Wednesday, March 15, 2017

Saving for an Emergency Fund

If you currently have an emergency fund, how large is it?  What do you consider an emergency?  Food, shelter and medical attention are important.  What about a gift for a wedding or a shower?  How about school fundraisers?  All of these things should be closely monitored and considered when you are building up your emergency fund.  Do your kids need lessons after school every season?
What about your summer plans?  Can you do a stay cation?  How many animals does your family have or need?
One year we bought a generator,  It was the last one in stock and we did not have any electricity.  Did we sit down and say how much will this cost us per day?  Or did we snap it up feeling that if we would be without electricity too long we would need to pay for a hotel.
So many things come up that will prevent you from saving for your future. Outgrown clothes, a new shirt to take a yearbook photo, an expensive school field trip, a broken down car or a replacement water pump.
Let us break these items down into the necessities vs wants.
Necessities are similar to satisfiers and dissatifiers.  When you are satisfied with something you don't necessarily appreciate it but when you are dissatified you might complain.
My son needs a new dress shirt for his 8th grade photos.  True.  Is it a necessity, no.  Does he have a suitable dress shirt?  No because he outgrew it.  What happens when you go to the store?  Do you only buy a dress shirt or do you buy a matching tie and a suit.  How did a suit even come into the picture?  I would like to call it bargain shopping. A suit is on the radar for May and June events.  If the previous dress shirt purchased last year is too small chances are the previous suit is going to be on the smaller side also.
My oldest son is not too familiar with hammy downs while my youngest children often get hammy down toys and clothes.  This year one even got a hammy down back pack when theirs broke less than half way thru the year.
School trips might not always be expensive but some can definitely be on the pricier side.  A bus trip out of state with theater tickets, lunch and dinner is certainly on the more expensive side.
A school trip and a new shirt might be very small expenses compared to a broken down car, a generator or a water pump.  Some of these items can be saved up for so that you do not need to touch your emergency fund.  Chances are when your older car is inspected you will need certain things such as new tires, brakes, windshield wipers and various lights.  A generator might be needed only every few years for a short amount off time.  Can you make do without one?  For some a generator may be a necessity while for others it might just be a want.  Most things beyond food, shelter and medical treatment could be considered wants.  A third car may be a necessity for three drivers in a family and other families find ways to share the two or one cars that they own.
Good luck in determining your needs and wants in the upcoming months.

Picking a High School

Since my oldest is 14 it is time to select a high school.  There are many different options that people choose.  I find that most people decide on a public high school or some type of cyber school.  We did not exhaust all options but we did try to evaluate four different schools.  Choosing a high school can begin in 7th grade or earlier if they have lower grades.  Applications can vary on deadlines but be sure to check if there are discounts offered for applying early.
One thing that I would strongly suggest is taking practice entrance exams or even courses designed to help with learning how to take the exams.
Good luck with your endeavors.

Friday, May 20, 2016

Summer Expenses

Do your summer expenses normally go up or down during the summer?  Ours would normally go up slightly due to a summer vacation.  Sometimes activities are stopped for summer and replaced by camp fees.  Part of our summer expenses include a pool membership, swim team, swim team bathing suits, pictures and snacks at meets.  Maybe your food bill can go down if you don't need to buy individual snacks for lunches.  Every bit helps.  The swim club we belong to does not have a place to sell food day to day.  This is probably better but the ice cream truck does come around to try to entice everyone to buy something.  I could bring a snack similar to something that the children would buy at the ice cream truck to try to save some money that way.
I am finding out that my children don't have all the memories of the vacations that I had hoped.  Our son asked if he had ever been to a particular state.  Yes, we took a vacation in the state he mentioned but he was only 4 years old.  I personally do not have any memories prior to age 4 or 5 in my own life.
It is okay to have down time during the summer break.  Every moment does not need to be scheduled.  I have noticed that some places have discounts during the week even though it is summer.  That could be advantageous in multiple ways.  First is the discount and second is the place may be less crowded.
You can pace yourself and not do everything in the same summer.  There is an Aqua Park that looks to be fun but some of our children were probably too young to go in the past.  The best way to go would be on the discounted days even if that means a scheduled day off from work.  Many times earlier in the day or later in the day are the best times to avoid crowds.  Some places offer free or discounted twilight prices.  I have also seen pay what you wish for museum admissions.  
Whatever you do or don't do this summer, there is always next year.  Check out when the best sales are so you can plan for a certain time or destination.  Enjoy!

