All posts in category Money and Spending Wisely

Making a budget, Paying using only cash… Easier and safest approach at this time

Budgeting simplified to allow us to save and to spend using cash only!!!

10 Ways to Simplify Your Budget

Every Tuesday is Finance & Family Day at Zen Habits.

I’m always looking for ways to simplify my finances (I’m weird like that, I know), and recently I’ve been scrutinizing my already-simple budget to make it even simpler.

I thought it would be helpful to share some of the ways to make your budget as simple as possible.

The goal is to

  • reduce headaches,
  • eliminate the need for complicated tracking schemes,
  • and reduce the time you spend on your budget and finances to about 15-20 minutes per week.

I can’t claim these ideas are original, or that I haven’t discussed them in various places before, but in my experience, they work. They’re simple and powerful.

Let’s first look at setting up a budget.

If you haven’t done it yet, it’s probably because budgets seem intimidating to you, or they are too much hassle to set up and maintain.

Those are both valid points — which is why you should follow this simplified plan if these things apply to you. Now, there’s plenty of fancy software out there for setting up budgets, but I don’t think they’re necessary. A simple spreadsheet will do — and if you can create a SUM formula to add up the total of a column of numbers, you have all the spreadsheet knowledge necessary.

1. Create a simple spreadsheet for your budget, if you haven’t already, and start by listing your income and your monthly expenses. Estimate, in round numbers, how much you spend on each expense every month. You can adjust later, but it’s better to err on the side of too high a number, rather than putting a low number and breaking your budget.

Now let’s look at ways to create a simple budget:

2.  60 Percent Solution. There are many ways to structure your budget, but the simplest I’ve found is the 60% solution. Basically, this budget asks you to fit your regular monthly expenses within 60% of your gross income, so that you have room for savings (long-term and short-term), retirement and spending money (“fun money”). These are the things that most often break a budget, because most people don’t budget for them.

Now, your percentage will vary, but the percentages given here are just rough guidelines:Fewer categories.

A lot of budget software asks you to fill in a million categories and subcategories. Those can be useful if you want to track all that stuff, but I don’t. I recommend simplifying: just use broad categories like food and gas and spending and utilities. Use what works.

  • 60 percent: Monthly expenses — such as housing, food, utilities, insurance, Internet, transportation. This is the part most commonly thought of as a budget.
  • 10 percent: Retirement — and if you’re doing it right, this is being automatically deducted from your paycheck for a 401(k) investment.
  • 10 percent: Long-term savings or debt reduction. It’s best to invest this in something such as stocks or an index fund, and this can serve as your emergency fund. But if you are in debt (not including a home mortgage), I would advise that you use this portion of the budget to pay off your debts, and even draw some from the other categories such as retirement to increase this to about 20 percent for now. Once your debts are paid off, you can switch this to long-term savings. You still need to have an emergency fund, but while you’re in debt-reduction mode you can either create a small, temporary emergency fund out of the money from this category or the next.
  • 10 percent: Short-term savings — this is for periodic expenses, such as auto maintenance or repairs, medical expenses (not including insurance premiums), appliances, home maintenance, birthday and Christmas gifts. For this savings account, be sure to spend the money when you need it — that’s what it’s for. When these expenses come up, you will have the money for them, instead of trying to pull them from other budget categories.
  • 10 percent: Fun money — you can spend this on eating out, movies, comic books — whatever you want. Guilt free.

3. Pay bills online. As much as possible, pay your bills online. These would be most of the bills in the first category above — utilities, rent or mortgage, cell phone, Internet, etc. If you can’t pay electronically, have your bank send out a check to the vendor. Make these payments automatic, so you don’t need to worry about them.

