Budgeting for NJ Business Owners

If you’re a NJ business owner, you know it is essential to find efficient ways to keep track of your finances. Establishing a business budget can help you track and organize your financial resources so you can make informed decisions about how to run your business. But not every budget is the same and different budgets work better for different companies. There are a variety of budgets to help you manage your spending and utilize successful strategies in order to maximize your assets and revenues. Here, we lay out some of the most popular budget plans for your business:

1. Master Budget

Your master budget is the big picture. It combines all of a company’s individual budgets (sales, operating expenses, income streams, etc.) to help business owners evaluate the overall performance of their business. This type of budget will give you a comprehensive overview of your company’s general financial health. This budget is best utilized by larger companies, allowing different managers to see how their departments’ progress aligns with company goals.

2. Operating Budget

An operating budget is typically what business owners think of when they hear the word “budget.” This type of budget is a projected forecast of income and expenses over a specific period of time. An operating budget allows business owners to get an understanding of their business’s financial health on a weekly, monthly, and yearly basis. Over time, owners or managers can analyze this data to figure out in what areas overspending is occurring.

3. Financial Budget

Unlike an operating budget, a financial budget looks beyond income and expenses to assets, liabilities, and equity. Typically, data for a financial budget is laid out in a balance sheet to provide an overview of the financial health of the business. This kind of budget is very important for determining a business’s value relative to public stock offerings, funding opportunities, or for a merger.

4. Cash Flow Budget

A cash flow budget allows business owners to project how and when cash comes into and out of a business during a specific time period. This helps a business understand if they are managing their money efficiently. In analyzing a cash flow budget, a business owner can see whether or not upcoming financial obligations will be met or if they need to look into other financing options.

5. Labor Budget

If your business has employees, creating a labor budget is important to help you determine how many workers you need to employ to achieve your desired level of productivity. This budget is helpful for establishing payroll costs of running your business and, in some cases, planning for the hiring of seasonal workers.

6. Capital Budget

This budget is helpful for business owners preparing to purchase large assets like expensive machinery, new technology, or a bigger work space. This kind of budget establishes what the cost of the new asset is and analyzes whether or not the predicted return on investment is worth the expense of the purchase. This can help business owners plan for a big purchase as well as determine cost effectiveness.

7. Strategic Plan Budget

Most businesses work under the vision of a strategic plan. A strategic plan sets up the long term goals of a business—but doesn’t always include long term budget goals. Make sure you don’t make that mistake. By including financial information in your overall vision for your business, you can better understand how you need to plan in order to create financial growth.

8. Static Budget

A static budget is a financial plan that remains fixed. This a good budget for businesses that have very predictable and consistent income and expenses. Business owners are able to judge the performance of their business by comparing their static budget to the actual financial performance of their business. This can be particularly useful in monitoring a increase or decrease in sales performance.

Budgets are important to the success of any business. Besides allowing you to track your success internally, a well maintained budget can help you attract investors or secure business loans in the future. Don’t overlook the importance of creating an effective financial plan for your business. Veitengruber Law offers the long-term planning you need. Our experienced team can help you devise a sound financial plan to protect your assets and grow your business to new levels of success.

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10 Clever Ways to Save Money in the New Year

By the time the Christmas season passes us by, people are ready to pull out their hair – which may contain a few extra grays after the stress of the holidays. It’s easy to let stress get the best of us, and truthfully, it’s not uncommon to feel like life is a tad unorganized. Thankfully, we get a chance to wipe the slate clean, pull our scattered lives back together, and set an ambitious goal for the coming year. For many people, that means sorting out money matters. In order to adapt a “tabula rasa,” mentality, it’s important to commence the New Year on the right financial path, with a solid budget in place, and your consumer mind in check.

The December holidays can put us in the consumer mindset, provoking the typical American to drop money on anything and everything. Before you know it, you may have racked up debt as high as Mount Everest! Here are a few tips to getting off the debt mountain and back on solid ground.

1.      Budget Build

This may seem like an obvious starting point, but it provides the foundation from which all other money matters flow. A budget’s “job” is to create a sense of financial order. Here’s a piece of advice that just might save you a spike in blood pressure: don’t attempt to draft, edit and finalize your budget in one sitting. Instead, once you’ve collected all necessary financial details (money income and outflow), break up the work into a few manageable sessions. After completing an organized budget table, closely search for places where you can either decrease debt or augment your savings goals. Don’t forget that you should be saving more than you’re spending!

