Sometimes we pour ourselves into these posts... struggling with the placement of every spoon and dusting away crumbs (unless we want them there)... and then, NOTHING.  No comments, no buzz.  On the other hand, sometimes we toss together a post with little concern for how it will be received.  Instead, we just put out something that we think is important to share and that somebody might find useful.  Often times, these are posts about something we do in our own home that has been successful.  And then, it EXPLODES.  

That is the case with this revisited post.  This is a method we started years ago to keep ourselves on track.  It's so simple that you can't believe it works!  When we put this post out we had only been blogging for a few months, but something changed.  A few sites got ahold of it and it spread like wildfire.  I think it has something to do with people wanting to control their finances, plus the free printable didn't hurt matters.  At any rate, I hope you enjoy the original post Today's Money: Budgeting with Cash Envelopes.

savour... checked lists

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The world of banking is changing before our eyes.  If you bank with one of the big boys you have probably received a disclosure recently outlining the upcoming changes to the fee schedule.  You might be thinking they are at it again… always trying to figure out a way to get my money.  What is really happening here?

Recent legislature has changed the way that banks make money.  There was a period when Non-Sufficient Funds (NSF) fees made up a large chunk of the overall income banks received.  Many folks ended up paying $40 for a cup of coffee.  With the changes came the requirement for banks to give customers the opportunity to opt out of overdraft courtesy.  In most cases you already had the ability to do it.  Banks just didn’t advertise it.

As a result, banks had to start looking for ways to make money elsewhere.  There was a time when free checking did not exist at every bank.  This is a case of history repeating.  Banks must now begin charging a monthly service fee for accounts to make up some of the gap caused by the shortfall in NSF fee income.  However, in most cases you can avoid fees by meeting one of their requirements.  These include things like direct deposit, using online banking or bill pay service, and maintaining a minimum average balance.

Why are they doing it?  It’s a business.  When checking was free everywhere many households had accounts at several banks.  With the tightening of the purse strings, banks need to encourage you to hold your relationship with them.  By becoming your only bank for checking, they secure their pole position for your lending, saving, and retirement needs, as well.

Should you be outraged?  Probably not.  True enough… banks make plenty of money (we won’t even jump into the bail out), but consider this… they are still providing a service to us.  Whether we like it or not, we have allowed ourselves to become a society that relies on the financial service industry to handle our daily finances.  If you put your belongings into a storage facility you would pay a fee to have your things protected and have access to them as you wish.  It’s a little dumbed down, but you get the idea.

What you should be outraged about is not getting value for what you pay… whether it is at the storage facility or a bank.  There are too many options these days to not get top notch service.  Be very clear… banks are dying for your business right now.  Demand (nicely) to be treated like a valued client and not an account number… no matter how much or little you have.

But wait!  There’s more…

New legislation is changing the game again.  Now banks will be crippled even further by new laws which dramatically slash the amount they are able to make through debit card purchases.  You can expect changes soon.  Some banks have already begun to charge for things which had once been free and many reward programs have been halted.

So what can you do?

• Act now.  Open every piece of mail you get from your bank and read it… really.
• Review your accounts and determine if it is time to consolidate banks.
• Understand how opting in and opting out affects you and make an informed decision.
• Visit a personal banker at your local branch.  Ask for straight talk and information.
• Watch your account closely for fees.  If the account receives a fee due to any of these policy changes, request a refund.  Most banks will oblige unless you are a repeat offender.

If you are like so many other people, every year sometime in December you say something like, “Next year I am going to be better prepared for the holidays.”  This is a common statement that is difficult, at best, to manage.  Planning can seem like a waste of time, but the truth is that it is quite the opposite.  The time we spend planning, if done well, could repay us ten fold in the end.

Before employing any of the tactics, my best recommendation is that you get a binder or set up a holiday folder on your computer to save all of the information as you do it or collect it throughout the year.  Your binder or folders should be further divided into categories such as Holiday Card List, Shopping List, Holiday Menus, Holiday Activities, Inspirations, Budget and Savings, etc.  Make it plain or embellish it to get you in the spirit, but have a central location to save all things holiday.  By doing so, you will save yourself much time, money, and hassle.

savour… happy holidays

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The economic climate has sparked a new interest in budgeting.  It may be out of necessity, or it may be in response to the media attention this topic has received.  Either way, there is something to be said for living within or below your means.

