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 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.

 

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!

4 Ways to Start Building Your Savings

how to build your savings

For a lot of people, the idea of having any money to save can be laughable. When you’re working paycheck to paycheck and struggling to make ends meet, it might seem impossible to put any amount of income away for the future. After all, what is the point of saving $5? But saving any amount of money is worth it. Studies have shown that having even $500 in savings can help immensely in the event of an emergency. So while the standard advice for a savings goal is six months of living expenses, every little bit helps. If you are new to saving money, or recently had your savings drained, here are a few ways to build your savings account or emergency fund.

1. Pay Yourself First

Whether you are building your savings account for a big purchase, to fulfill a life goal, or for retirement, the best way to achieve your savings goals is to pay yourself first. A lot of people make the mistake of trying to save the money they have left over at the end of the month—and often find they don’t have any money to put towards their savings accounts. Before you have the chance to spend the money on anything else, put it into a designated savings account.

In order to make sure you pay yourself first, you must get a good handle on your budget. If you can determine what your income and expenses are, you will have a better idea of how much money you can safely put towards savings every month. A budget will allow you to be realistic about your savings goals, while also curbing your excess spending. For example, if you notice you are spending a lot of money eating out, make an effort to cook at home more often and then put the extra money into savings. Every little bit does matter! When creating your budget, make savings the ultimate goal and allow your spending choices to reflect that goal.

2. Make Building Your Savings a Habit

Another good way to build your savings is to make it a habit. It matters less how much you are saving each month; it’s more important that you are consistently depositing money into your savings account. A great way to do this is to set up an automatic deposit. Most banks will let you automatically deposit a set amount of money from your checking account into your savings account on a specific day of your choice. The first few days after pay day is a good automatic deposit day. With automatic deposits, you may not even notice the money is missing from your checking account in the first place. As this “habit” will largely go unnoticed, making it a very easy way to save!

3. Look for Sneaky Ways to Save Even More Money

After you have been saving for a while, you will have a good idea of your income, expenses, and budget. At that point, you should critically examine your spending to see where you could eliminate expenses in order to allocate even more of your income to savings. It is always a good idea to put “extra money,” like bonuses or tax refunds, into your savings. Make sure you are taking full advantage of your employee benefits. If your employer offers transportation reimbursement, matching retirement savings plans, or insurance, you can save money by taking advantage of these benefits. If you are job searching, look for employers who can help you achieve your financial goals.

4. Create a Separate Emergency Account

Once you have an established savings account, it might be a good idea to consider a separate savings account labeled as an emergency fund. Having an emergency fund that is separate from your savings account can ensure that even when facing an unfortunate financial event, you won’t lose all of your savings in the process. With a savings account and an emergency fund, you can plan for unforeseen medical expenses or an unexpected car repair while still putting money away for your future.

Saving money can give you peace of mind and a sense of financial security. Knowing you have the financial resources to get through some of life’s many hurdles is a powerful feeling. Every dollar you put into savings is an investment in your financial future. Everyone has to start somewhere, so start saving today!

10 Clever Ways to Save Money in the New Year

save money in 2019

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.

9 Smart Money New Year’s Resolutions for 2019

money new year's resolutions

Everyone looks forward to the New Year as a fresh start. This year, use your New Year’s Resolutions to benefit your wallet! From big goals to small changes, these 9 tips can get your finances on track in 2019:

 

  1. Eliminate/Reduce Credit Card Debt

If your credit card debt has gotten out of control in 2018, plan to make paying down your credit card balances a priority in 2019. With the Federal Reserve likely to increase interest rates this year, credit card debt is only going to become more expensive. Set a specific goal for yourself, (for example:  pay down 25% of your current debt). Focus on paying down the debt under the highest interest first to avoid income-draining interest rates. If you are struggling to make credit card payments, do not hesitate to reach out for help from Veitengruber Law.

 

  1. Pay Down Student Loans

For a lot of people, student loan debt is a heavy financial burden. It’s a great idea to take 2019 as an opportunity to make a huge dent in your student loans. Start by reviewing your loans and determining which ones have the highest interest rates. Making extra payments on those loans will save you money on interest in the long run. Paying more than the minimum due each month is also a great way to make sure you are not spending more than you should on interest. If your interest rates are high or you have a lot of different loans, consolidating your loans may allow you to get a lower interest rate and create more manageable monthly payments.

 

  1. Emergency Fund

In 2018, 39% of Americans paid for an unexpected $1,000 expense with their savings.* Many Americans end up in debt trying to cover unexpected costs. Most experts recommend having at least six months’ worth of expenses in savings, but if you are starting an emergency fund from scratch, make your goal something you think is reasonable to achieve. Even having a few hundred dollars in savings is better than nothing. You may want to consider setting up automatic transfers from your paycheck into a savings account so you are not tempted to spend this money.

 

  1. Improve Your Credit Score

The first step to improving your credit score is to know what it is in the first place. Signing up for free and reliable credit score monitoring through services like Experian or Mint will help you see how healthy your credit score is now. Good credit scores range from 700-749 and scores of 750 and higher are considered excellent. If your credit is not where you want it to be, make raising it your priority in 2019. Small things like paying your bills on time, keeping credit card balances low, and setting up automatic payments right after you’ve gotten paid can help reduce your debt and improve your score.