2.      Home-Cooked Helpings

Going out to eat is one of the ways in which many American families spend a significant amount of money. Because money that is spent on items outside of the home is the most flexible, it is the primary category where substantial saving can take place. Preparing more home-made meals is easier said than done, mainly because of the time commitment. There are different strategies that you can use to cut down on time and money spent at the grocery store. For example, make a 10 week meal plan, and every 10 weeks, start the plan over. You won’t get tired of the meals, but it helps keep you prepared for the week ahead as well as knowing what groceries you will need well in advance.

3.      Smart Shopping

Coupons are your best friend. The mail, apps, and grocery stores’ flyers are just a few places where coupons can be found. Apps such as RetailMeNot and BradsDeals make it easy to compare prices at retail stores to guarantee that you’re getting the best buy. You’re right, comparing ticket prices for expensive items is crucial, but check for discounts on more affordable items, too.

4.      Sustainable Solution

Helping the Earth is incredibly important, but so is saving a couple bucks on your heating bill. Consider setting your thermostat just a few degrees lower this winter, especially when you’re not around. A few degrees may not seem like it would make much of a difference in your heating bill, but remember, every little bit helps.

5.      Air Leak Atrophy

Similar to the money-saver listed directly above, any air leaks in your house will contribute to an increase in your heating bill. Slowly leaking air may not be at the top of your list of things to fix in your household, but it’s an easy job that will produce a ROI.

6.      Starbucks Self-Control

“Sleep-deprived and busy, busy, busy” – we often hear these words when we ask someone how they’re doing. It’s true, Americans are busy, but we seem to rely on caffeine to replenish our energy. Caffeine isn’t the worst thing to be addicted to, but it does hit the bank account hard, especially when your coffee stop becomes a daily habit. Try cutting your coffee stops in half, or just stop on Fridays. Let that be your motivation to get you through the week.

7.      Show the Library Some Love

Rather than spending money on movies, books, or magazine subscriptions, drop by your local library to see what they have to offer. Many libraries provide free checkouts for countless books, various magazine subscriptions, and DVDs.

8.      Stop Subscriptions

Do you have random magazine or other subscriptions that you just don’t use? Save a few dollars and cancel it as soon as you can. It’s easy to bite on the “one month for free” bait, but if you forget to stop the subscription, you’ll be a quarter of the way up Mt. Everest before you realize that you don’t even read half of the magazines that arrive at your door.

9.      Exercise Economically

Naturally, exercise has a myriad of benefits, from keeping your weight in a healthy range to boosting your mental health and even improving your body’s health at the cellular level. Humans were created to move! Unfortunately, the cost of gyms and personal trainers can be outrageous. Instead, make a habit out of grabbing a friend to do an activity that doesn’t revolve around food or drinks. Try hiking, biking, taking a walk, or any other activity that gets you moving.

10.   Sidestep Shopping Online

Simply scanning your email inbox can be a slippery slope, especially if you’re one to get sale alerts from your favorite stores. Avoiding these promotions and sales can save you a lot in the long run. Using email filters, you can automatically send all of your promotion and sale emails to a special folder, limiting your temptation to see them right when they come through.

Saving money is a challenging task when everyone around you falls prey to the lure of retail. There are countless ways that you can save money in 2019, but it will take some discipline. Start with our tips and add a few of your own. Before you know it, your holiday debt will be reduced to dust and your savings account will start to grow.

Budgeting in Retirement: Living Well in Your Golden Years

Having a well thought-out budget is the best way to start your retirement on the right foot. Retirees must plan to have a form of steady income and create a budget that fits their expected lifestyle. In retirement, financial priorities will change with your changing lifestyle. It can sometimes be hard to determine what kind of retirement budget is realistic until you have entered retirement. While some people overestimate their expenses in retirement, some people struggle to adapt to life on a fixed income. For these reasons, it is a good idea to revisit your budget several times a year.

Retirement involves a lot of big changes, but one of the biggest changes is how most people get paid. Instead of receiving a weekly or biweekly paycheck, retirees typically rely on income that pays out once a month. On top of this, many people find their monthly income reduced in retirement. It can be a big mental shift for people entering retirement to suddenly adjust to all of these changes. Sometimes the best way to adjust your budget in retirement is to go back to basics. Here is how you can take one month to monitor and analyze your retirement budget:

Throughout the month, keep all receipts, payment confirmations, and a tally of any cash spent. It is best to record these expenses daily so you do not accidentally leave something out. Use a spreadsheet, notebook, or app to track your expenses. In tracking spending for a month, you can get a good idea of where your money is going. At the end of the month, sort your expenses into categories: groceries, dining out, entertainment, phone, utilities, housing, insurance, transportation, etc. Be sure to factor in irregular expenses like holidays and birthdays. Your expenses in December are likely to be a lot different than your expenses in June, for instance.