4. Automatic savings. Make your savings automatic as well. Every time your paycheck is deducted, have a scheduled transaction transfer a set amount from checking to savings. Use a high-yield online savings account such as Emigrant Direct, HBSD, or ING Direct.        [I am not familiar with any of these companies so I cannot endorse them…. They were in the original article… Please note though that you are not being sent to bank at METABANK. There is a very good reason for that.]
5. Cash. For everything else, use cash. If you’re doing automatic bill payments and savings deductions, the only things you’ll likely need cash for are gas, groceries and fun money. Withdraw these amounts in cash twice a month, rather than using checks or credit cards. The reason is that it’s simpler — with cash, you don’t need to worry about overspending, or tracking how much is left in that category. You can see how much is left. Leave the credit cards for when you absolutely need them — traveling, for example.
6. Envelopes. If you use cash for three categories, for example, use three envelopes. This is an old-fashioned system, but I use it because it works. I have an envelope for groceries, gas and fun money. If I’m going grocery shopping, I bring the groceries envelope. I know how much is left in the envelope before I go grocery shopping. I spend the cash for groceries, and then can easily see how much is left now. Simple, and no tracking necessary. When the money is gone, you’ve spent your budgeted amount. If necessary, you could transfer cash from one envelope to another, and there’s no need to adjust your budget.
7. 15-20 minutes a week. Now, the budget and spending plan I’ve outlined above is fairly simple and headache-free — but you shouldn’t assume that it doesn’t need any maintenance.
You should devote 15-20 minutes a week to ensuring that your finances are in order. Just this little amount of time each week will greatly simplify your financial life, reduce headaches, and prevent any messes from occurring later. Set a day and time when you take a look at your finances each week.
Set aside 30 minutes, just to be safe. Now take 5-10 minutes to enter your transactions into your financial software (I use MS Money, because it came with my computer, but a spreadsheet or other financial software will do fine).
If you’re following the plan above, all you’ll need to do is go online, look at your bank account, and enter your deposits, bills paid, ATM withdrawals (only do this twice a month!), and any other fees. It shouldn’t take long.
Now spend another 5-10 minutes to review your budget and make sure that all bills have been paid that should be paid. If not, pay them.
It’s that simple. You’re done. Now go back to reading your blogs.
8. Fewer accounts. Some people have complicated systems set up with lots of different accounts. I say simplify. You don’t want to be checking a million different accounts. You should have one checking account and one or two savings accounts (one for emergency fund and one for periodic expenses). You could have a bunch of investment accounts if you want, but I’ve found it simpler to just have one. I lose diversity, but my fund is already pretty diversified.
9. Dump credit cards.
[Dump all  bank cards period…. Get rid of all those plastic nooses!!!!] Multiple credit cards are also a headache. Simplify by just having one. Or do what I do — have none.
This will draw the usual outraged or preachy reaction from those who really love their credit cards, but I don’t care.

 

I don’t like credit cards. Call me old fashioned.

 

They charge high interest and they’re potentially dangerous (if you run up a high bill and an expense comes up that you need to pay for which means you can’t pay your credit card bill on time, you now are stuck with high-interest credit card debt).

 

Use a debit card if you need to.

[NO, NO, NO!!!!!  

……We cannot advise using a debit card  either because this amounts to being an interest free loan to a bank and often the consumer is charged activation fees for these cards on top of giving out an inbterest free loan…

…This is the biggest gimmick to come about in centuries… Clever marketing makes the debit card sound like a way to keep yourself from over spending, but the way that METABANK operates internally means that customers are kept from being able to access their own money when they really need it. Some have complained that they had to get a loan to even be able to pay routine monthly bills. METABANK is operating  a fraud on their customers. They lied to me about why they felt they should keep me from accessing my own cash money…. METABANK made themselves into the “PREPAID CARD POLICING SYSTEM.” However, it is METABANK who is doing a major scam…..

…All that we can do is to warn others not to use any kind of METABANK PRODUCT]

10. Pay all bills at the same time. It often just takes a simple call to get a vendor or creditor to change the due date on your bills. If you can get all your bills to be due on, let’s say, the 10th of the month, you can do all your bill paying at once. For some people, this will mean they will need to do a bit of scrimping to get ahead enough so that they can afford to make all their month’s payments at the beginning of the month, but it’s worth it. You can pay all your bills and be done with it.
[Because the product that METABANK, a PREPAID CARD, didn’t work at all from a consumer’s perspective for us and many others who complain regularly about how they have been kept from being able to access their own money once they gave METABANK cash money to place on a prepaid card, we feel compelled to alert other consumers that the METABANK PREPAID CARD isn’t good for customers/consumers.]