Thursday, April 14, 2016

Balance Transfer Checks

Recently we took notice of balance transfer checks. These offers to add to your credit card debt may appear tempting.
Here are a few items to take note of in the rules.

Interest will accrue on new credit card purchases (that are not at 0%) if your balance is not paid in full by the due date. I had seen a recommendation not to use the credit card at all if you are using the card for a balance transfer.

Minimum payments may go to pay off the lowest interest rate including 0%. Some of the companies may apply the money beyond the minimum payment to the highest interest rates first.

When you transfer a balance to a credit card it may not have the normal air miles and rewards.

I was surprised to learn that you can also deposit these balance transfer checks into the bank rather then just using them to pay off another credit card to get a lower rate. Assuming you were willing to get bogged down with using a credit card at all this could sound appealing. I can see many uses where this could come in very handy. The trick would be not to use the card for anything else until it is paid off.

Do the companies send these offers to you when you have a balance on the card or is it just a tool to draw in new business when you are not charging to the existing credit card anymore?

Good luck with your financial future!

Wednesday, April 13, 2016

When Uncle Sam Comes A Knocking...

Did you ever get a rude awaking at tax time?  Ever get a bill bigger than you can handle?
What are your options to pay it?  I will cover one.
A Personal Loan
The quotes will vary based on the lending institution, based on your credit, possibly whether you have an existing financial relationship with them and if you will use the automatic debit feature.

The range of interest rates could span a number of percentage points.  It is best to contact a number of different places.  It is also a good idea to do your homework before you make any final decisions.  Can you finance less money and for a shorter amount of time?
Some lending institutions use the same interest rate regardless of whether you take the loan out for one, two or three years.  That is a surprise to me.  I would have expected to be quoted a lower rate for taking out a loan for one year than for three years.

Here are some helpful tools to help you do your homework.  Knowing the terms of the loan before you walk in the door to sign a contract are key.  You don't want to jump on a loan that you are unsure if the terms are what you need.

401K Cost Calculator for early withdrawal
The 401K Cost Calculator is helpful as more companies are shutting their doors and/or offering their employees their retirement savings early.

Personal Loan Calculator

The personal loan calculator will help you determine what your payment will be as well as how long the loan will take to pay off if you make additional payments.

Hopefully you will not be in need of a loan come tax time.

Thursday, December 3, 2015

Spending More Than You Make?

Is the reason that you like a certain day of the week because it is payday?  Our payday is twice a week on Friday.  Today I plan to stay home and not spend any money.  Why because tomorrow I can pay cash for things.  Today I can pay cash for items but it would be from savings and not from a new paycheck.
What percentage of what you make goes to each category?  What is the normal amount?  Are you higher or lower than you would like?  Are there things you care less about that you can chip away at from a particular category.

Our pending decision is whether to take the company offered medical plan or to pick up coverage on our own.  This was our first year with an HMO.  In prior years PPOs were the selections for the companies that employed my husband.  PPOs enable you to go to in network providers without having a referral.  Referrals now tend to be on a central database and take limited amount of time to set up.  Referrals were not as much of an inconvenience as they could have been.

Do you tighten your wallet when you have less money and tend to be more free with money when you more of it in your possession?  Last October we needed a new dishwasher.  We did not have the money saved up for it but went ahead and put it on credit.  This past month we wanted new chairs for the living room.  We had the money and paid cash for them.  We paid cash for them is key but did we budget to get them or were the chairs an unbudgeted item?  I would say they were an unbudgeted item.  When we first bought a house we had a goal of getting a dining room set. We had a picture of the set on the refrigerator waiting for the day when we could afford the dining room set.

