Technical Difficulties!

Just a short FYI- we are  having some issues with posting articles- they show on my computer but apparently not on anyone else's! Tech support is working on this for us! Hang in there- we haved 2 of the 50-30-20 series ready for you and a third on it's way!

Check our Facebook page for coupon deals!

Thanks for your patience!

Karen

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Corn Shortage Interview

Despite being under the weather, it was fun doing an impromptu interview about corn shortage and resulting increases in grocery pricing. I would have liked to have been less pale and hoarse but  it all worked out! Now to work on getting our Facebook Page renamed to Saving in the Southwest!

Corn Shortage Leading to Higher Prices

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50-30-20 Series Part 2: What Are Your Thinking Traps?

Last week, we broke down how to categorize your finances. This week, we will discuss three areas:

1.       Explain why 50-30-20 is important as a financial formula, and why it works

2.       Show you where you are in each category

3.       Discuss THINKING TRAPS- the stumbling block of success, or BALANCE!

If you have formulated where you are as a picture financially, one thought that may be crossing your mind is “Why this formula? Why is this idea any better than any other plan to get me out of debt?”

Well, it’s pretty simple. I started this series telling you, I personally got myself out of 50,000 worth of debt. It wasn’t magic, I didn’t hit the lotto, no one helped me out- I just did it. I didn’t do it quickly, and it was hard. Fixing your money thinking is like changing your diet- you tend to be more comfortable backsliding!

Why specifically 50% on your NEEDS category?

1.        Anybody can live on Ramon Noodles for a week. You can’t live on it for your entire life- you would die from malnutrition- literally. You can go without water, unhealthy choice- but it can be done, for a limited amount of time. You can go without sleep for a limited amount of time- you can’t do it for a lifetime {Unless you expect your lifetime to be very short!} The same applies to your finances- you need to look at them just as seriously as you do eating, drinking, living. Think about what financial stress, or any stress, does to your body- even if you COULD live that way for a long time- why would you WANT to? We don’t- we just don’t know how to formulate a plan that includes really LOOKING at where we are! 50% of your income on absolute necessities is something everyone can manage as a goal. It leaves Fun Money and Savings money.

2.       It’s actually a safety plan for your everyday living. What if you got fired? What if you got laid off? What if, God forbid, you lost your spouse and main source of income? What would you do right this minute, looking at your finances? In this economy, it is absolutely possible to have your financial situation turned completely upside down in less than a day. Did you know that receiving an unemployment check is meant to cover your absolute essentials? Look at your 50% goal for your income. It is entirely likely that unemployment could take care of your NEEDS should you lose your job if your finances were in balance. Most disability checks from an accident do the same. If you are at 50% and your spouse loses their job, half of your income being lost you can usually survive with cutbacks. 50% NEEDS also allows you breathing room- which is worth so much more than the price of gold these days! It puts YOU in control.

3.       Last but not least, previous generations {as we talked about in the very first part of this series} lived and survived well on exactly this formula- half for needs, half for other things. In that era they put money away routinely, which was the norm.  Everything cost less, rates were lower-the list goes on.

Why 30% for Wants?

You DESERVE to have some fun in life, and relax and enjoy that money spent while taking care of bills and having money in the savings! Isn’t that what most of us want? Remember- this series is not about leaving everything and becoming self employed, becoming a millionaire, and living the dream life. This is about getting yourself OUT OF DEBT! This is about finding balance. You can’t even begin to get to the point where you can live a huge dream life until you learn to manage your finances to start with! You must have a budget that gives you a strong mental picture of what you need to work towards. So, half your money for bills, half of the rest for….What? Well, if we were to say put the other half in savings and have no fun, how long would that last? It would be like one of those fad diets that last about a month if you’re lucky. You must start with a budgeted amount of WANTS money, put a top cap on it, and stick to it NO MATTER WHAT. That doesn't mean borrow from your needs category. If you can give up money for a NEED- it better go to another need or into savings! Additionally, your WANTS money should not ever compete with your NEEDS money. There should be enough for both, with always the plan to cut first your WANTS money if something happens and your income situation becomes dire. You pay your NEEDS first, your wants after that –no exceptions. You would be totally surprised at how much less stressful it is to spend your 30% stress and worry free. It becomes enjoyable to give yourself permission!

20% Savings-- Really!? 

Yeah, so now we are at the part that people generally LAUGH at! 20% for savings! How is that even feasible in my situation, you ask?

Savings is at the end of your formula so you know how to find the money and what amount to aim for. With 50% for NEEDS, 30% for WANTS, it just happens that the remaining 20% goes into savings. I was SO skeptical of this when I first heard it from a gentleman that lived by the 20% rule. I thought it impossible, but I can personally tell you it is NOT. This happens when you get to 50% and to 30%. Just so it is clear, the 20% is something you do not start out with. You will start with where you are, then work towards 50-30. 

