Is this really a good idea?

Living for today is always a good thing. If we cannot live for the time that we are actually living and instead live in another moment, whether it is the future or the past, then we are not truly living. However, only living for the present moment is not a good thing either. It has been stated (I forget where) that most people truly do not think beyond two or three days in the future. And this is also why people don’t truly make long term goals, for the most part. And perhaps it’s also why budget planning is not a big part of what we learn growing up.

It is important that we learn to handle our money. If we spent everything as we got it, truly only living for the moment, then there would never be anything available for the longer term expenses, even including housing, insurance, and groceries. Never mind what such a thing would do to emergency planning and retirement. While 75% of Americans surveyed stated that they have saved for retirement, only 13% are very confident that they will actually have enough to retire comfortably. And only 44% have actually done any kind of retirement needs calculation.

Perhaps it’s a good idea to actually make some plans for the future. Without planning and knowing how one is going to handle crisis, retirement, and upcoming large expenses, then there is no way that one can know exactly how much is required for these expenses. Sitting down and doing some kind of estimate, even a rough one, would make planning a lot easier. Realistic returns need to be taken into account on all savings, as well. This can give a sense of hope and security. And it might surprise people how little they actually need to retire. I’ve figured mine out. And in today’s dollars, assuming that I have no consumer debt, and that my kids are grown up, I can survive on less than $500,000 dollars in savings. In fact, that may even be high, especially if my taxes are low, or if I decide that I want to work part time. Actually, I know that I will do some income producing activity. It’s just the way I am and I will do it to keep myself occupied and happy, doing writing, consulting, teaching, or artwork of some form.

Planning for the future also allows one to live a better life today. With solid future plans, written goals and knowing how to accomplish them, one then has more security in the present. It’s easier to plan for the day when one knows exactly how much money is available for the present, allowing for all other plans. This makes living for today all that much better!

It isn’t always easy to make sure that you have everything for a vacation, even a small weekend trip. There’s the list of everything that has to be taken along: there’s the allowing for fuel, car maintenance, food, and a small emergency fund. It can be quite hectic, and the plan can actually take a lot more than is always anticipated. Here are a few things that should (almost) always be included in any weekend trip. Make sure to budget in advance for each item that you have to pay for, so there are no problems down the road!

1. Fuel. This is the most obvious if you are taking a car trip. If you know your car’s mileage, then you are likely to be able to budget this fairly accurately. Also make sure that the car’s maintenance, such as oil change, transmission fluid, etc. is all up to date. And check your tires before you go out onto the highway! Don’t forget to check the spare.
2. Food. This can get more costly depending on where you’re going and what you’re doing. Eating in restaurants is always more expensive. A tip is to pack a cooler and put whatever you can in there, that way food expenses are minimized and the money can be better used elsewhere. Make sure to plan every meal, and include a few extra snacks; you never know. And don’t forget about drinks!
3. Changes of Clothes. These are something that men are more likely to forget than women. Is that a gender or cultural thing? Think of every event and place you want to visit, as well as the number of days. Make sure you have the right number and style of outfits. This is a great boon to already have what you need. If you’re going rafting or swimming, bring appropriate clothing. Same for dining out. And take an extra change of casual clothes, just in case. If you have to buy anything for the trip, plan it well in advance, that way you can make sure to spend less by getting it at a sale.
4. First Aid Kit. While this isn’t mandatory, and hopefully you will never have to use it, having a first aid kit is a good idea. You just never know. There are lots of small kits available just to store in a car. And sometimes these are on sale. Maybe even just have a look at the items in a kit and put together your own. You never know, it might be cheaper that way.
5. Entertainment Money. Is that the whole point of the trip? Unless it’s a family visit (or maybe because) you will need to plan and budget the entertainment events for the trip. Make sure to allow sufficient funds for this, or plan the events around how much you can realistically afford to spend. This is one area that a lot of people go overboard, so being aware of it and the budget ahead of time is the best way to avoid going overboard. This is called actively managing your budget.