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by mrnd5 on February 5, 2013  •  Permalink
Posted in Bank Reform and Proper Regulations are Needed, BANK REFORMS NEEDED TO BE CAREFULLY REGULATED, Bank regulators shut down MetaBank payday loans, banking in Storm Lake IOWA, Banks Designed To Keep Consumers in Debt, Banks have created all the rules for PREPAID CARDS, Banks Lying to Consumers To Trick Them into taking on Debt, but it is still Meta Bank's same service and poor quality, Complaints Against Meta Bank, Consumer Advocate, Consumer Alert, Consumer Rights Advocacy, Consumer Rights- consumers have no or few protections from predatory banking practices, Consumers align to protect yourselves, Consumers are Vulnerable: Help each other, Consumers being forced to use plastic, Consumers Demand Bank Reforms That Serve Their Real Needs, Consumers Join Forces to Protect Each Other from Bank Scams and Frauds, Consumers must speak out, Consumers Need To Save Money And Stay Out of Debt, Corrupt Practices found within METABANK, Creating Easy Preys Doesn't Make METABANK's Practices Moral, Customer Service isn't listed as being one of META FINANCIAL GROUP INC areas of interest or studied skills, Customer's being scammed by Money Network, Customers of METABANK continue to complain about how they have been mistreated by METABANK, debit card fraud is always a possibility, Don't Invest in META BANK, Don't pay using a debit card, don't take on more debt to pay off the first debt, Don't use PREPAID BANK CARDS of any kind, Economic Servitude needs to be studied and abolished in the USA, fast paced banking systems, Fight Corruption, future oriented, getting out of debt, Gift Cards May be Suspended After Purchase and without notice, Holiday Gift Cards: have hidden fees, How to make a budget and to save money, Just try to save, marketing is basically Meta Bank's major strength just behind collections, Meta Bank charges customers for spending their own money, META BANK doesn’t serve the general public, Meta Bank is nothing but a publicity scam, Meta Bank never accepts responsibility, META BANK same poor service as always, METABANK CEOs create and require all of the rules, METABANK CEOs make huge annual incomes, METABANK customers are still complaining about the abuse they have received from METABANK, METABANK Customers complain about METABANK's mistreatment, METABANK is a collections agency and not a bank, MetaBank is corrupt, METABANK lies to their own customers, METABANK operates using many different names, METABANK practices are dragging the economy down, METABANK PREPAID CARD, METABANK uses both Pyramid and Ponzi Schemes, METABANK uses false awards- false testimonials, METABANK's partner company provides METABANK with access to their customer base, METABANK's publicity says that their prepaid card will meet your specific needs but in reality they are the exact same card just using different publicitty, Money and Spending Wisely, Narcissistic practices found to be within METABANK's operation, personal finance, PREPAID CARDS are not adequately regulated, PREPAID CARDS are not consumer friendly, PrePaid Name Brand Bank Card Association a non-profit is a scam, Saving Money, Scams by banks like METABANK, Stay Out of Debt, Stay out of debt- don't get loans to pay off loans, Success shouldn't be about profits - People mattter, Suspicious Activity is within Meta Bank's internal practices and policies
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Posted by mrnd5 on February 5, 2013

https://mrnd5.wordpress.com/2013/02/05/making-a-budget-paying-using-only-cash-easier-and-safest-approach-at-this-time/

Cheers, Fears, Holiday blahs and “Gift Cards” to be avoided: Companies can also choose to suspend the acceptance of gift cards.

Here is our scenario: We are supposed to give gifts to one and all…. Commercialism has won out in our holiday celebrations. Then what if we really don’t know what to give as a gift, but feel compelled to just get something.

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25 Days of Christmas! Hanukkah bushes! Nissan Altima commercials galore! Their presence can only mean one thing…Chrismahanuwhatthehelliskwanza is upon us!

With a mere 3 weeks before Hanukkah kick starts the marathon of gift giving, eating, and looking like Saint Nick after hot boxing in his sleigh as you try to digest the mammal you just devoured, it is time to prepare your mind, body, and bank account for the upcoming festivities. Christmas carols being sung, dreidels being spun, and re-teaching yourself how to casually sip wine with your grandparents rather than binging playing Slap the Bag with your biddies are undoubtedly a part of everyone’s December jubilee. But, nothing says holiday season more than some severe emotional scarring with your extended family.

We’ve all been there! Whether it’s your second cousin staring down your dress and exclaiming “look at the bosoms on this one!” in a room full of people, or your grandfather confiding in you about his decrease in sexual activity due to Granny’s recent knee replacement, some of the things that happen will make you reconsider why in the world you were looking forward to winter break. Considering both the former and the latter have happened to me, I have come to expect these kinds of shenanigans. Though I make numerous trips to the bathroom mirror to make sure my ears aren’t bleeding, these comments are relatively harmless. Plus, I tend to forgive my elderly kin when they offer me a cookie, candy, and/or a kiss that is not planted directly on my lips. At every family gathering, however, there always seems to be a black cloud, a Debbie-downer of sorts, or blatantly, someone who everyone wishes would take a hike to the Himalayas and never return.