When you get to 50-30, the 20 just happens- it truly does. Why 20% into your savings? You need to let go of financial stress, especially for emergency or unexpected things happening. Imagine right now, today, something happening- perhaps you are living it. Car breaking down, plumbing, etc.- and you have money readily available to just take care of it, with no whipping out the credit card to do it! 20% is also an amount that you can gain a build up fast- it’s feasible. In this category it also allows for loan repayment, such as payments above your bottom line on bills. You are saving for your future by doing this. Savings is not only for your FUTURE- it’s also for you’re here and now. Many, many people do not look at savings as a way to live comfortably now- but you need it for your peace of mind.  You need a savings so you can grow older with smaller amounts of stress! You also need it to build finances and habits that last a lifetime. It works!!

The Breakdown

So, you have your own formula, correct? You know where you stand, and now you wonder – how bad am I with my formula exactly? The majority of people that I counsel are in the 80-20-0 range. Let’s break this down.

NEEDS:

Under 35%:  A+  and pretty self explanatory- you have a strict budget and you have not let your spending own you!

35-50%: Balance! This is actually where you want to be. It’s the place that your finances will start to work for you.

50-65%- You are headed for trouble. If you are in this category, and your must have continue to climb, you will be in real financial trouble that will take 3-5 years to get out of. Take action NOW to get yourself back under 50%.

65%+- You are headed for a crash. If you are over 80%- especially if credit cards are involved, you will end up in bankruptcy. It’s nearly a guarantee- IF YOU do nothing about it! If you are over 65%- you are probably living paycheck to paycheck, struggling, and you may not even know why. You are cruising along and you are telling yourself that everything will be ok, something will work out. You are headed for a crash and burn. We will talk later about how to cut down on some of te MUST haves to get you balanced. Hang in there – you will learn the tools you NEED!

SAVINGS:

Includes 2 things- Traditional savings plans, then paying off your debt {extra payments}. This is in the savings category because if you have $1000 in savings, you can grab it later. If you pay off $1000 credit card, you save the payment, the interest (Much higher than a savings account interest) and you are protecting your future and the money in your pocket at a later date.

20%: Amazing saver, you are on track!

10-20%, Fairly strong saver. You are on your way

6-10% You are on your way, but you need to get a little more aggressive with your security.

0-5% You don’t have any security. Your back up plan is not paying a bill, or using a credit card. This is going to upset every part of your balanced money formula.  You need a plan.

Less than Zero (In the negative) –We haven’t gone into this because the negative area is for people who have a tremendous amount of credit card debt, pay the minimum, but end up owing MORE at the end of one year than when they started. This is a special circumstance- if it applies to you, we need a 1 on 1 session of how to manage this! {You figure up your credit card debt 1 year ago, then now- and subtract the difference. If you owe $1200 more now than a year ago, you take the $1200, divide by 12 months, and add it to your MUST HAVE credit card bill in the NEEDS category}. I can provide more details if applicable.

WANTS

<20%: No fun, all work. You are going to have a heart attack young and not enjoy all you are working for! Okay, maybe that is drastic, but seriously- cut yourself some slack!

20-30%: Balanced!

More than 30%: You are splurging. If well over 40-50%, are out of balance somewhere else. Likely, if you are high on your WANTS category, your money is going out the door and you don’t really know where it is going. Adjusting here is the easiest category to fix!

Last but not least in Part 2- Thinking Traps!

Working on everything sounds great- but if you do not change your thinking, it becomes self defeating.

“I can’t save, I live in California, I am single, I have a lot of kids, my family is too large, I’m old, I’m so young, I don’t understand money.”

Oh, stop that inner voice!!! People from every walk of life have financial balance. You can too- you just have to know how! Recognizing your thinking traps is the most effective, and powerful way to fix your finances. No one grabs your bank and credit cards, or your checkbook, but you.  If you are in control, and not your spending, you will succeed.

Identify your negative thinking traps. Remember the times when you just started getting ahead, and something happens? Well- did you think in life everything would be easy without struggle and work? Of course not! Once you start thinking you can not do something, well, you are right- you can’t! Here are the most common of the traps:

1.       ALL or NOTHING “I will never stick to a budget. Why bother? I’m not getting anywhere anyhow.” These all add up to one thing- if you can’t be perfect, why try, right? Maybe you look at this formula and thing “Well, that’s not me.” Well, what portion of it COULD be you! Could you bring your 80% debt down to 70% immediately? Could you bring it down lower than that? Could you bring it down within the next 3 months- especially with income tax  returns looming, bonuses from work, etc? Could you go without that extra TV a package, or upgraded phone? Nearly everyone can. If you can not be perfect, be BETTER.

2.       Money is too Hard- I don’t understand it. Most people don’t want to hear me say this to them, but it’s true: If you are smart enough to make it, you are smart enough to manage it! I have counseled lawyers, bankers, homemakers, dentists, you name it. If you are a stay at home mom, you manage more jobs than most women in America. If you work outside the home, you make a hundred and one decisions a day. Let’s take an honest look- you would rather NOT look at your money because maybe it will all work out….right? Or, you know how to pay your bills and how to get one paycheck to another, but investing is out of your reach? Well, try investing in the most important thing you can invest in- you and your family!!! You have already taken a step to see your financial picture. Now you know where you stand!!! Next step: doing something about it! Find the RELIEF in that!! Knowing how to invest in the stock market is all great if that’s what you want to do, but you can’t get there without financial balance to begin with! If you have stuck with me until this part of the series, you are smart enough to figure this out. You are a genius for taking the step to see your financial picture. That is a fact! I once told a lady- do you go to the checkout line at the grocery and ay “Here’s all my money, I don’t know how much you want but just take it!” Of course not! Do you tell your boss “Pay me whatever. I don’t understand my paycheck anyhow!” Of course not there either. You are so much smarter than that- you are a brilliant, thinking human with the ability to stand up for yourself. Apply it NOW!

