ITT: Personal Finances

[Hurleysurf24]

Let's talk about personal finances. I'm going to try and keep this thread up, and we can all use it as financial advice to eachother.

For my first post I'll talk about the importance of understanding daily budgeting.

Many people lack the understanding of what a daily budget is, and how to prepare one. I stress the point of a daily budget, as budgeting at a monthly level usually means you find yourself six or seven days from your next paycheck with little to no cash. I like to use my rule of 3-C; Calculate, Consider, Condense. The first and most important aspect is calculating your daily intake/outake.

It's fairly simple to calculate when you're paid bi-monthly. However, many of us get paid bi-weekly. When this happens we must annualize the amount before budgeting. To do so you take XXXX * 26 periods / 365 days = daily take home. From here, you can multiply out per month. For example, a bi-weekly pay check with $2,000 take home, yields 142.46/day.

Once you get your daily take home, you can start playing around with your numbers. Let's take March for example. You know you have $142.46/day but this is before bills, loans, savings etc. You would multiply the $142.46 * 31 days = 4416.26. Let's say you have $1,000 for rent and another $1,500 used to pay loans and put money away for savings. You then take $4416.26 - $1000 - $1500 = $1916.26. Now we divide the days again to come at $1916.26/31days = 61.84. This amount is the total you can spend PER DAY without using outside sources to maintain (i.e. debt). Microcalculating this provides a much better picture of your financial stature. Before, I relied on the monthly budget, but then realized I was over-spending and extended my debt to support my daily spending as I average $20.00 over what I should have been spending.

The second C, consider, plays a large role in keeping in line with your budget. You should always be considering whether you need or want something, and if there's room in your daily budget to purchase. My rule of thumb now is not to purchase anything that extends outside your daily budget unless one of two conditions occurs: 1. You have leftover from a PRIOR days budget (notice I didn't say for FUTURE, as you never know what expenses may pop up). 2. You are purchasing an item with debt, that you can pay off, that provides continued future benefit. Afterall, you wouldn't blow your budget and go into debt for a steak ... there's no use after it and you'd still be paying for it ! By actively considering each item and your budget, you enable yourself to reduce overspending.

Lastly, condense your budget. In the example above, you are left with $61.84. But what happens if you need additional cash on tap? In addition to your savings, retirement, etc etc ... you should build a small emergency fund in your checking account. You can do this fairly quick by condensing leeway into your budget. Instead of having $61.84 daily, you can reduce your budget to $45.00 per day and grow your emergency fund. Condensing gives you leeway and in a somewhat psychosomatic way, allows your not to have a panic attack if you blow your budget by a few dollars.

[Hurleysurf24]

Some of this stuff was obvious, but I thought it was a decent read:

1. Once a month: Pare it down, sell it off

The next time you're cleaning your actual house, consider: Do you really need all the stuff you're dusting? Too many of us are drowning in clutter. Set aside 20 minutes once a month to weed out clothes, toys, knickknacks, the wedding-gift wok you used exactly twice. Sell the surplus on eBay or donate it to a charity thrift shop.

Donna Freedman

"Americans are beginning to understand the power of purging," says interior design specialist Christopher Lowell. This results in a comfortable living space full of carefully chosen items.

Comfortable people are happy, which may mean fewer impulse buys and less spending to replace things lost in all the clutter (gloves, nail clippers, screwdrivers and the like).

Consider purging dry-clean-only items, or vow to stop buying them. Those you feel you must keep can be cleaned less often if you're not a messy eater who sweats profusely. Lowell suggests that you "freshen" clothing once a week with a spray product such as Febreze.
"There's no reason you can't rotate your clothes. That can save literally a thousand dollars a year," Lowell says.

2. Once a month: Do a walkaround

Take a fast walk around your car to look for fluids on the driveway or low/bulging tires. Check the oil and the lights. These simple chores could save you a world of hurt.

Do the same for your house: 20 minutes indoors and 20 minutes outdoors. Look for issues like mildew, slow-running rain gutters, foundation cracks, crumbling caulk, peeling paint, basement dampness, loose weatherstripping or missing shingles.
Put fixes on your to-do list: Change the filter on your furnace or air conditioner; check exterior air-conditioning units for leaves or other debris. Both are quick ways to lower utility costs.
Stuart Hickox, the founder and president of the nonprofit OneChange suggests several other fast ways to save on energy costs:

• Switch out incandescent bulbs for compact fluorescent bulbs certified by Energy Star.
• Use power strips for electronics and appliances, and turn them off when not in use; "vampire" energy use accounts for up to 15% of your electric bill.
• Get a programmable thermostat. It takes only a few minutes to program, and a one-degree change can save you 3% to 5% in energy costs.
• See if your region offers free refrigerator recycling and/or rebate programs, then invest in a new icebox; it will save you $120 or more per year on your electric bill.

3. Every time: Comparison shop

Before you buy that fridge -- or anything else -- take 20 minutes to shop around. Start with price comparison websites, which will find the best price for a "site to store" deal, i.e., bought online but picked up locally.
Once you've found the lowest prices, check whether those stores are represented on a cash-back shopping site such as Ebates, FatWallet or Mr. Rebates. These sites offer money back on your purchases as well as coupons for special discounts, free delivery or bonus items. (When I bought my first laptop last year, the retailer threw in a free printer/scanner/copier.)