Next, analyze the results. This analysis is meant to be a realistic assessment of your lifestyle as it relates to your spending and income. Where is your money going each month? If your monthly budget was based on your pre-retirement lifestyle, you may see some significant differences between your expected spending and your actual expenses. Maybe you spend less on transportation and entertainment, but you spend more on eating out and medical expenses. Pay attention to these shifts in spending and make sure you are adjusting your budget accordingly.

After you have identified the trends in your spending, figure out where you can cut expenses. Determine which expenses are needs (like bills, housing, transportation, etc.) and which expenses are wants (like entertainment, hobbies, and gifts). In retirement, your “needs” may change. While you may have needed two cars when you and your spouse were working, is this still a necessary expense? Are you eligible for discounts to your cell phone or insurance plan? While you want to make sure you cover your essential expenses first, finding ways to make cuts to necessary spending will give you more financial freedom in general.

Finally, it’s time to put all these insights into your finances to create a new plan for your budget. Identify five goals that make sense for your income and expected expenses. Goals help you align your budget with the intention of getting the most out of your income. Make your goals specific and give yourself deadlines. Find ways to keep yourself accountable. Sign up for auto-pay, use an envelope system to categorize your spending, or get your spouse or partner to join you in your strides to reach your goals. A budget is only as good as your ability to stick with it!

You can do this financial check-in every six months or whenever your budget seems to be spread too thin. Sticking to a budget will help you feel more secure and relaxed so you can enjoy your golden years. Get your finances back on track by taking a fresh look at your retirement budget as we move toward the New Year!

5 Mistakes to Avoid After NJ Bankruptcy

After your NJ bankruptcy, a common concern is how to re-establish your credit score. The real challenge is creating new financial habits so you don’t find yourself back in the same hole all over again. At Veitengruber Law, our holistic approach to financial health means our job doesn’t end after the bankruptcy is closed. We work with you to repair your credit and create healthier financial habits.

 

Top Mistakes to Avoid After a Bankruptcy Discharge:

 

1 – Ignoring your credit report

When rebuilding your credit subsequent to a bankruptcy discharge or reorganization, you will want to be very attentive to your credit report. Your creditors are supposed to report any discharged debts included in the bankruptcy to the credit bureaus. These reports should show a zero balance and include a note indicating the debt has been discharged. It is crucial to follow-up on this and ensure that all creditors are reporting to credit bureaus correctly. If discharged debt is being wrongly reported—as either a charge-off or an open account—late or missed payments can continue to show up on your credit. This can further damage your score and make it more difficult for you to get new credit.

2 – Applying for multiple new credit lines

It can be tempting after bankruptcy to rush out and apply for a gaggle of credit cards or loans in an attempt to quickly repair credit. However, it is important to give your credit score time to rebound before applying for new credit. The impact of a bankruptcy is strongest in the first year after filing, although it can stay on (and affect) your credit report for up to ten years. Instead of rushing into opening several credit lines at once, be patient and take the time to research your best options.

3 – Failing to read the fine print

When you do start applying for credit cards, it is important to remember that not all credit cards are created equally. Some credit cards will be more helpful to those rebuilding post-bankruptcy. A secured card, for instance, allows you to deposit cash as collateral up front to create a line of credit. That way, you are not able to charge more than your initial deposit. With any card you choose, it is important to read the fine print of your terms to make sure the card will work in your favor.

4 – Falling for credit repair scams

Many unethical “credit repair companies” make big promises about performing miracles to improve credit scores, but they rarely ever deliver the results promised. These companies rely on misinformation to scam those that don’t know much about how credit works. Some of their tactics may even be illegal. Keep in mind that if something seems too good to be true, it probably is.

5 – Making things too complicated

Ultimately, when it comes to rebuilding your credit after bankruptcy, you need to go back to the basics. What bad habits caused you to file for bankruptcy in the first place? An unflinching assessment of your spending habits will help you determine which factors led to the bankruptcy and determine where you need to make changes. Figure out what your credit-bingeing triggers are and work toward setting spending limits for yourself. Simple things like making on time payments, keeping debt to a minimum, and sticking to a healthy budget are excellent foundations of any financial strategy and will get you on the road to financial health quickly.