3.       Finger pointing: “It’s all my husband/girlfriend/boyfriend/parents fault. I didn’t get into this debt.” Maybe all of that is TRUE! Does it help pay the bills? Nah- not so much! The thinking trap here is telling yourself you are not responsible for the debt,  and you are giving yourself permission to keep spending when you shouldn’t be. There will ALWAYS be a reason why something effects your finances, but the reality is only YOU can stay focused and manage your money. When I was divorced, I was left with $35,000 that was not mine. I was furious, took bad advice from a lawyer, sued, was awarded a settlement- and to this day have NEVER seen a penny of it. Finger pointing was leading me to bankruptcy, and endangered me keeping my kids. I refused to go that path- there was absolutely NO way!!! Taking myself along this path was unhealthy. Deciding to balance my budget and live strictly by it was the best gift I have ever given myself and my children. How do you get past it? Well, I told my two babies they must get a job, I used the exes jeep payment to scoop dog poop out of the yard, I burned his credit card bills, and drew pictures of him with a dress on. When I was done with all that nonsense, I let it go, opened the next set of bills, and dealt with it. I accepted it was hurting ME, and put it in its place. I then went and got a second job, worked my tail off, and worked SLOWLY at fixing that crazy financial situation.

4.       Waiting for the Lottery. Really? You know where this one is going. You have a 1 in about  8 million chance of becoming a lottery winner. Here are the thinking errors: Your income is going up, so you will catch up someday. Inflation will not let you if you are over 65%- promise. You’re  young, it’s all good. Well, we were all young once, and the debt doesn’t go away – it accumulates! You don’t need retirement, it’s like, 70 years away! By the time you get to be 50 and want to start saving for retirement, it’s going to be a lean future! Deep down, you probably know these are not true. It’s another way of thinking about it later- like overall finances have been addressed. It’s not working- time for something ELSE!

5.       Last but not least- Counting PENNIES. You can’t get into financial balance by counting pennies. You have to count your DOLLARS. That $5 rebate or 30 cent coupon is not going to fix this. Spending countless hours saving pennies does not work for helping your finances. It’s not to say you should spend away- it means that if you are spending time on pennies, you are wasting valuable time on saving your DOLLARS. Would you rather spend 2 hours saving yourself $5.30, or 2 hours calling the utility company saving yourself $30 a month? That’s the difference between pennies and dollars!

How do you break away from these traps? Keep these things in mind:

1.       Identify your thinking trap. Name it, tell it YOU are in control!

2.       REMEMBER YOUR GOALS! Write them down so you see them every day.

3.       Fight your thinking trap. Point by point, remind yourself why your thinking trap is not going to WIN!

MAKE YOUR COMMITMENT THIS WEEK!!!!

Next week  we will cover:

·         Make your DOLLARS {not Pennies} work for you

·         Goal Setting

·         Where to make cuts

·         When it’s ok to stay above 50% on your NEEDS

·         When to revisit your formula

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50-30-20 Worksheet Is Up!

Please look under the Pages Tab- the Worksheet is up for you to figure your financial Formula!

January 20th Insert Preview!