A tip for entertainment is to take along some games. Even a ball or Frisbee can make a lot of time pass and be great entertainment! Take some cards. Take a couple board games. Take some horse shoes or lawn darts. Whatever games you and those you are with will enjoy. Brainstorm to see what everyone can do in the few hours of downtime that you might have. You might be surprised at what inexpensive ideas there are.

People spend money on the most amazing things! Items that add no use or value to life, yet they will waste precious dollars on them, when those dollars could be used for more precious and lasting items, things that actually contribute to their lives. Here is my list of several of these things.

1. Knick knacks. These are the decorative items that are cheap, put onto shelves and walls for decoration, but have little true aesthetic value, and are often thrown away or junked after a couple of years, because you just get more knick-knacks to take their place. A complete waste of time and money. Whoever invented this crap was a genius, because he parted people from their good money and sold them something worthless. Don’t buy these!
2. Rice cookers. Rice cooks fine in a pot or even in the microwave (if you know how, so I’ve heard. I don’t know how.). Why buy a special pot just to cook one thing? Slow cookers are not to be confused with rice cookers. While similar, they aren’t exactly the same. And a slow cooker can be used for rice as well as many other foods!
3. Flower bouquets. I know this on is contentious. What person doesn’t like to receive flowers as a gift, simply because it shows that someone really cares? But aren’t there better things that someone can give? I think it’s a waste of time to buy something that is only going to get thrown away a few days later, because it dies. If I buy someone flowers, I’d rather buy a potted one, because at least that has a chance of lasting a while!
4. Happy Meal Toys. Yes, the kids love these. But they really are junk. They’re not meant to last, and the kids end up losing them or breaking them in a week or two. They don’t last long at all, and kids tend to have enough toys anyhow. Just don’t bother with this crap. Actually, I think Happy Meals are a waste of money, too. If you must eat at McDonald’s have a look at the bargain menu. You can get more from that, and it’ll cost less. I admit that I will occasionally take my kids there for a treat. And even I will buy 2 of the bargain chicken sandwiches, which fills me right up and costs less than one regular burger or chicken sandwich.
5. Directory Assistance. Bet you didn’t expect to see that one here! Directory assistance costs (where I am) 75 cents just for one look up. I get a phone book for free. And when I’m out somewhere and need a number, there is usually a phone book within a very short distance of where I am. And if I have a smart phone I can probably look up the number for free on the internet. Unless I’m making over $45 per hour after taxes, it’s worth my time to spend the extra minute looking the number up myself. After all, that’s how much I’m actually paying for the service!
6. Taxi Cabs. Well, this isn’t always the case. But a lot of people use these for simple trips when it would be more economical to use other modes of transportation. Taxis should only be used when they are the most practical and economical mode of transportation under the circumstances. A good time to use them is when you know you are going to a party and will be imbibing more than makes it safe to drive. That way you have the safety of the taxi to get you home alive and well. Any other time is a waste of money, unless it truly is an emergency that you need to get somewhere fast! And the only thing I can think of then is if your job is on the line.
7. Magazine subscriptions. Another thing that people will spend money on and not really use. Most of these just languish in a pile and eventually get thrown out. Even newspaper subscriptions are rarely utilised by most people. We just don’t have the time to read them any more. And when we do, they are available on the internet for less (even a subscription to your favourite online magazine usually costs less than the paper version). Not only is such a subscription a waste of money, it’s a waste of the environment. Go digital. [The only magazines I get are kids magazines, Chickadee and Owl, because my kids actually read them and enjoy them.]
8. Cable TV. I know, I know…. It’s cheaper than going out to the movies and renting videos. This one is controversial, as it’s something that a lot of people really do use for entertainment. I admit that I have it, but only because of my roommate. He’s an addict, and it was agreed as part of his rent. There are so many other things that you can do with your time, things that are more productive, fun, healthy, entertaining, and overall better for you. The only reason I own a TV is to watch movies. And those I borrow from friends, library, and relatives. And occasionally watch on TV. Cable is almost completely unnecessary.
9. Bargain DVDs. Well, not always. But unless you’re going to watch it repeatedly, there really isn’t any point in buying a DVD in the first place! I’ll buy these for the kids, because I know they’ll watch them over and over again. But do I really need to buy some cool movie in order to watch it? Better to wait until it’s out on TV. And even then I’m likely to have watched it at a friend’s place first. Or my roommate will rent it. Then I’ll borrow it from him. Or the library will get a copy. Yes, I like the library – free movies, books and music! (Although I rarely borrow music from the library – I’m happy with the radio for the most part. We have some great local stations, and I listen through the internet, too).
10. Candy. Okay, a lot of people might hate me for saying this. Most candy is nothing but sugar. It has no nutritional value whatsoever. It’s empty calories and is just plain bad for you! If you’re hungry, eat something useful. The occasional bit of chocolate, pudding, cake, pie or ice cream won’t hurt, but eating foods that are almost pure sugar is just a waste of money and hurts you more than anything else. Don’t do it!