You’ve been through the hard-fought financial battle of bankruptcy and come out victorious on the other side. Now is the time to think positively about your financial future. Rebuilding your credit after bankruptcy takes time and patience, but you can use the knowledge and financial savvy you’ve learned along the way to move forward to a brighter future. Veitengruber Law is here to help. We are skilled in advising clients and creating easy-to-follow strategies to rebuild credit. Call for your free consultation today.

10 Easy Ways to Improve Your Finances

1. Start saving
   It seems obvious, but many times it also seems impossible. By the time you pay your bills and have some spending money, every paycheck seems to fly out the window. The easiest way to save is to make sure you never have the chance to spend those funds in the first place. Most people have direct deposit these days; set up an automatic transfer of 10% of your net pay into a separate savings account each pay period. You won’t miss it, and it builds up pretty fast. When you get a raise, try redirecting the entire difference in your net pay over to savings. Your net pay will seem unaffected on your end, but your nest egg will grow that much quicker. You will be prepared for an unforeseen expense like an emergency car repair or for a “rainy day” when you want to take a long weekend out of town with friends.

 

2. Make a budget – and be realistic
   Determine your starting point by keeping track of every dollar spent in a month. Now separate each expenditure into a category: utilities, housing, food (groceries), eating out, entertainment (movies, clubs, golf, etc.), childcare, transportation, car payment, and so on.Where are most of your discretionary funds going? See if there is anything you can cut back on or cut out altogether. If you have a wicked Starbucks habit, you might decide you can do without that daily grande latte after seeing that you are spending over $80 a month on coffee. Don’t want to quit your Starbucks habit cold turkey? How about only getting that latte once a week (say only on Fridays or Mondays) instead? Your $80 a month expense just went down to $16. You can’t decide to live on canned soup five days a week – you know it’s not going to happen, so don’t set yourself up for failure. Look at where your money has been going versus where you want it to go.

 

3. Little changes can make a big difference
   As you saw, coffee can be a bigger expense than you realize. There are a lot of those little things that can suck money out of your wallet. Limit your dinners out each month. Make the transition less painful by allowing yourself one or two fancy dinners out, but eat at home the rest of the time. Pack your lunch. Join a carpool. Use a filtering pitcher, such as Brita ™, instead of buying bottled water. Feed a meter instead of using valet parking. Shop for clothes at consignment and second hand stores; you might even find higher quality items than in a big box store! Cigarette smokers spend hundreds of dollars a month on a product that they literally set on fire. That type of savings might make a lifestyle change a real incentive. It all adds up.

 

4. Lower your existing monthly bills
   If you’ve always made payments on time, call your credit card company and see if they are willing to lower your interest rate. If you haven’t reviewed your cell phone plan in a year or more, it’s time to compare new deals and potentially cut your costs in half. Consider whether you really use that gym membership. If you barely go, it’s time to cancel it. Consider workout alternatives like YouTube videos or running groups. If a brick and mortar gym is where it’s at for you consider this; membership deals are generally better in the summer when everyone else would rather exercise outside. You could get those initiation fees waived or get a lower monthly rate.Shop for cheaper car insurance. Lower your electricity bill by using timers and power strips, and your water bill by checking for leaking faucets or toilets. Look into local weatherization programs that can troubleshoot conditions in your home to prevent wasting money on heating and air conditioning. Many times these programs are run by your utility company or local government and are free.

 

5. Set goals
   Hard decisions are easier when you see the payoff at the end. Want to take vacation? Set up a retirement portfolio? Send your kid to college? Keep that in mind when you’re setting up your budget, or deciding if it’s really worth it to go to Olive Garden tonight, or if you really need yet another pair of black shoes.

 

6. Check your credit reports
   The three major credit reporting agencies are Experian, TransUnion and Equifax. You are entitled to a free report annually or whenever you are denied credit directly from all three agencies. Look for mistakes and dispute them! This is even more important if you have a common name or share a name with someone else in your family. Check your credit report for bills you forgot about or never received. Maybe there’s an old bill from a dentist that got lost in the mail or never got forwarded when you moved. Even a small bill that went to collections stays on your report for 7 years after it is paid off. A low or lower credit score can mean increased interest rates or outright denial of credit when you need it most.