Smartsource Coupon Insert 01

Almay $2/1 cosmetic product (2/24)
Alouette $1/1 cheddar spreads (3/24)
Baileys $1/1 non-alcoholic coffee creamer (3/31) DND
BelVita $1/2 8.8oz breakfast biscuits (3/9)
Boboli $1/1 pizza crust (3/31) DND
Campbell’s $1/1 skillet sauces (3/31)
Chef Michael’s $3/1 food for dogs (2/24)
Colgate $.50/1 4oz+ Total, Optic White, Max Fresh or Sensitive toothpaste (2/9)
Colgate $.50/1 adult or kids manual toothbrush excludes Plaus, Triple Action and Extra Clean (2/9)
Colgate $1/1 adult or kids powered toothbrush (2/9)
Enzymatic Therapy $2/1 Probiotic Pearls product (4/30)
Excedrin $1.50/1 100ct+ product (3/9)
Excedrin $1/1 24ct+ product (3/9)
Farm Rich $.75/1 18oz+ snack (3/31) 
Franks $.75/1 Redhot sauce (3/31)
Franks $.75/1 Redhot sweet chili or thick sauce (3/31)
French’s $.30/1 classic yellow mustard (3/31)
French’s $.50/1 spicy brown or horseradish mustard (3/31)
Gillette $2/1 disposable (2/28)
Glade $.75/1 Expressions fragrance mist starter kit (3/2)
Glade $3/1 Expressions oil diffuser starter kit (3/2)
Green Mountain Coffee $1.50/1 10 or 12oz bag (2/20)
Green Mountain Coffee $1/1 K-Cup packs (2/20)
Hebrew National $1/1 beef franks in a blanket (3/3)
Hershey’s $1/2 10oz+ Hershey’s Miniatures assortment, Hershey’s Kisses milk chocolate, Hershey’s Kiss cookies ‘n’ creme, Reese’s miniatures or York peppermint patties (3/15)
Hershey’s $1/2 8-10.5oz stand-up bags of Hershey’s Drops, Hershey’s with Almonds Pieces, Reese’s Pieces, Reese’s minis or Rolo minis (3/15)
Hormel $1/2 pepperoni packages (3/18)
Infusium 23 $1/1 16oz+ shampoo or conditioner (2/17)
Infusium 23 $2/1 8oz+ leave in treatment (2/17)
Irish Spring $1/1 6pk+ bar pack (2/9)
Irish Spring $1/1 body wash excludes 2.5oz (2/9)
Johnsonville $1/2 sausage (3/1)
Kozy Shack $.50/1 chocolate pudding (3/31)
Kozy Shack $.50/1 pudding (3/31)
Lloyd’s $1/1 barbecue product (3/18)
Mariani $.50/1 3oz+ dried fruit snacks (3/31) DND
Marzetti $1.50/11 Simply Dressed salad dressing (3/17)
MidNite $2/1 regular, for Menopause or PM (8/31)
Mt. Olive $1/1 pickles, peppers or relish (3/10)
Nature’s Way $2/1 Alive! multivitamin product (4/30)
Pepperidge Farm $.75/1 Baked Naturals (3/31)
Pepperidge Farm $1/1 Jingos! snacks (3/31)
Pert Plus $1/1 13.5oz+ 2-in-1 product (2/17)
Precious $.75/1 10oz+ Stringsters or Sticksters (3/31) DND
Progresso $.25/1 light soup can (3/16)
Progresso $.50/2 soup cans (3/16)
Reynolds $.50/1 slow cooker liners (5/31)
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Reynolds Wrap $.75/1 35sqft+ foil excluding Wrappers (2/28)
Similasan $2/1 ear care product (3/31)
Similasan $2/1 eye care product (3/31)
Similasan $2/1 kids care product (3/31)
Softsoap $.35/1 8oz+ liquid hand soap (2/9)
Softsoap $.50/1 28oz+ liquid hand soap refill (2/9)
Softsoap $.75/1 12oz+ body wash or 2pk+ bar soap (2/9)
Speed Stick $1/1 regular or lady antiperspirant/deodorant excludes 2oz, 1.4oz and .5oz (2/2)
Sunbelt Bakery $.75/1 granola box or fruit & grain bars (3/31) DND
Total $.75/1 whole grain or raisin bran (3/2)
Tylenol $1/1 cold product (3/31)
Tylenol $3/2 cold or sinus products (3/31)
Tyson $.75/1 breaded chicken strips (4/20)
Tyson $1/1 Any’tizers snacks (4/21)
Ultra Palmolive $.25/1 dish liquid (2/9)
Xenadrine $5/1 product (4/13)
Zevia $2/1 6pk (3/31)

Week 2: 50/30/20 Series Part 1: 2nd Half!

**Read through this- but do not panic! I will add a worksheet to simplify this for you later this week!

SO, I bet after writing down all your expenses that you kinda…sorta…  just wished you had gone to the mall to shop instead, right!? I have some GOOD news for you! This plan WORKS- and it’s a LIFETIME plan. You are investing in yourself, and your future. Now is the time to get EXCITED!

Here are some food for thought things to think about.

We briefly touched on the fact that the rules have changed over the years. Remember when Mom and Dad, and even Grandma and Grandpa built their home, and lived their lives? They were probably middle income families, and lived a middle income lifestyle, right? You know why they didn’t have a home to keep up with the Jones’ or a car that was the envy of the state? Because the bank would ONLY lend what they could afford!. Our parents and grandparents lived in a generation that you sat down with a banker, provided pay stubs, tax returns, your third child, etc.- and you had to JUSTIFY your loan right up front. If you couldn’t do it, the banker said NO. There were no “cash out” or “Zero down” mortgages, and car payments were not a standard $400 a month, and there was no such thing as leasing. Tuition at college was less than $1 a day, no one started adult life off with ginormous student loans. Jobs lasted for 20-30 years into retirement ages. They didn’t hear about layoffs, and their bosses either paid for health care insurance or didn’t offer it and health care was a manageable option for every family.

The result? They lived within their means, and just plain made it work! We do not live in that generation. We live in a generation that spends beyond our means, and mostly, beyond what we really NEED. We live in a generation that the rules have changed. We live in a generation that sets us up for financial failure before we even begin.

Guess what? That is NOT an excuse to be out of BALANCE financially! All you need to arm yourself with is that awareness- how you choose to live your life is entirely up to YOU! Now is the time for YOU to take charge!

Let’s help you get started!