When I look towards tomorrow do I run right out and shop for more chairs?  Probably not.  We do want to get seating for 7 and currently we have three new chairs.  We plan on buying two more adult chairs and two
 additional chairs for teenagers.  I have an idea of what I want or could use.  The teenagers have an idea of what they want.  Their chairs cost about 60 apiece while the adult chairs will be about 250 a piece.

Since it is December we will have added expenses related to Christmas presents and additional food for the holidays.  We have extended family that we can buy presents to mail away.  This is always optional.  We are hit or miss whether we do it or not.  Last year we did not have gifts for everyone that we visited on Christmas.  It worked out okay but I wished I did have something available to give to them especially since we received unexpected presents from them.  This year we can be prepared but I am really thinking of tokens of appreciation in the form of artwork or cookies rather than a retail type gift.

We also need to keep our eye on the prize.  No debt in January is one.  Four more seats for the living room is another.  Food in the refrigerator is a good one.  Gas in the car and oil in the furnace are good choices also.  Everyday we are faced with choices on how to spend our money.  Do we pack a lunch the night before or do we write a check for our child's lunch account?  Today I wrote two checks for lunch accounts.  The other day I handed over $20 in cash to fund another lunch account.  My oldest son says he would need about $5 or 6 dollars a day to eat in the cafeteria.  My youngest sons are capped at about $3 per day and they can get a good amount of food.  One problem with bringing the extra food into the house is that it does not get saved for lunch but random snacking.  While reviewing the school calendar there are 15 school days in December. The students that need $5 a day for lunch would be spending $75 for December.  Considering we have 5 children that number is going to add up fast.

Do you participate in all the holiday gift giving?  We do every year.  In the past I have thought it would be good to celebrate Christmas every two years.  This year I have watched so many Christmas movies that it is looking like visiting friends and family is what should be taking advantage of during the holiday season.  It is not so much the present that is important but being present to share your time with others.

When we bought the chairs with cash we might have used unbudgeted dollars but we did not use credit.  The problem came later in the month when rather than use the existing paycheck to pay for the lunch accounts we used savings.  While it could be argued that funding the lunch accounts were necessary they were still unbudgeted.  It is fairly easy to make up a budget.  The hard part is sticking to the budget and saying no to the things or events that are not in the budget.

We have a goal of not using credit for this holiday season.  Done.  We shredded the credit already.  The next goal is to live within our means.

Monday, June 15, 2015

Shred the Credit

In the past we were debt free except for a mortgage.  Now we need to struggle to get back to that comfortable position.  What lead up to the making less than you spend and needing to rely on credit?  Loss of a job, give birth to twins, rely on additional income that is not an annual occurrence, medical plan changes, middle age, children involved in more organized activities, expanding family means larger home, larger grocery bills, more expensive healthcare plans and more expensive utilities.
Our home
1998 we moved to our first home.  In 2008 we moved to our 2nd home. In 2009 we sold our first home.  In 2009 we had twins.  In 2012 my husband changed jobs. In 2013 he was laid off from the new job.  Two months later he had a new job.  During this time we started charging items but not paying off the balance because there was a promotional 0% interest rate.  After the lay off I think we were unsure how long the lay off would last and did not focus on paying down our credit card prior to our interest rate going up.
Now in 2015 we are trying to get back on track.  We did this once before.  In 2005 we had just bought and leased two cars and no other debt.  In 2008 we were on our way to paying off our first house in approximately four years.  Our cars were paid off and we were handling our financial donations very well.
The problem was we were still relying on our credit cards to pay our extra expenses.  Today we shredded our credit cards.  No fan fare just a simple shredding.
My husband asked that we use cash and debit card exclusively so we have no need for a credit card.  I have thought of one instance where it could be a problem.  That would be an unmanned gas station and all that you have is cash.  I guess we will need to get all our gas during daylight hours.