 

7. Don’t pay full price – for anything
   Clip coupons; look for online deals, shop sales. Get discount codes from places like ebates.com, retailmenot.com, or slickdeals.net. Look for Deals of the Day on Amazon. Utilize discounts for services or experiences by using Groupon and Living Social.

 

8. Change where you bank
   Many banks are rife with fees. Fees for less than a minimum balance. Fees for ATM use. Fees per check. Shop around, find a bank that values your business and doesn’t drain your account when you want to use your money. Veterans and business owners can often get even more perks, such as free certified checks or safety deposit boxes.

 

9. Utilize employment benefits
   Your benefits package at work can offer a lot more than you think. Does your employer offer matching incentives for retirement account deposits? Flexible spending accounts? Free counseling or other wellness support programs? Take advantage of everything you can.

 

10. Make sure you are financially informed
    Understanding basic concepts when it comes to investing, spending, saving, interest rates, etc. will benefit you (and your bank account) in the long run. Find out if your employer offers programs on these subjects, or seek them out yourself through online videos or books by consummate professionals in the field. If you have a personal accountant or financial planner, ask questions and ask for advice and heed it! You can’t make good choices if you don’t have the background information needed to make them.

How “Keeping up with the Joneses” can Send You into Bankruptcy

What exactly is “Keeping up with the Joneses”?

 

“Keeping up with the Joneses” is a phrase that originates from a 1913 New York Globe comic strip by Arthur (Pop) Momand. The use of this coined phrase now refers to the actions of striving to keeping up with one’s neighbors in reference to social status and spending. “Keeping up with the Joneses” sometimes begins to happen for an individual when they bear witness to a neighbor or loved one coming into a large financial windfall – perhaps by winning the lottery. The neighbor may start to spend their newfound money on luxuries like cars, vacations, clothing, etc. This inspires said person to begin spending money outside their means to compensate for jealousy of the newly rich neighbor. Unfortunately, these actions can lead to debt, financial crisis, and bankruptcy.

 

Take the story of NJ lottery winner Pedro Quezada, formerly from the Dominican Republic. Quezada was from Passaic, New Jersey, and winner of $338 million. After hitting the jackpot, Quezada (owner of a local bodega) proclaimed he was thrilled because he could properly take care of his family.  Spending immediately began, but maybe not in the exact way his neighbors anticipated.  He was constantly approached by frequent customers of his bodega and friends of his looking for handouts, some traveling from as far as Colombia. There were even several false reports on news outlets claiming he declared to pay the rent for his neighbors, and eventually this led to a falling out with them. In fact, Quezada was even sued by his live in girlfriend of ten years for half of his winnings a year after winning the lottery. Eventually Quezada’s attorney won the case because the couple had never been married therefore his ex-girlfriend was not entitled to any of the winnings.

 

Unrealistic expectations

 

Suppose you have a neighbor (or family member) who just won the lottery. They decide to throw a lavish party to celebrate and show off their windfall. Maybe they add in that in-ground pool they have always wanted, or purchase that car or boat they had been dreaming of, and while they’re at it they make upgrades to their landscaping and home. These types of actions can cause a trigger effect with neighboring individuals who begin to look for ways to get rich quick or take out a loan much larger than they are capable of repaying just to be able to unrealistically and irrationally upgrade their lifestyle to keep up with their newly rich friend or loved one. This is a common theme that leads more often than not to bankruptcy and financial crisis.

 

Managing your money well

 

Watching someone win the lottery may seem like a super exciting event, and you may feel inspired to make rash decisions which can then result in irresponsible spending. Our advice? Forget about “Keeping up with the Joneses.”

As an NJ bankruptcy attorney firm, we at Veitengruber Law focus on aiding individuals with managing their debt and finances more realistically to protect their assets in order to avoid bankruptcy. If you feel as though you are lost in your expenses and debts because you’ve tried to live beyond your means, please reach out to us PRONTO. We can help, and we WANT to help.

Self-Employment Budgeting Tips

When you’re not working a 9-5 job with a stable, predictable salary dispensed into your bank account on a set schedule, budgeting for recurring monthly expenses can be a bit tricky. While being self-employed can afford you the freedom to work flexible hours, have a varied office location and the ability to do something you love, it does not always provide the easiest and most consistent stream of income to rely on. This is where careful, diligent budgeting comes in handy.