PART A-Categorizing My Spending

 The first thing you will learn is you MUST categorize your spending. This is how we will break it down. Take that list of all your bills and payments from last week. On another piece of paper, divide into THREE columns. Label:

·         Column 1: NEEDS

·         Column 2: Wants

·         Column 3: Savings/Loan Repayments

It is now that you need to sort your bills into each category. They should be categorized as follows:

NEEDS Category- Rule of thumb-ask of each bill:

1.Can I live in safety without these things for a while?-Necessity

2. If I lost my job, would I have to keep spending money on this? -Necessity

3. Can I live without this purchase for 6 months? (Clothing budget, excessive grocery budget, etc.) Variable.

NEEDS Examples: Mortgage, rent, utilities, medical insurance, transportation, minimum credit card payments, CONTRACTED bills (cell phone that has 2 years left on it), groceries, daycare (If needed for job), employer deducted insurance/disability/life insurance premiums, bus/train transportation, car payment, auto insurance, gasoline, student loans, child support. Also include homeowners, insurance, renters insurance, property taxes (divide by 12 if paid yearly),  Prescription costs. Anything long term you have signed a contract for goes here(gym memberships, appliance payments, satellite –anything you MUST pay until the contract is UP),  Basic  phone (not call waiting, extras) go here also. CREDIT CARD MINIMUM PAYMENTS go here. Whatever you pay EXTRA goes under the savings/loan repayment column. However, if you pay off your credit cards every month, and it’s not for a NEED- put the Credit card payment into your WANTS category.

WANTS: Non contracted cell phone bill, cable tv, cleaning service, haircuts, new shoes/clothes, new furniture, monthly club dues, movies, eating out, babysitting fees (NOT daycare!), new pet in the family, car washes, massage, charity donations, video games, concerts, CDs, trips to vacation spots, dog grooming, camps, upgraded appliances (cappuccino machine, etc.), magazine subscriptions. (The food from your grocery bill that is not needed goes here: eating  out, alcohol, soda pop, power bars, steaks every week, etc.) IF you drop your child for after school daycare but could live without it- it’s a WANT. Christmas/birthday gifts go here. Again, , if you pay off 100% of your credit cards every month, and it’s not for a NEED- put the Credit card payment into your WANTS category. GYM MEMBERSHIPS go here- you can cancel a gym membership, even with fees, at anytime. It is a WANT. {Exception: if your fees to cancel the gym membership are higher than the remainder of what you have to pay monthly until your contract expires- then change this to your NEEDS column until it's paid off}

Savings/Loan REPAYMENT examples:

1^st category: Traditional savings, travel savings, college savings, 401k contributions (both yours and your employers), Christmas club. If this amount varies, add up last 12 months and divide by 12 to get your average.

2^nd Category: Debt repayment (Saving for your future): ANYTHING over the minimum payment on loan repayments/credit cards, extra yearly mortgage payments, etc.

IMPORTANT!! 

TO figure up your savings- take the amount of money you set aside for savings, and subtract your extra payments from it. For example, if you save 300 a month, but pay $200 a month in extra payments, your savings number is $300-$200= $100 you are saving. Many times this is a negative number (no savings and paying extra on payments- put the negative number down as necessary).

  **If you pay off your credit cards every month, put this in your needs or wants category and not here!

 Write each of your expenditures down in each column, and then TOTAL your columns. I bet before you start, you probably already have an idea of where you are heavy on your categories, but let’s make sure you have a total so you can figure your budget percentage later.

BE SURE TO ADD UP EACH COLUMN!!! Let’s move on!

PART B –Knowing where my numbers NEED to stand

What is the balanced money formula? 50-30-20.

·         Must-haves: My  MUST HAVES goal for my income should be at 50%

·         Wants: My spending on the things I want should be at 30%

·         Savings: My savings and loan repayment should be at 20%

**We will discuss in the next series why these numbers work.

Simple, to the point, effective: For a LIFETIME.

SO- What is your financial formula now, based on what you bring home AFTER taxes?

To start, look at that very first page from last week and look at your income. (This is your TOTAL INCOME minus TAXES). Math time!

1.       Take your TOTAL AFTER TAX income, and multiply it by 50% (income x .50) This is your goal for 50% NEEDS- write it down at the TOP of your NEEDS category.

2.       Next, calculate your after tax income by 30% (income times .30)= 30%- write this at the top of  your WANTS category.

3.       Last, calculate your savings and loan repayment category (income x .20)= 20% of your after tax income.  Write this at the top of your savings category.

PART C –knowing where my BUDGET stands NOW

At the BOTTOM of each column, you are going to write a number.  {Examples are based off a 20,000 income- example only!}

1.       Column 1 (Needs) –take  your total in this column of your budget that you spend on NEEDS, and divide it by your TOTAL after tax income. So, it looks like this:

               14,000 worth of bills (Needs) divided by 20,000 (after tax income) =.70 (write down 70 percent)

2.       Column 2 (Wants) –take your total in this column of your budget that you spend on WANTS, and divide it by your total after tax income. Write that number at the end of your WANTS.  It would look like this:

5400 (Wants) divided by 20,000 (after tax income)=.27 (write down 27%)

3.       Column 3 (Savings/Loan repayment) –Remember to take your savings and subtract your extra loan repayments to get your savings number.

Then, take your total in this column and again, divide by your total income after taxes. It would look like this:

$600 divided by 20,000 (after tax income) =.03 (write down 3%)

SUMMARY

By looking at each totaled column, you now see what you ARE be spending, and you have now figured out what you SHOULD be spending- how close are you? Are you balanced at 50/30/20? My guess is…probably not- most of us take a while to get there! The good news!? That is your goal!! Do you now see why you have been doing that head beating against the wall with your finances and getting nowhere?