There are many budgeting tools out there to manage bills and your checking account register.  What we cover today is a much more basic approach to managing expenses.  It will not be used for everything, but will help to manage day to day expenses.

This will require a little work up front in terms of budgeting, making the envelopes, and getting the cash.  However, the satisfaction of taking control of your finances and spending is well worth the effort.  You could use pre-made envelopes if you wish.  We have included an easy to use template to make the process easier for you.

savour… cold hard cash

Coupons are not a new sensation.  I remember the cost saving measures my mom would take to stretch our grocery dollar... clipping and sorting and filing (and growling when she missed an expiration date).
 
I am not that person, but I do think there is real value in couponing.  Like most things in life, you get out what you put in.  There are some people who are very serious (maybe too serious) about couponing and pay almost nothing for their groceries each week.  They probably have to dedicate far more time to the cause than I could.
 
However, what if you could save half of your grocery bill each week? What would you do with half of your annual grocery budget back in your pocket? There may be a few changes that you could make that would let you keep some of your hard earned money.

savour... saving

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Another Tax Day has come and gone.  It may have left you feeling a little deflated.  Perhaps you are one of the lucky that is receiving a refund.  Maybe you are wondering how to best utilize the extra money.  Either way, after reviewing the final numbers you may have found yourself asking, “What did I do with all the money I earned last year?” 

Chances are, like so many other Americans, you gave a chunk of your earnings to creditors last year.  You do not need to be carrying too much debt to be a victim, either.  Having any debt makes you subject to rising interest payments, annual fees, late fees, etc.  Almost anyone who has debt has imagined a life without it, but one thing is certain… most could be well on the way to financial freedom by employing a prudent budget.

There are many ways to begin reducing and managing debt.  Here we will cover the Snowball Method.  This method has been praised for its success if given strict adherence.  Many financial gurus give it a nod including Dave Ramsey and The Motley Fool.

There are differing thoughts on the best way to begin, but the end result for both is financial control.  One school of thought is to begin with the debt that has the highest interest rate.  By doing so you would save more money in interest payments.  I do not dispute that.  The other angle is to start with the debt showing the lowest balance.  In this way, you get the emotional satisfaction of paying off bills more quickly.  The theory is that this would motivate you to keep going.  Ultimately, the choice is yours.  Personally, I would choose plan B simply because I lack patience.  I like to see results.

There are a variety of snowball calculators on the web.  I “demo-ed” the one at vertex42.com.  There is a video link that explains it all and the download is free.  For the techno-savvy crowd there is a smartphone app for nearly every platform.

Here are the basic steps:

1. Write a monthly budget for yourself.
2. Save aside an emergency pool (about $1000 for car repair, etc.)
3. List your debts in descending order according to the method you prefer outlined above.
4. Decide what your snowball amount will be.  This should be the amount you can afford for total debt payments minus the minimum payments for all.  Note: the total amount will be budgeted for bill payment every month, even after bills start getting paid off.
5. Make the minimum payment on all accounts except for the one at the beginning of your list.  This will be the debt with either the lowest balance or the highest interest.  On this account make the minimum payment plus whatever snowball money you have.
6. Continue in this fashion until the first debt is paid. 
7. The month after the first debt is paid in full, the minimum payment from the recently paid off debt plus the initial snowball money becomes the new snowball money. 
8. Again, pay minimum payments on all debts except for the next one on your list.  That one gets its minimum payment plus the “new” snowball money.  *Now you are getting somewhere.
9. Continue until all bills are paid.  It will happen sooner than you think.

Things to consider:

• The more debts you pay off the bigger the snowball gets.  The bigger the snowball gets the quicker you pay off the next debt.
• Don’t pay late fees!  Utilize online banking to pre-schedule payments.
• If you do accidentally go beyond the due date, call and ask for a fee waiver.  If you are not a repeat offender, many companies will consider it.
• Ask for an interest rate reduction.  The worst thing they can say is “no”.
• Read your statements.  Over the years I have caught many errors.  Most often, these are just computer-generated errors.  Usually it only takes speaking with a human to get the problem resolved.  Be diligent.  It’s your money!
• Once you have broken the chains do not slip back into the same pattern.  Pay cash whenever possible.

This will take motivation.  Try to imagine yourself debt-free.  What would you do with the extra money each month?  The results are closer than you may realize.  Please send me your comments or suggestions that might help others.

savour…liberation.