I know that there are a lot of things that I could add to this list. How about you? What are a few things that you think are a complete waste of money? What would you add to the list? Do you agree or disagree with what I say above?

“Insanity: doing the same thing over and over again and expecting different results.”
-Albert Einstein

This reminds me of someone I know… me. I keep expecting someone I know to learn how to deal with finances in a better way, but it doesn’t happen. No matter how much I urge or hint or try to help, it never helps. I only get resistance and anger. And then I get an earful of complaints about money and requests for help. And the “help” that is wanted is “loans” of money that will never be repaid – these end up being simply gifts.

Well, don’t let it happen to you! No, I don’t give this person money any more. But the requests for help of that kind keep coming. I doubt that I’ll ever see any of the dollars I have loaned. And there will be continual disputes about that. Don’t ever let it happen to you!

When you are loaning money to a relative or friend, make sure that you have the loan agreement in writing. I know that may sound harsh, but friends and relatives are often the worst for not paying back. Partially that is because they don’t feel the obligation to pay back on time, because they know that they are on a friendly basis. There is no urgency, because in their mind it is not like a bank or business loan. It is just between you and them. So it’s not as important. Putting it in writing expresses that it is important!

Another good idea to give incentive to pay back the loan is to have some kind of interest charge on the loan. This means that whomever you loaned the money to will have to pay back more than was borrowed. The only reason that you have this interest there is to provide that extra incentive to pay it back. Make sure this is in the written agreement! Another idea might be to only have interest charged if it isn’t paid back by a certain date. Or you can simply give the interest back to the person once it’s all repaid. But don’t ever tell them ahead of time that you intend to do that! That takes the incentive away. There are too many problems with getting your money from relatives, and having a proper agreement in place really can make a difference.

Some things you should make sure are in the agreement:

• How much the loan is for.
• Who to – include full contact information (address, etc.).
• Who from – again include full contact information.
• The repayment terms. Include how much, how often, and any penalties on missed payments.
• The interest rate charged and how often it will be compounded (or if it is simple interest, state so).
• What happens if the loan isn’t repaid. There can be penalties in terms of interest; you can register the loan against property (home, furniture, vehicle, etc.) for late payments or unpaid balances. You may even have the option of taking the person to court (although that can really hurt personal relationships).
• Any other provisions that you both agree on (and that are enforceable by law – you can’t promise things that would otherwise be illegal or unenforceable).

Remember that while you may be relatives, and be close and loving, you aren’t a bank or lending institution to be exploited. Yes, love money can be useful. But it must also be protected. Take care of yourself, too!

To quote someone from a long time ago, “If I am only for myself what am I? If I am not for me, who will be?” (Hillel, ca. 60 BCE – 20 CE)

This means that you must be generous, but also within reason. Don’t be taken advantage of.

In order to have a perfect budget and make it work really well, it is ideal to keep track of all expenses and income. Here are a few ideas on how to more easily keep track expenses.

There are several methods that people use to track expenses, some very refined, some rather loose. The better budget is, of course, going to be that which is most refined. In order to keep it refined, there are some easy ways to track these expenses. It doesn’t have to be difficult. And once the system is set up, it’s rather easy to keep going – pretty much forever!