BALANCING YOUR MONEY IS THE KEY TO HAVING ENOUGH.

A couple key points:

1.       It takes on average 3-5 years to get to a 50-30-20 balance. Some people are able to get there in 1-2, but generally, it takes longer. This is normal!

2.       Is it ok to drift from this formula at certain times in your life? Of course it is! If you are laid off, clearly your income must go to your MUST haves while you cut back on your wants and savings- FOR A TIME. Remember, finding balance can take 3- 5 years!

3.       This formula is not meant to make you feel discouraged about where you are. It is meant to ENLIGHTEN! Keep your head up- there is a light at the end of this tunnel!
T   There are special circumstances if you carry a lot of credit card debt. We will have to adjust your actual NEEDS category accordingly. We will address this later. 

Next week, we will:

1.       Explain why 50-30-20 is important as a financial formula, and why it works

2.       Show you where you are in each category

3.       Discuss THINKING TRAPS- the stumbling block of success, or BALANCE!

Until then, do your calculations to look at your picture! Feel free to leave any comments below if you are unsure of where an expense should be categorized!

Karen 

01/13/2013 SS and RP Insert list!

2 inserts this week- here is the list for those of you who like to print them off! 

Smart Source 1/13/13

Activia $1/1 4pk (3/3/13)

Airborne $1.50/1 product (4/13/13)

All You $.50/1 issue (4/26/13)

Almond Accents $.50/1 3.5oz+ package (3/31/13)

Alouette $1/1 cheese portions (3/31/13)

Alouette $1/1 light spreadable cheese (3/31/13)

Berkeley Farms $.50/1 gallon or half gallon Trumoo (2/23/13)

Birds Eye $.50/1 C&W variety (2/28/13)

Birds Eye $.50/1 Steamfresh Chef’s Favorites (2/28/13)

Blink $1/1 Tears or GelTears (2/28/13)

Campbell’s $.40/2 condensed soups excluding chicken noodle, tomato and great for cooking (3/15/13)

Campbell’s $.40/4 condensed chicken noodle and tomato soups (3/15/13)

Campbell’s $1/1 Go soup (4/9/13)

COMPLETE $1/1 12oz+ solution (2/18/13)

COMPLETE/Blink $1/1 COMPLETE Blink-N-Clean lens drops or Blink Contacts lubricant eye drops (2/18/13)

Contac $1/1 Cold+Flu product (3/31/13)

Cottonelle $.50/2 flushable moist wipes ets (2/9/13)

Cottonelle $.50/2 toilet paper 4pks or 1 9pk+ (2/9/13)

Depend $1/1 guards for men (2/23/13)

Depend $1/1 product ets (2/23/13)

Dreamfields $.55/1 pasta (3/16/13)

Duraflame $3/1 firelogs dnd (2/28/13)

Edge $2/2 7oz+ shave gels (2/10/13)

Gain/Era $.40/1 Gain detergent or fabric enhancer or Era detergent ets (2/28/13)

Gain/Era $1/2 Gain detergent or fabric enhancer or Era detergent ets (2/28/13)

Gas-X $1/1 product (4/13/13)

Gas-X $2.50/2 products (4/13/13)

Gevalia $1.50/1 coffee (2/9/13)

Glade $1.50/1 Plugins Scented Oil twin refill or 2 single refills (2/9/13)

Glade $1/1 Decor Scents holder (2/9/13)

Glade $1/1 PlugIns Scented Oil warmer or starter kit (2/9/13)

Glade $1/1 Sense & Spray starter kit (2/9/13)

Glade $1/2 Decor Scents refills (2/9/13)

Glade $1/2 Sense & Spray refill (2/9/13)

Glade $2/2 4oz jar candles (2/9/13)

Goodnites $2/1 underwear jumbo pack+ (2/9/13)

Huggies $.50/1 56ct+ baby wipes (2/9/13)

Huggies $1.50/1 diapers (2/9/13)

Huggies $2/1 Little Movers or Little Snugglers diapers (2/9/13)

Jello-O $.80/2 refrigerated snacks (2/10/13)

Jergens $1/1 4floz+ moisturizer (2/19/13)

John Frieda $3/2 Frizz-Ease frizz eliminators, styler or finishers excludes shampoos, conditioners, trial sizes, appliances and brushes (2/9/13)

Jolly Time $.50/1 microwave popcorn (2/28/13)

Ken’s $1/1 16oz dressing (2/28/13)

Kleenex $.50/3 50ct+ or 1  bundle pack ets (2/9/13)

Kleenex $1/2 hand towels (2/23/13)

Kotex $1.50/2 Natural Balance products excludes 14-22ct liners (2/23/13)

Kotex $1/1 U liners excludes 14-22ct (2/23/13)

Kotex $1/1 U pads ets (2/23/13)

Kotex $1/1 U tampons ets (2/23/13)

Mott’s $.55/1 Snack & Go pouch 4pk, or single-serve applesauce or medleys 6pk cups (2/24/13)

Ortega $.50/2 products (3/31/13)