Holiday season is a time of cheer and merriment, but it’s hard to enjoy some Yorkshire pudding when Aunt Sourpuss is glaring at you with intensity strong enough to burn holes through your forehead. It’s not your fault her self-diagnosed, totally false “gluten intolerance” prevents her from eating anything but string beans and water, you will enjoy your 1500 calorie snack thank you very much! Furthermore, holiday time is a season of kindred gatherings, not a cutthroat competition between family members. Yes, her child does have a nice voice for a 6 year old, but when she commands her to belt out 3 ballads mid-dinner and claim she totally beats your 4th grade rendition of “Over the Rainbow,” everyone, even her poor show-monkey children will want her to leave. Seriously, when your own kids look at you like they’re imprisoned stuffed animals at your tea party from Hell, it’s time to reevaluate yourself as a person, parent, and in the overall scheme of life.

Nothing lures out old insecurities like spending time with your family. Despite the tears, tension, and inevitable fights, the holiday season proves every winter to be a period of renewed bonding, a time to be happy, to laugh, and to be thankful… that it only comes once a year.

http://theribcomedy.wordpress.com/2011/12/01/tears-fears-and-holiday-cheers/

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Okay, so much for family dynamics. Let’s look at your financial security. Let’s make some reasoned decisions using facts over emotions and over zealous publicity encouraging us to buy something, anything.

_________________________________________________________________________________

Gift card gifts might mean fees

Check rules on inactivity, loss

Written by  Candice Choi  of the Associated Press     2:23 AM, Dec. 4, 2011

NEW YORK — Gift cards are an easy way to ward off disappointment during the holidays.

In the best case scenarios, they give our loved ones the freedom to buy whatever it is they really want and alleviate the stress of trying to find the perfect gifts. But that doesn’t mean they’re always a slam-dunk.

The surprising number of fees and earlier-than-expected expiration dates on some gift cards were enough of an issue to prompt new regulations last year. For example, monthly inactivity fees in the past may have drained funds before consumers had a fair chance to use them.

[ What? You mean that the banks who provided the cards and their partner companies weren’t actually looking out for the consumer’s interests????!!!!!   That is the fact of the matter. Consumers need to be protected from greedy banks and their partner companies.]

The changes are expected to help dramatically reduce the amount consumers lose on gift cards. Yet an estimated $1.9 billion is nevertheless expected to go unused this year, according to TowerGroup, a consulting firm.

[ Money spent on gift cards, but then never used is a wonderful deal for the banks and their partner companies, but not so good for consumers.]

The problem is that fees and expiration dates  aren’t  the only way consumers can lose money.

Whether you give or receive a gift card, here’s what  you should know:

What regulations cover

To start, it’s a good idea to know the consumer protections that come with a gift card.

Under the rules that took effect last summer, gift cards can’t expire for at least five years.

[However, a gift of CASH has no expiration date and can be spent anywhere at all and forever.]

Monthly service and inactivity fees are also banned in the first year and only one such fee a month is allowed after that.

[ Yes, a gift card still comes with strings attached. Just give cash and make your life  and the recipient’s easier.]

The rules were included as part of sweeping credit card reforms and should go a long way toward reducing many of the “junk fees” in the industry, notes Brian Riley, a senior researcher at TowerGroup. [ We all thought that they were “junk fees”!!]

But there are several important exceptions to note.

      • For example, the gift cards many retailers offer either as incentives or rebates with big purchases are exempt from the rules.
      • You may also be considering redeeming your credit card rewards for gift cards to pass out during the holidays. But those gift cards aren’t subject to the new regulations either.
      • “Any type of gift card that you don’t purchase outright, you’re going to run into expiration dates and fees,” says Michelle Jun, a senior attorney at Consumers Union.

As a result, Jun notes that rebate and incentive gift cards often expire as quickly as three months.

Checking the terms

The gift cards issued by major retailers are fairly straightforward; you load a set amount onto the card and the recipient generally isn’t subject to any fees.

The terms become more complicated with bank-issued gift cards, which bear an American Express, MasterCard or Visa logo.