 

1) Always budget for the necessities first!

While you are most certainly deserving of a dreamy resort vacation this summer, that doesn’t mean it qualifies as a necessity, as your vacation can easily be delayed until you can truly afford it. Necessities solely include staples like your rent or mortgage payment; groceries, gas, medical insurance, car insurance and car payment or other required transportation costs; utilities like electricity, phone, internet, water, sewer and garbage. It is also critical that you budget for your income taxes, as they will no longer be automatically deducted from your income. Anything else not featured on the aforementioned list does not qualify as a necessity and therefore you can live without it and save up for it before purchasing it.

 

2) Establish an emergency fund.

If you haven’t done so already, creating an emergency fund that has enough money to sustain 3-6 months worth of your necessary expenses is an absolute must for the self-employed. Not only does this provide you with added financial security and stability, it also buys you time to find a new job or side gigs if your self-employment opportunity does not prove lucrative enough to afford your expenses.

 

3) Once you have your emergency fund in place and have mastered budgeting comfortably for the necessities and have some wiggle room left over in your budget each month, you can start budgeting for “little luxuries.”

When I say little luxuries, I mean just that. Not living large, but treating yourself to small and affordable indulgences in moderation but on a regular basis. This may include something as mundane as ordering a Netflix subscription and Chinese takeout once a month, or something as exhilarating as a night out at a rock climbing gym with friends depending on your tastes and interests.

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Pro tip: seek out experiential luxuries whenever possible as they don’t generate physical clutter that you’ll have to deal with down the road. The memories you’ll gain are much more valuable in the long run.

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4) Think big: now that you’re managing all your monthly expenses (including little luxuries) like a pro and have a solid emergency fund in place, it’s time to consider your long-term financial goals.

When you’re self-employed, saving for retirement is even more important than it is for your peers who participate in employer-sponsored retirement programs. Given that you don’t have the opportunity to participate in employer-based matching programs, you will need to be proactive and learn to not only save diligently toward your retirement fund, but also actively invest your money wisely to make it work for you. There are tons of great retirement-planning resources available online, but if you’re feeling overwhelmed at the prospect of managing your own retirement accounts, consider consulting with a local retirement specialist who can help get you on the right track. If you’re more concerned about meeting more immediate financial goals like purchasing a home or a new vehicle (or even that resort vacation), a financial planner will be able to help you adequately allocate funds for each important goal while still contributing to your retirement so that it can continue to grow as you meet your other major milestones.

Veitengruber Law can guide you through your NJ asset management needs as you get older; with advances in medical care extending life expectancies, you may be facing difficult choices over health care and your legacy. We also have close relationships with expert financial planners and NJ CPAs with whom we are happy to connect you.

Budgeting Basics

Creating a budget is certainly not a walk in the park. Budgeting is an ongoing process and for most people, your budget has the possibility of changing from month to month. Your first try won’t be perfect, but don’t get discouraged.  As with most things in life, the more you practice budgeting, the better you’ll get. Once you figure out a flexible and successful process that works for you, you’ll be ready to go! Before you start, make sure you have 30 to 45 minutes set aside to work through each step. Let’s get started!

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.

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 your “take home pay.” If you’re married, you’ll potentially be combining your incomes, so record them on the same budget.

Plenty of people are self-employed, which makes a budget all the more important. Your month-to-month income may be unpredictable depending on your business. If you have no reason to believe that your income will significantly drop in the upcoming month, average your monthly income for the last 3 months and use that for 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. Depending on your family’s spending lifestyle, do you need to add or delete any categories? Think about this before moving on to the next step.

Set Priorities

Maybe you have student loans to pay off or maybe you and your spouse have a baby on the way. No matter what situation you find yourself in, your budget health relies on how well you prioritize.

• Groceries: 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 it a bit depending on other expenses.
• 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. You tend to have slightly more leeway with your mortgage payment.
• Mortgage or Rent: Don’t put this off 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: You have to put gas in the car to get to work, and if you can’t get to work, well, you’re not going to need a budget. (This is not a good thing!) Pay the monthly car payment and keep some gas in the tank. Tip: Be smart about your trips or try carpooling.
• Clothing: You need to look appropriate at work and the kids need to be dressed for school, so if you’re only spending money on necessary clothing, that’s great! Don’t feel required to buy name brand clothing or accessories.