Planters $1/1 peanut butter jar (2/10/13)

Poise $1/1 hourglass shape pads (2/23/13)

Poise $1/1 product (2/23/13)

Poise $3/1 feminine wellness product ets (2/23/13)

POM Wonderful $.50/1 4.3oz or 8oz fresh arils dnd (3/31/13)

POM Wonderful $.50/1 pomegranate dnd (3/31/13)

Prevacid $2/1 24HR product (2/24/13)

Prevacid $6/2 42ct 24HR products (2/24/13)

Pull-Ups $.50/1 flushable moist wipes ets (2/9/13)

Pull-Ups $1.50/1 training pants jumbo pack+ (2/9/13)

Real Simple $.50/1 issue (4/12/13)

Revlon $1/1 eye product (2/27/13)

Revlon $1/1 lip product (2/17/13)

Revlon $1/1 nail enamel (2/17/13)

Revlon $2/1 foundation, powder, BB cream, concealer, blush or primer (2/7/13)

Schick $2/1 Intuition razor or refill (2/23/13)

Schick $2/1 Quattro disposables pack (3/3/13)

Schick $2/1 Quattro Titanium razor or trimmer (3/3/13)

Schick $2/1 Quattro Titanium refills (3/3/13)

Schick/Edge Buy Xtreme3 disposable, get one 7oz+ Edge shave gel free up to $2.99 (2/10/13)

Schiff $1/1 vitamin supplement excludes Move Free and Digestive Advantage (4/13/13)

Schiff $3/1 Move Free (4/13/13)

Scotch-Brite $.75/2 scrub sponges, scour pads, dishwands and dishwand refills (2/8/13)

Scott $.50/1 Naturals flushable wipes tubs or refills (2/23/13)

Scott $1/12+ extra soft bath tissue (2/23/13)

Scott $1/2 8pk+ 1000 tissue or 1 16pk+ (2/23/13)

Scott $1/6+ towels rolls (2/23/13)

Scrubbing Bubbles $.75/1 all purpose cleaner with fantastik (2/24/13)

Scrubbing Bubbles $.75/1 bathroom cleaner with color power technology (2/24/13)

Scrubbing Bubbles $.75/1 mega shower foamer (2/24/13)

Scrubbing Bubbles $1/1 Fresh Brush refill (2/24/13)

Scrubbing Bubbles $1/1 total kitchen foaming all purpose cleaner with fantastik (2/24/13)

Scrubbing Bubbles $1/2 bathroom cleaning products (2/24/13)

Scrubbing Bubbles $3/1 Fresh Brush starter kit & caddy (2/24/13)

Scrubbing Bubbles $5/1 automatic shower cleaner (2/24/13)

Scrubbing Bubbles B1G1 free toilet cleaning gel up to $3.99 (2/24/13)

Skintimate $.55/1 shave gel or shave creme excludes 2.75oz cans (2/24/13)

Smart Balance $.50/1 spreadable butter or blended butter sticks (2/27/13)

Smart Balance $1/2 buttery spreads (2/27/13)

South Beach Diet $1/1 snack bars or sweet delights (3/31/13)

South Beach Diet $2/1 smoothies 4pk or meal bars (3/31/13)

Viva $.50/1 or more paper towel big rolls (2/24/13)

WhoNu? $.55/1 cookies (3/10/13)

Windex $.55/1 multi-surface cleaning product (2/24/13)

Windex $1/2 glass cleaning products (2/24/13)

Ziploc $.55/1 Perfect Portions bags (2/23/13)

Ziploc $1/2 bags (2/23/13)

Zone Perfect $1.25/1 5ct box (2/16/13)

Red Plum 1/13

Arnicare $1/1 2.6oz gel (3/31/13)

Dial $1/1 12oz+ lotion product (2/10/13)

Dial $1/2 6oz+ regular or for men body washes (2/10/13)

Dial $1/3 liquid or foaming hand soap or 3pk+ bar (2/10/13)

Fleischmann’s $.40/1 3-strip pizza crust yeast (4/30/13)

Garnier $2/1 moisturizer (4/6/13)

Garnier Fructis $1/1 conditioner or treatment ets (2/23/13)

Garnier Fructis $1/1 shampoo ets (2/23/13)

Garnier Nutrisse $2/1 Nourishing color foam (3/9/13)

IHOP At Home $1/1 frozen breakfast item (5/13/13)

Jimmy Dean $1/1 sausage crumbles (2/24/13)

Kettle $1/2 4oz+ Bakes (3/16/13)

L’Oreal $2/1 EverCreme, EverCurl, EverSleek, EverPure or EverStrong shampoo or conditioner (3/9/13)

L’Oreal $2/1 EverCreme, EverCurl, EverSleek, EverPure or EverStrong treatment (3/9/13)

L’Oreal $2/1 EverStyle (3/9/13)

L’Oreal $3/1 Preference shade (3/9/13)

Oscillococcinum/Coldcalm/Chestal $2/1 adult or childrens product (3/31/13)

Pup-Peroni $1/1 5.6oz+ dog snacks (3/15/13)

Purina $3/1 ONE beyOnd dog food (2/13/13)

Purina Free 16oz ONE beyOnd cat food carton up to $3.25 or $3.25/1 3lb+ cat food bag (2/13/13)

Superpretzel $.50/1 product (2/6/13)

Superpretzel $.501 pretzeldogs product (2/16/13)

Weight Watchers $.55/1 sweet bakery product (3/31/13)

Wisk $1/1 45oz+ laundry detergent (2/24/13)

50/30/20 Series Part 1:“It’s time to stop worrying, and start living.”