Some people will take an entire category of entertainment and lump everything that is done under that category together. They won’t know if they are spending money on movies, eating out, billiards, beer, or whatever. It’s better to track the types of expense, and exactly what it was that was bought than to simply categorize like this. An easy way of doing this is to keep a small note pad, one that will fit in a shirt or pants pocket, with you at all times. This way it’s very simple to write down what was bought. I use this every day and always have the pad with me. An added advantage to this is that I can also use the pad to write myself notes that will help make my day more efficient, such as when I remember that I need a specific grocery item (I keep a running list in the pad for the bi-weekly shopping trip). And I use the pad for writing down ideas. For example, I tend to have about a week’s worth of blog post / article ideas written in the pad. This really helps keep me organized! And then I never forget anything.
When I do my weekly budget update I simply take the pad and input the numbers that are in there into my spreadsheet to see if I am

keeping within the limits I have set myself. I rarely go over in any category any more, but that is because I have my budget down to such a science from the past 18 months of doing it this way that it’s easy to know exactly how much I have available in each category. Oh, another tip with the little pad is that I actually keep a list of how much I have to spend in each category. For example, my next grocery trip is limited to $200. I also track how much each item costs that I am buying, so that I can compare to the next grocery store or trip that I take to this one. I also know how much I can spend on entertainment, auto expenses, and so-forth.

And my pad also helps me to keep track of upcoming expenses that I otherwise would have forgotten about in my budget, such as the upcoming maintenance that I am going to have to do on my car – and it’s a pain to deal with that if you forget! Gotta watch that transmission fluid.

Oh, just to be clear, I work from both sides of the pad, just to make it easier to know where I am and what I’m doing. Give it a try! I would bet it helps.

I admit that I try to live more frugal than most people. I rarely go out. And when I do I always make sure that it’s on a discount, using coupons or sales events, or attending a free event. But I always make sure that I have fun!

My number one rule to living frugally is to think about anything I buy before hand and see if it is truly necessary. This is constantly a battle with my kids, as they are too young to understand, and they have some strong influences from elsewhere that tend to spoil them a little bit (and I admit that I’ve been guilty of that myself at times). But I think that’s what grandparents are for and try to emphasize that we don’t buy too many toys or other things.

Now I’m not just talking about what is necessary to survive. If that were the case, I could live in a shelter in the woods and make and grow everything I needed. Hey, I used to actually think about doing that when I was a kid! But I have other priorities in my life than mere survival – I want to enjoy life, too. So what do I need to do that?

This requires a lot of self understanding, as well as it took a few paradigm shifts for me. Hey, I love my toys – but most of them are useless and don’t really get used after a few weeks or months. So that’s one habit that I stopped, for example. Now if I buy something for entertainment or hobby, it’s going to be something that I will use for months, if not several years. Otherwise it’s just not worth it.

Food is another area that changed greatly for me. I used to eat out at least three times a week. This could be a lunch at work, or even a nice dinner with someone special or a dinner at the pub with friends. Now I rarely eat out. It isn’t really worth the money, and when I do things like go to the pub with friends I limit what I buy a lot more than I once would have.

I also used to have a HUGE chocolate addiction. I would eat at least one bar a day, plus drink at least a litre (quart) of chocolate milk every day. Now I can hardly remember the last time I ate a whole bar in one sitting. And it’s actually rare that I eat it. I still buy chocolate milk, but not so often. And I drink  a lot less at once than I used to.

I have also examined how I shop for groceries. This is a lot different than I once did. I admit that I have a bit of a head start on most people, since I spent 15 years without ever eating red meats (these are expensive), and even a while where I was completely vegetarian. So, for me eating with less meat was easy.

I worry more now about the people in my life than I do about the things. I used to think it was really important to have a nice house that was really big. I wanted a beautiful car (actually a nice, new minivan or station wagon is what I wanted. The Volvo station wagon is what I’ve always drooled over). And I wanted the nicest clothes. Now I don’t think that’s the case. All I need in a car is something that really works and gets me where I want to go, but is still big enough for me and the kids. And that’s cool by me!

So, living frugally is a matter of examining what is truly necessary in your life. Perhaps you absolutely need a big SUV to be happy. Or do you? It might require a paradigm shift or two to really understand what is required in life to be happy.