Once you’ve covered these 5 categories, you can move on to other sections of your budget that may vary from person to person. If you still have money left in your budget, you can include things like: Date Night, Cable, Family Entertainment, and other fun categories that should only be a part of your budget if you can afford to spend real money on them (not credit).

Final Touches

Many websites have free budgeting templates that will get you started. These make it pretty easy to figure out spending for monthly bills, since they don’t change much. You will have to make an estimate for gas and groceries. We suggest looking over your spending for those categories throughout the past couple of months and then finding an average. It doesn’t have to be perfect, but you do want the most accurate idea of where your money will need to go.

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, it’s a process 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.

Top Ten Money Saving Tips for Healthier Living

Cut coffee out of your budget (or at least brew it at home!)

If you have a daily caffeine habit you’d like to kick, let all the money you’ll save by cutting it out of your daily routine serve as an extra incentive to help you achieve that goal! However, if you are among the lucky folks who can enjoy coffee in moderation, there’s no need to deprive yourself even from a daily coffee habit. Just try to avoid coffee stands and restaurants where coffee is costly. Instead, consider investing in a home coffee machine like a cartridge coffee maker or an espresso maker, a reusable travel mug and even a milk frother if you prefer more gourmet-style drinks. These fancy gadgets can be more affordable than you think and will easily pay for themselves within a month or two if you’re a regular coffee drinker. Home coffee makers are convenient and easy to use, and reusing your own mug everyday also has a positive impact on reducing your carbon footprint to help protect the environment.

 

Clip online coupons from the convenience of your home computer

When people think about clipping coupons, it often sounds tedious to go through the newspaper and find relevant coupons each week. However, there are dozens of reputable websites online that offer both printable coupons that can be used in-store and coupon codes that can be used at online retailers. Anytime you’re about to make an online purchase, be sure to search your favorite coupon sites like Retail Me Not or Coupons.com to make sure you’re not eligible for any additional savings, a free gift or free shipping before committing to a purchase.

 

Seek out deep discounts at the grocery store

Did you know that every grocery store puts items on sale that aren’t even advertised in their weekly circular? That’s right! By knowing where to look you can save yourself even more money on your weekly grocery bill. If you’re looking for a dinner to cook the same night you shop, check out the butcher’s counter or the deli counter for discounted items that are close to their expiration date. There is absolutely nothing wrong with the reduced price food items, but they need to be prepared and consumed within a day or two in order to be guaranteed fresh. Many grocery stores also have a clearance section filled with pre-packaged, non-perishable and often seasonal items (think organic Easter candy!) they are closing out.

 

Cook and meal prep at home more to avoid buying lunches out

While eating out can be a fun experience to occasionally treat yourself to, eating out regularly can really dent your budget and your health! Even cheap fast food meals add up quickly, not to mention they aren’t the healthiest options with which to fuel your body. By always bringing a lunch and/or snacks to school or work you will be less likely to succumb to the temptation of eating out or pulling up to the drive-through window when hunger hits. Bringing lunch from home will save you a ton of money over the course of a year and even over the course of a month.

 

Cut back on trips to the salon by DIY

While treating yourself to an occasional trip to the salon should not be forbidden, try to limit the number of times you go to the salon every year. By purchasing a couple bottles of nail polish in your favorite colors and investing in a good quality nail file, with a little practice you can often achieve a salon-quality result at home. Recruit your best friend or significant other to trim your hair between salon haircuts. You can also successfully deep condition your own hair at home and even color your own hair at home for a fraction of the cost if you have a willing helper and a little patience.

 

Call your cable, internet and phone service providers to negotiate a discounted rate—whether you’re a new customer or not!

If you’re in the market to switch companies, now is the time to capitalize on the new customer discounts! Make sure to always inquire about their new customer rates any time you switch service providers. However, even if you’re an existing customer, it’s always worthwhile to call your providers periodically and ask them about any current promotions in your area and customer loyalty specials. You’d be surprised by the amount of money you can save just by asking.

 

Review your insurance policies

Call your insurance company to find out if you’re eligible for any multi-policy or multi-car discounts, non-commuter policies and safe driver discounts. If you have teenagers behind the wheel, ask if your insurance company offers a discounted rate for good grades. Your insurance company may also offer a discount for having extra safety features on your vehicle.

