop spending it and start putting a bit of the surplus into a savings account every month. Look for savings accounts that offer the most rewards. You may also choose to start investing some money if you have a monthly surplus, even if it’s a small surplus. Make your money work for you.

Why is living “paycheck to paycheck” so risky?

Chances are good that if you’re reading this blog post, you’re not left with much (if any) surplus after paying all of your necessary monthly bills. The very definition of living “paycheck to paycheck” involves regularly running out of money before your next pay day rolls around. If you’re finding that you need to borrow money from a friend or utilize your credit card for daily living expenses when your paychecks fall short, you’re not alone. Over 60% of Americans report having lived “paycheck to paycheck” at some point in their lives.

This is a very dangerous way to live because you make yourself susceptible to significant financial damage, like skyrocketing credit card debt, foreclosure, payday loan debt (DO NOT TAKE OUT A PAYDAY LOAN), bankruptcy and worst of all: a rapidly plummeting credit score.

Tricks to make ends meet

Consider downsizing – Whether just temporarily or for the long haul, think about relocating to a living situation that is more affordable. If you own a home, consider selling and renting a small apartment while you build up a savings account. Alternatively, buy a smaller home, move to a less expensive area, shack up with family, or take in a roommate (or several). Use the extra money to pad your savings account and bulk up your retirement plan.

Shop around – Look for better deals on all of your utilities. You can shop around for the best energy prices, and regarding other utility companies – it never hurts to ask. Negotiating a lower monthly payment is very possible because most companies don’t want to lose a valuable customer.

Stop using Check Cashing services – If you’ve avoided opening a bank account because of the required minimums, take a look at your local Credit Union. They tend to have more reasonable rates and minimums. You simply must have a bank account in order to make sure that your bills are paid on time, AND if you’re cashing your checks through a Check Cashing service, you’re losing a huge portion of your money due to their exorbitant fees.

Make a budget and stick to it – It is imperative to establish the basic costs of your day to day living and to stick to that number. You may find that making your coffee at home saves you a lot more than you’d realized, and that switching to store brand toiletries results in pretty substantial savings! Clip coupons and read grocery store flyers every week. Only buy what you absolutely need if it’s not on sale or you don’t have a coupon for it.

Pay down your debt – We realize this one is potentially the most challenging to do when you’re just getting by. We’re here to tell you that it is possible to wipe out your debt. That’s right – if you’ve been paying a large chunk of money just to manage your credit card’s minimum payments – we can help you eliminate those payments altogether, giving you a much more solid financial footing to stand on.

 

3 Ways to Teach Your Kids About Budgeting

budgeting

Every parent wants the best for their child. As a parent, it is your goal to raise bright, capable adults. And yet, even while saving thousands towards their child’s college fund, many parents do not discuss financial issues with their children. Many parents wait until high school to begin having financial discussions with their kids, but many financial experts caution against this. While it may seem shocking that your four year old is picking up financial habits, children actually start developing an understanding of money from a very early age. Even if your kids are already in their teens, it is never too late to start teaching them smart ways to earn, spend, and save money. If you are ready to have the money talk with your kids, here are some great ideas to start.

1. Teach them how to earn money.

Some parents do not like the idea of an allowance earned for work kids should be doing as contributing members of a household. It can also be difficult to find the funds for a weekly allowance. But an allowance can help your kids connect early on that work and money go hand in hand. Allowances do not have to be a lot. Starting off with quarters for certain tasks or a dollar a week can still facilitate the same lesson. You can choose to reward household chores that go above and beyond the normal household work, or instead opt to provide a financial reward for earning specific grades in school (or other similar milestones.)

If you have a little one with an entrepreneurial spirit, encourage them to practice their business savvy with babysitting jobs, neighborhood yard work, or a lemonade stand. The main goal here is to connect hard work with financial gain. Money does not just magically appear and it is important for kids to understand the dedication and commitment required to earn a buck.

2. Teach them how to spend money.

One of the biggest lessons you can teach your child is how to differentiate between needs and wants. Even adults struggle with this lesson sometimes, so including your kids in conversations about spending can give them the head start they need for future financial success. We often make financial decisions on behalf of our children without explaining why. If your child is begging for ice cream on your weekly grocery run, instead of just saying “no,” take a minute to explain why getting chicken, potatoes, and veggies for the whole family is more important. When back to school shopping, explain why pencils and notebooks are more important than decorations for their locker.