[ These were designed by METABANK, aka as BANKMETA and they are out and out just there to make money for themselves and lots of it and then more.]

The upside of these cards is that they provide more flexibility, but they’re also more likely to come with fees that you’ll need to review carefully.

[ Up-side???? This is being very kind. There are fees and rules that change over and over again.]

Gift cards from American Express, Chase and Wells Fargo, for example, charge purchase fees of around $3 to $7. That’s on top of the money you want to add to the card.  

[ Please simply give cash money as gifts instead.]

Chase and Wells Fargo cards also both charge an inactivity fee of $2.50 a month if the card isn’t used for a year.

[ These groups meet to discuss strategy for the bank cards annually.  There is no way a consumer can win.]

American Express, by contrast, last year did away with inactivity fees and expiration dates.

The fine print may contain other details that may sway your decision on which card to buy. Chase, for example, eliminated its $12 fee to replace lost or stolen cards, but Wells Fargo still charges $7.50 for the service.

[ I see no advantage to gift cards. Just give cash money.]

There may be incentives to consider, too; Chase’s premier checking account customers, for example, don’t have to pay the purchase fee for the bank’s gift cards.

Other value losses    [ There is more???!!!]

Unlike debit and credit cards, consumers aren’t given any guaranteed legal protections if a gift card is lost or stolen.

[ Why not just give cash money instead????]

So if it’s an option, go online and immediately register any gift cards you receive. If you’re planning on buying a gift card as a present, e-gift cards can greatly reduce the chances for loss or theft, notes Riley of TowerGroup. This is because the code for the gift card is sent in an email to the recipient.

[This sounds like a lot of unnecessarily cumbersome work. And for exactly what kind of benefits really for the consumer?  Remember that you are handing your money over to a third party, a bank, a stranger to hold and to control.

Why do this when you can simply give cash  when you don’t know what to buy?]

Another possibility to consider in this economic climate is that a retailer will simply go out of business. Retailers that stay open as they reorganize under Chapter 11 bankruptcy may still honor gift cards. That’s what Borders did early this before it liquidated and closed its doors.

[ Some places may be honest and decent…..but read on because you shouldn’t expect banks and their partner companies to have integrity]

But companies can also choose to suspend the acceptance of gift cards.

To recoup the value on the card in that scenario, you’d have to file as a creditor, a process that could take months or even years to resolve.

[ And what was it that made you think that such a gift card would be better than simply giving cash money or even a simple homemade gift. We have learned in this economic crisis  (brought on by the banks themselves) that bigger isn’t better. The quality of time depends how much of you and your time you plan to give to loved ones.]

[Bake cookies, make soup and take that as a gift instead.  It is time to get creative in the ways you choose to show love to the people you love  and family you have to tolerate at holidays. Now is the time to give of yourself.]

[The Target AD says “Gift Cards: No Fees, No Expiration, No Kidding…. Jolly Times”…  if not now, at one time all the cards put out by Target were being managed by METABANK/BANK META…..Meta Bank simply wants to hold your money as long as they can. Meta Bank gets free interest from your money placed on the card and so does Target. For Target, to sell a gift card, makes the shopper who receives the gift card shop at their store exclusively.

That exclusivity is nice for Target; why not give cash money if you can’t give a homemade gift?]

[The comment beneath the Target Ad says,“Store gift cards like this Target poster is promoting can give recipients the freedom to pick out the items they really want, and relieve the giver from the stress of trying to find the perfect gift. / AP”….

What?  Does the gift receiver really want to shop at  this store?                                                                                                   Wouldn’t CASH money as a gift accomplish the same thing then for the gift receiver?

Gift Cards only really benefit banks and their partner companies who get interest free use of your hard earned money…… You have choices, but you need knowledge so that you can make wise choices. Don’t give gift cards, please]

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by mrnd5 on December 4, 2011  •  Permalink
Posted in Big Corporations and Banks run the world, Consumer Rights- consumers have no or few protections from predatory banking practices, Gift Cards are an interest free loan to an unknown bank, Gift Cards May be Suspended After Purchase and without notice, Holiday Gift Cards: have hidden fees, Money and Spending Wisely, Stay out of debt- don't get loans to pay off loans
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Posted by mrnd5 on December 4, 2011

https://mrnd5.wordpress.com/2011/12/04/cheers-fears-and-holiday-blahs-and-gift-cards-to-be-avoided/