Prefer to shop locally? Ask the clerk if there's a coupon. Professional organizer Leslie Jacobs asks for discounts, just to see if salesclerks will give them -- and sometimes they do.

"If you don't ask, they can't say 'yes.' I always ask," Jacobs says. (For more on this, see "Yes, you can haggle at Macy's.")

4. Every night: A home-cooked meal, with leftovers for lunch

Eating out a lot, or buying expensive convenience foods? Don't cop out with "I don't know how to cook." You can learn. A few basic techniques will save you hundreds of bucks each month.

Do an online search for "20-minute meals" -- you'll be amazed at what pops up, complete with adjectives like "quick" and "easy." I'd also suggest the Cheap Healthy Good blog, which brims with recipes for all skill levels.
Double or triple a recipe so you'll have leftovers to freeze for later or to put in tomorrow's lunches. Those who took my "brown bag challenge" were horrified when they realized what they'd been spending on lunches out. Plan on three to five minutes to pack a meal.

5. Every day: Exercise

Along with a decent diet, to stay healthy and keep medical bills low, you need exercise. But you don't necessarily need a gym.

"You just need your body," says Alex Fell of Warrior Fitness in Manhattan.
The former Marine says that exercises like push-ups, stretches, jumping jacks, dips and mountain-climbers will promote strength, flexibility and cardiovascular fitness. Twenty minutes at a time, three to five days a week, is a good start.

In an MSN Health article, a researcher from the University of Tennessee Obesity Research Center noted that "even modest amounts" of daily walking can offer health benefits. "Modest" meant 30 to 40 minutes a day -- daunting for some people. But what about taking 20 minutes at lunch to walk around the block, or up and down workplace stairs?

One extremely simple way to improve your health: conscientious dental hygiene. Brushing takes two minutes, three times a day, and flossing takes five: less than 20 minutes a day to prevent cavities, halitosis, eventual tooth loss and maybe heart disease or stroke.
6. Once a week: Clip coupons

Tiffany Ivanovsky, a working mother of seven kids, spends $475 a month on grocery-store purchases - including toiletries and diapers.
"Sometimes there's a stigma that if you use coupons you must be really poor," says Ivanovsky, who writes a savings-oriented blog called MyLitter. "But what it means is that you're really smart."

Too busy to clip? Use e-coupons. Ivanovsky's blog and sites like CouponMom and A Full Cup match coupons to weekly sales at drugstores and supermarkets, and provide links to downloads. Twenty minutes once or twice a week and you're set to save $100 a month or more.

7. Once a week: Talk money

First, set yourself up on a fast and free budgeting site, like Bundle, to track your expenses.

Now, plan 20 minutes a week to talk money with your spouse or partner. Otherwise, you can each "be thinking different things about the finances" and wind up overspending, says Scott Crawford of DebtGoal, an online service designed to help people pay off their debt.

Weekly chats also let you set goals and celebrate progress.
Here's a reasonable goal: Check all bills and statements as they come in. What if someone has been using your credit card? Suppose you forgot to record an ATM withdrawal? And heaven forbid you should pay a medical bill without reading it. A simple coding error can result in a charge your insurance company won't cover.

Take a few minutes to read your statements, questioning anything you don't understand.

8. Once a year: Negotiate each bill

Jacobs decided her cable bill was too darn high and called to say so. Well, she actually said, "I've been a good customer for years -- what can you do for me?" In exchange for a two-year commitment, she now pays 50% less each month.

Similar calls got Jacobs discounts on TiVo and her phone plan. Try this strategy yourself, one utility at a time.
The biggest money-saver to negotiate, though, is your credit card interest rate. According to Curtis Arnold of CardRatings, companies are actively soliciting for new account holders. Lately he's seen zero-percent balance transfer offers for periods as long as 24 months.
Those deals are available only for people with FICO scores of 730 or higher, and there's a 3% fee with no cap. But someone paying 18% interest can still come out ahead.

Spend 20 minutes researching card deals, then tell your current company you want a better rate. Be prepared to walk, but the fact is "you have a much better chance today than you did 18 months ago," Arnold says.
Definitely worth 20 minutes of your time -- and another 20 minutes, if need be, to apply for a new card.

Vow to spend 20 minutes reviewing your insurance coverage. Did you get married (or divorced), have a baby or remodel your home? You'll need to increase or decrease coverage accordingly.

And, of course, don't forget about auto insurance. (Read "Dump the insurance on your clunker" to see if you need collision and comprehensive.) If you do, consider higher deductibles, which can save 15% to 30% on your premium. If you're in the market for a car, compare premiums on models before you decide.

[citrin]

One of the few things people find really hard to manage is their personal finances. But when you consider it lightly, it would be as simple as making the right cuts at the right moment to save you how much you want to save.

It is not rocket science and would just be about how you deal with things and everything in between. Just plain and simple.

[Hyu]

I wish my gf would read this...