In addition to this, let your kids make real life transactions. Help them count out coins from their allowance to buy a treat. When they are a little older, make them responsible for buying their lunch by giving them actual money instead of simply adding money to their online account. A big part of being a financially healthy adult is knowing how to spend responsibly. Teaching budgeting skills early can set your child up for success in the future.

3. Teach them how to save money.

Let’s face it: saving money can be boring for adults, much less kids. It can be hard for kids to fight the desire to instantly gratify their spending urges when they finally have money of their own. Adding a little creativity and fun to savings can liven up the process while still allowing your kids to learn very important financial lessons. Have your child draw something that symbolizes the item they are saving for and then slowly start to color it in the more they save for it. This will give them a visual to remind them of their goals and help them see how far they have come in achieving them.

While piggy banks are time tested savings tools for smaller children, when your child get a little older it may be worthwhile to open a savings account in their name. Whether you do this at an actual bank or online, opening an account for your child will give you the opportunity to teach your kids about banking. From monthly statements and fees to deposits and withdrawals, your child will be able to watch their savings grow. You could even designate this savings account for college, a car, or some other big financial expense. Involving your child in the saving process for these big ticket items will help your child feel invested in their financial future.

There are plenty of creative and meaningful ways to teach your kids about good financial habits. Taking the time to provide lessons about money now can save them from struggling in the future. When it comes to teaching your kids about money, it is never too early to start!

How to Save Money This Summer and Still Have Fun

With longer days, warmer weather, and the kids out of school, summer is a time for exciting activities, long-awaited trips, and idle indulgences. It can also be very expensive. Paying for extra summer activities, vacations, a climbing electric bill, and even more daycare can cause a strain on your finances. This doesn’t have to be the case. There are plenty of ways to stay frugal while indulging in the joys of summer. Here are a few ways to enjoy the summer without letting your spending run wild.

1. Skip the Gym

During the summer, the weather is nice and you find yourself spending more and more time in the great outdoors. Summer might be a great time to consider canceling your gym membership so you can take advantage of the great weather. Walking, running, biking, hiking, swimming, and outdoor sports are all great ways to stay in shape that allow you to enjoy being outside. While some people might need the gym for specific workouts, the majority of those with a gym membership could get the same workout at home without spending the extra cash. If you want to keep your gym membership for the winter, see if your gym will pause your membership plan through the summer months.

2. Find Free Fun

Summer is the ideal time for festivals, concerts, fairs, carnivals, and other free activities. Check out your town’s calendar or website to see what events are upcoming. Free events can be a great way to get the whole family out of the house and doing something together, or it can be a great excuse for an inexpensive adult escape. Take advantage of local parks. If you live near a national park, scope out the free entry days and plan a day trip. If you are looking to relax, check out a good beach read from your local public library. You don’t have to drop a ton of money to enjoy summer!

3. Travel on a Budget

Most people tend to do the most traveling in the summer months. Kids are out of school and the sunny weather energizes the explorer in all of us. The good news is you don’t have to ruin your budget to travel this summer. If you are up for an outdoors adventure, camping is a fantastic family activity that can be very inexpensive without sacrificing any of the fun. Many regions known for camping will have free campsites, allowing you to spend more money on seeing the sights and doing fun outdoors activities.

If camping just isn’t your style, you can still save money without having to rough it. Airbnb homeowners offer great options for budget travelers all over the world, from quaint cabins to glamorous apartments in big cities. Opting for a vacation rental with a kitchen can also save you money in food expenses, allowing you to stay in and cook instead of going out for every meal. When traveling anywhere, be flexible with your travel days in order to take advantage of any flight or accommodation deals.