What helped me a lot was not only the situation I got myself into, but reading other people’s stuff. One of these was Leo Babauta’s books. I read those mostly through his website, but it’s a lot easier (and won’t take you the months that it took me) if you get his books. It’s pretty much more detailed on the kinds of things that I wrote about above. Learning to simplify and organize your life in a way that makes it less stressful and more balanced. This is something that I think almost everybody could benefit from.

And I love being frugal! It’s amazing how little I can get by on, if I have to, and I still have a great, happy life! Most people I meet are so grumpy about the things in their lives. And that’s the whole problem – things – we need to have more simple lives and less focus on things. Follow the number one rule of frugality – examine if it’s really necessary. And temper that with the number two rule – put those you love before everything else, especially things!

Assigning the Objectives

What’s an objective? Well that’s the mini-goal that you want in order to meet you bigger financial goals. For example, you might have goal to get 3 months of savings in the bank so that you stop living from pay-period to pay-period. To meet that goal, you will have to come up with some smaller objectives that will help you meet that goal. An example might be that you make it your objective to cut down on eating out. You decide that you won’t eat out for lunch every day and instead will take your lunch. But that leaves you with money that you didn’t have before, because you were spending it on lunch. Now you have to give that money a task!

Picking an Appropriate Task for Your Money

Let’s say that you are now saving $2 a day from your lunch objective. That’s a measly $40 a month, right? Now, have a look at your overall finances. If you were so strapped that you couldn’t even go out to a movie once a month, perhaps you can give your money one task by allocating part of that (say $20 a month) to your entertainment only. And that $20 has to let you relax a little bit in some way, even once a month. Now you have the other $20 to assign another task to. If debt pay down is one of your goals, then that extra $20 can go towards the debt. And that will really help in the long run!

Whatever job you decide to give your money, you have to make sure that it meets the objectives you make to meet your overall goals. Straying can sometimes be hard, but if you make a list of your goals, then you are more likely to meet them. You can also then break each of those financial goals into steps that will really move you foreword and help you stay motivated. Remember, smaller steps are easier to take than big leaps. And the little steps end up covering the same distance. The small steps tend to get you towards your goal with less energy, worry and in an easier, safer manner. And that means you’re more likely to stick to your goals!

We all want to have a perfect financial life and for it to be easy. Having a budget is the first step in that goal.

Setting up your personal home budget shouldn’t be a chore. But for some people the dread alone is enough to push them away. Solid reasons to start it and use it are required! Did you know that those people who are self made are people who always have personal budgets? If that isn’t a good reason, here are five more.

1. Understanding Your Finances
   
   A budget will help you to understand your personal finances. In fact, without it you cannot understand where you are financially. A budget lets you see not only your expenses, but also your income and truly understand what it is you have and need. And this knowledge is something that you will require if you ever want to control your finances and set some goals. And that control is a really good feeling!
   
   
2. Financial Goal Setting
   Once you understand your basic finances, you start to obtain control over them. This then allows you to set your personal financial goals. Through the understanding of your finances you can see where you have money, and where you are spending it. This allows you to prioritize your spending and gives you some flex in your finances. With that flex you can set goals, such as a vacation or cool new thing you’ve always wanted.
3. More Financial Opportunities 

   With a budget and setting goals you will be able to take advantage of more opportunities in the future. This allows you to make more money from your money. And there really isn’t anything cooler than that! 

4. Time Saving
   Yes, time saving! With a budget you will be able to save time if ever need to know something about your finances or if you ever need to obtain some records for a creditor or other interested party. And it makes it quicker and easier for you to make decisions.
5. More Money
   The number one reason to have a budget is that it gives you the power to find that you have more money in your life than you expected. Once you understand your expenses and where you are spending your money, you can decide what areas are frivolous and alter your spending habits so that you can spend your money in more productive ways, such as paying down credit cards or investing. And that nets you more money in the long run!

With a personal budget you will gain control over your financial life, which in turn can make the other aspects of your life better! Making a budget is simple, and there are numerous places that you can get help in your initial steps.