 

  1. Do Taxes Early

Filing for your federal income tax returns as soon as you can is a great way to start the New Year. Not only will you get your refund faster, it can give you extra time to pay taxes you may owe or help you avoid needing a tax extension. If you are expecting a big life change in 2019—like returning to college or buying a home—filing early will help you get a head start on this paperwork. For instance, students can use the information on their 1040 form to apply for financial aid. Plus, the sooner you apply for your refund, the less likely it is that you will be the victim of tax return identity theft.

 

  1. Cook More

Americans spend thousands of dollars a year eating out. A big way to save money in 2019 is to spend less time eating out and more time making your own food. Use 2019 as a chance to get more comfortable in the kitchen. Bring lunch from home, meal prep on the weekends, and spend some time researching quick-to-make meals. The more frequently you eat food bought from the grocery store, the less money you will spend—and the healthier you will be, too!

 

  1. Retirement Savings Plan

It is important to start saving for retirement as soon as possible. There are many options for creating a savings plan for retirement and you can determine which one is best for your specific circumstances. Maybe your employer provides a 401(k) plan, but if not – you can open an IRA or, if you are self-employed, a Simplified Employee Pension IRA. If you already have a retirement plan in action, reassess the plan in 2019. Could you be saving more? Are you on track for retirement?

 

  1. Home Improvements

While some home improvement projects will cost big and add value to your home, sometimes it’s the small projects that can have a big impact on your finances. Investing in energy-saving appliances in 2019 could allow you to save money every month on energy costs.  Energystar.gov has recommendations for energy efficient products and other home improvement ideas to get you thinking about ways you can save money on energy this New Year.

 

  1. Focus on Your Health

The average American spends over $4,000 a year on health care. Make your health a priority in 2019! Join the gym, focus on eating well, and take the time you need to relax. Go to the doctor at the first sign of illness instead of waiting until your health has been severely diminished. Preventative healthcare measures can save you big in the long run.

 

 

 

*From Bankrate

Budgeting in Retirement: Living Well in Your Golden Years

budgeting in retirement

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!

8 Ways You are Wasting Money (and How to Stop)

money management

Some money saving tips seem obvious, like cutting back on eating out and sticking to a realistic budget. But there may be some things you are wasting money on without even realizing it. Being a smart consumer means looking at all of your expenses critically—even the little things. These are some common ways people waste money without even realizing it:

 

  1. Shopping Brand Name

This goes for everything from designer clothes to grocery items to pharmaceuticals. If you insist on buying only brand name items, you’re definitely overspending. Instead, look at the quality, function, and value of an item. For groceries and pharmaceuticals especially, the generic item is likely to contain the same exact ingredients as the name brand, but will cost you a fraction of the price. Don’t get hung up on big names; it will make a huge difference in your wallet.

 

  1. Overpaying on Car Insurance

Car insurance is a necessity, but taking the time to shop around and compare rates once a year can save you big. When it comes to car insurance, you can’t assume any one company is the cheapest. Different people will pay different prices for the same coverage which is why you have to shop around to make sure you’re getting the best deal for you. Check for discounts you may qualify for and make sure you’re getting coverage that makes sense for your car.

 

  1. Paying for Cable

There are dozens of movie streaming services and non-cable TV options on the market today—and those services are always growing. Almost any streaming service is cheaper than cable or dish and you have the added bonus of paying for exactly what you want. You can build a package catered to your interests instead of having to pay for extra channels you never use.

 

  1. Keeping Electronics Plugged In

Saving money on energy goes beyond turning lights off when you leave a room. You would be shocked at how much energy waste you produce just from leaving devices plugged in. Some electronic devices, like computers, DVD players, and even microwaves will use power even when they’re not in use. You can calculate what these devices are costing you using this tool from Duke Energy. Keeping these devices unplugged can save you money on your electric bill.

 

  1. Piling on Credit Card Debt

If you use your credit card to pay for most things, it’s a lot easier to spend outside your budget unless you are vigilant. Credit card debt can add up quickly if you aren’t keeping up with your monthly payments. If you fall behind, you may find yourself spending so much money on interest that you can never catch up enough to pay off the actual balance. Don’t ignore potentially crushing interest rates. Be proactive by looking into consolidating or refinancing debt.

 

  1. Spending Too Much on Gas

Overpaying on gas can really hurt your everyday budget. Pay attention to changing prices and shop around for the cheapest gas station in your area instead of just going to the closest one. You can even go a step further by earning rebates on gas purchases. Some credit cards will net you 5% cash back when you buy gasoline. Shopping with certain stores can help you get gas discounts, too. Giant, for example, will help you save 10 cents per gallon for every 100 points you earn at Giant grocery stores.

 

  1. Overpaying Monthly Bills

Just like with car insurance, reviewing the amount you pay for your cable, internet, or cell phone provider is essential to making sure you’re getting the best deal. Some companies rope you in with discounts and monthly credits that expire after your first few months paying for the service. Don’t let that be the final word on your monthly payment. A lot of the time, if you call your provider to discuss a payment increase, they will work with you to keep your business.

 

  1. Not Earning Cash Back When You Shop

There are dozens of apps out there that give shoppers money back for their purchases. Some apps will pay you for scanning your receipts from specific stores while others will give you cash back on individual items. Ibotta and Fetch Rewards give you cash back for scanning your grocery and retail receipts. Ebates and Shopkick give you cash back on specific items from qualifying retailers. A lot of these apps have cash sign-up bonuses. Using cash-back apps is a great way to earn a little money back when you shop.

 

All of these little ways to save money can add up big time in the end. Taking advantage of new technology and competitive pricing will give you more financial power as a consumer. Use these tips and start saving today!

10 Easy Ways to Improve Your Finances

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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

  1. 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.