 

DIY your own all-natural cleaning products

Chemical cleaning products are not only expensive, they are also bad for your health! There are several inexpensive and effective alternatives that are much safer than most pre-made cleaning products you can buy at the store. Baking soda, vinegar and hydrogen peroxide are all extremely affordable cleaning staples that you likely already have on hand in your pantry or medicine cabinet that can be used as key ingredients to make multiple cleaning products (think window cleaner, dishwasher tablets, toilet cleaner, etc.) easily and at a fraction of the cost of what you would pay to purchase each product individually. There are many informative video tutorials available online that will walk you through how to make your own all-natural cleaning products from scratch. After you’re done making your own products, you will have a powerful, safe and effective arsenal of cleaning products at your disposal.

 

Use apps to find the lowest gas prices

There are so many free and inexpensive apps that can help consumers uncover extra savings nowadays, even on necessities like gas! Special gas tracker apps find the lowest prices in real time and even show you where the gas stations are located on a map. This is a great option if you live in or nearby a city with multiple gas stations to choose from. Prices are always changing, so be sure to check before you fill up your tank each time.

 

Try consignment shops for clothing—buy, sell and trade!

Consignment shops are a great way to save on high-quality, gently used and sometimes even never-been-worn clothing. Even if you’re not in the market to purchase any new clothes, consider consigning, trading or selling your gently used clothes to a consignment shop to earn some extra cash and clear some clutter out of your closet while you’re at it!

How To: Overcome Financial Stress and Get Your Finances in Order

Before the Great Recession, financial stress was the number one worry of over 70% of Americans. Since the Great Recession, money issues have become increasingly depressing for some people. With the loss of a job or a decrease in income, many people can have a prolonged stress that sits like a ton of bricks upon their shoulders. This chronic financial stress is extremely detrimental to the body, and you will begin to affect the lives of those around you. Before you know it, you may start to rely on bad habits to relieve your stress. How can you get a foot in the door of overcoming your financial stress and straightening out your money matters? Well, it obviously doesn’t happen overnight, but if you keep reading, you may gain some insight as to how you can begin.

Setting Goals. 

Though you can’t control all of your circumstances, you can initiate steps towards improving them. One of the most important first steps is setting a goal. This might sound simple, but that’s because it is! Before you can even think about your goals, you need to take a step back and review your finances. Doing this on a monthly basis could be beneficial for you, and don’t forget to check out your budget to know where exactly your money is being delegated.

Once you’ve had a chance to look over and get really familiar with your debts and income, set some goals. We are always setting goals in life – (financial, fitness, education, etc) and this goal is just like the others. It should have a purpose and a particular plan of action that will help you to attain the goal. Rather than setting a broad goal, attempt to set specific goals. Maybe your goal is to have $5,000 in your bank account within the next 2 months. You can break that broad goal down into smaller goals, like making yourself more valuable to your employer or improving your business plan. No matter the goal, review your financial state, set a goal, and clearly define the parameters and steps needed to reach it.

Make it measureable.

As covered in the last paragraph, clearly defined goals will be of more benefit. A goal such as “having a lot of money” does not have clear parameters. Some financial professionals suggest keeping 3-6 months of expenses in your bank account. Rather than setting a goal of “I want to always have 6 months of expenses in my account, sit down and put an actual value to that 6-month amount. This will focus your mind on a specific number instead of a vague sum.

Realistic and Reachable.

When you are setting your goal, it’s crucial to ensure that it’s one that you can actually attain. If you don’t have a good chance of reaching the goal, what was the point in setting it? Since you’ve already reviewed your finances and budget, you know whether or not a goal is realistic. If the goal is realistic, in your mind, you know that it’s attainable. Maybe your goal is adding $500 to your savings account each month. If you’re currently struggling to pay rent and have a low income, that goal may be a little out of reach. Work with what you have.

Deadline.

If you have no time limit on your goal, it might take you forever to reach it, which in turn makes setting the goal a waste of time. Part of defining a goal is listing a deadline so that you are able to separate your one big goal up into smaller chunks. Focusing on reaching your goal week to week can be mentally easier than seeing a huge number in front of you and stressing about how to climb that mountain.

Financial stress can take a toll on your mental, physical, and emotional state, which is why it’s so crucial to alleviate at least a small portion of that worry. Now that you have a few pieces of advice on how to overcome your financial stress, don’t wait until you find yourself in a desperate financial state. If you aren’t sure how to go about everything on your own, don’t hesitate to get in contact with a professional debt resolution/credit repair expert. They will be able to help you in setting a proper budget as well as raising your credit score and negotiating with any creditors to whom you may owe outstanding payments.