4. Be Smart About Keeping Your Home Cool

Jersey summers can get rough. The humidity coupled with some really hot days can be miserable and force you to stay inside. On these days, it can be tempting to crank the AC. Instead, try keeping your thermostat set in the mid-70s when you’re home, turning your AC up a few degrees when you’re out of the house. Keep your home cool in other ways, like black-out curtains to block out the sun. Avoid cooking hot meals that get your kitchen boiling on really hot days. Summer is a great time to do some grilling outside or whip up something quick and easy in a crockpot. This will keep your house cool and prevent you from turning down the AC after your oven heats up the house. Keeping your thermostat at a reasonable temperature can save you up to 10% on your electric bill.

5. Shop Second Hand

Summer is a great time for refreshing your style. If you find yourself with the shopping bug this season, think twice before running out to the mall. Yard sales and flea markets tend to be in full swing during summer months, offering incredible deals on everything from vintage dresses to nesting tables for your living room. Thrift shops like Goodwill and second hand home improvement stores like ReStore are great places to score excellent finds for your wardrobe or your house. In addition to the money you can save by thrift shopping – exploring yard sales, flea markets, and second hand shops are a fun and unique way to spend a summer morning.

You don’t have to break the bank to enjoy everything New Jersey’s hottest months have to offer. Keeping your finances in mind during the summer will allow you to enjoy this season without finding yourself broke in the fall.

What Should my Budget Look Like After a New Jersey Bankruptcy?

New Jersey bankruptcy

When overwhelming debt and missed payments start to control your life, bankruptcy can offer a fresh start to begin rebuilding your finances. It is important to take advantage of this clean slate by doing everything in your power to learn from past financial mistakes and create better habits for your future. Debt can accumulate from overspending, a medical emergency, or the loss of employment or income. No matter how you found yourself in debt and filing bankruptcy, there are steps to take to make sure it doesn’t happen again. One of the best ways to become more aware of your finances and prepare yourself for unexpected expenses is to create a household budget.

A household budget will allow you to track your spending and find opportunities to build your savings. Every budget will look different for every household, which is why you need to make sure you are creating a realistic budget that works for your household. Learning how to use this helpful tool will help you manage your money and bounce back fast after bankruptcy. Here are some steps to creating a household budget while recovering from bankruptcy:

1. Track Your Expenses

Take the first thirty days after bankruptcy to track how much money you are spending and what you spend your money on. The best way to do this is to create a spreadsheet listing different categories of expenses and then tracking these expenses throughout the month. Make sure you include every purchase you make to ensure you are getting the most holistic view of your finances. After you spend one month tracking your expenses, subtract your total expenses from your total monthly income.

2. Adjust Your Spending Habits

What are the results? Pay attention to where your money is going. You should never be spending more than you earn in a given month. If you have more money going out than coming in, it’s time to figure out where to make some spending cuts. You should start by determining which expenses are essential, like groceries and utilities, and which expenses are not. Start cutting back on any non-essential expenses.

3. Allocate Your Income

Once you know where your money is going and where you can start to make some cuts in spending, it’s time to figure out how you’re using your money. The best way to do this is to determine what percentage of your monthly income goes to specific expenses. For instance, if your monthly income is $4,500 and you spend $1,000 a month for your mortgage payment, you’re spending 23% of your monthly budget on your house. Here are some suggested percentages to compare with your budget:

  • Medical: 5-10%
  • Housing: 25-35%
  • Transportation: 10-15%
  • Savings: 10-15%
  • Food: 10-15%
  • Utilities: 5-10%
  • Insurance: 10-20%
  • Recreation: 5-10%

These percentages are only meant to serve as rough guidelines and they will not work with every household, but this is a great jumping off point for creating your household budget. If you find your spending in the above categories is significantly higher than recommended, you may want to start cutting back on those costs.

4. Finalize Your Household Budget

Based on the above information, you should be able to create a monthly budget that works for your household. Continue to track your expenses to keep yourself accountable for your spending and to make sure your budget is realistic. Staying aware of your spending habits will help prevent former bad habits from resurfacing. Pay specific attention to growing your savings and emergency funds. These financial reserves can really save you in the event of an emergency.

At Veitengruber Law, we know that life is unpredictable and rarely goes according to plan. A monthly budget can’t account for everything life will throw at you, but it can help you prepare for unexpected life events and sudden expenses. Creating a household budget will help bring some stability to your financial status and ensure you can weather the set-backs. If you need help making your post-bankruptcy budget, we can help!