First, let me start by saying WELCOME! Super happy you are joining us for this money saving series!

This first post is the first HALF of part 1 in a 6 part series. I thought we would start off with this for thought: Any money saving, successful plan that you have should be for a LIFETIME, and not just a quick fix. This series is not about getting rich quick, about investing into the stock market to hit the jackpot, and it’s not about winning the lottery!

So, let’s begin with getting our hard look at money out of the way. The reality is, we live in a tough economy, and times are just not what they used to be. In your gut, you know that times have changed. I remember my grandfather saying “Old fashioned hard work pays off, Eyuh. You’ll git everything you need if you work Sun’up to Sun’down!!” Well, Grandpa, come into our unstable economy where having a college education now means there are no jobs and you might be working at Walmart as the greeter with your Fine Arts Degree! Real financial peace seems so hard to achieve! With the reality of changed times also comes the reality that you now have to count on yourself to make your finances work.

The level you take this thinking to is your own responsibility. DO you just want to get out of debt and live a balanced life? Or do you want to succeed to the point that you work for yourself? Your goal should be at the forefront of your mind every single day! This series is about getting started.

Just for a little perspective, and background on my financial path, I will share with you a little about how I managed to leave behind me a LOT of debt, as a single Mother, and how I see my own finances today

.

Many of you already know that I am quite the Coupon gal- I use coupons to get much of my NEEDS for free, or pennies. I have been doing that routinely for about 13 years, and have dabbled off and on with coupons for about 20 years. I want to say right off the top- this series is NOT about using coupons to get yourself debt free (Although that IS possible!). As we will discuss later, if times are dire enough, and you want to get out of debt badly enough, you will find any reasonable means that you can to increase your income. That just happened to by my resource at the time- and I now excel at it as a hobby! So finding my own self-worth, capitalizing on it, and taking ACTION- all were very key points.

My financial downturn really started after a nasty divorce- I inherited about $35,000 of debt, agreed to some terrible financial advice from an attorney and spent my savings, and topped it all off with using credit cards to accrue another $15,000 of debt- my grand total of debt  was about $50,000. This is not something I will justify or am proud of- it was just the reality of where I was at the time. The really telling part of my situation was a conversation with my mother- I found I couldn’t answer a simple question: “Where is all your money going, and how are you managing?” I realized that I was living my life paying off my bills, and living on whatever was left. I had no plan other than to pay off the debt to keep my head above water. It didn’t take long for me to realize I was headed for a crash and burn.  

Now when you are a single mom, your daily fear is falling on your face and not making it, losing your kids, and losing everything you have. Losing everything I had was really minimal compared to the fear of losing my kids-that was unacceptable. I took that fear, and made it my absolute driving force to get myself out of debt. I began reading financial series, attending financial (Free) seminars, watching tv infomercials, etc-and I came to a realization. Many of those series were geared towards already having money, already investing {what the heck IS a mutual fund!} and it was not speaking to ME! I didn’t give up though- and kept going  until I found a formula that made sense to me. One day I saw a show that talked about finding balance in your finances, and the man repeatedly talked about “Paying yourself first.” I thought “HOW SELFISH! How can you take care of you first and then worry about your house payment! Is this man an idiot!? He can’t have ever been in debt!” Well, I listened a little further, did some online research, and found out this man was a multi-millionaire, who started out with three times my debt –on less of an income! So much for my self righteous bubble!

I went on to do some further research, and for me, combined a variety of financial plans into a map that would work for me. 2 years after I started, I found a book on the exact subject! A woman and her daughter wrote the same plan, although they very much fine tuned it! Talk about validation on your choice to get onto a path to your goal! I used my own research, combined with theirs, and have paid off the debt that was weighing me down.  Now this does not mean I am a millionaire, it doesn't mean I am debt free, and it doesn't mean I am not still a work in progress! This takes TIME! I didn't get into debt in a month, a year, or 2 years! The work you put into this is the work you will get out of it!! Also, when certain life experiences happen, your formula can change abruptly. This is a general guideline for you to follow to get yourself on the right path.

I share this because I want each of you to know that I have been there. It is hard work to change your financial frame of mind. This series is not about making you a millionaire on your $30,000 a year income.  It’s not about retiring at age 40, or putting $5 a week away into savings to become rich, or changing to "generic" everything to save your budget. This series isn't about pinching pennies either- because all that really leads to is arguments and gets you distracted! This is about getting your DOLLARS to work for YOU!  

With all that said, what if I told you that I can teach you how to pay your bills, without worry or fear? Then, what if I told you that you can have some money for fun, without worry? Then, what if I went one crazy step further and told you that the cherry on top was that you can have a rainy day or savings plan without worry or fear? Think that’s a train you could jump on? I did it – and so can you. BALANCE. Write that word down, and REALLY understand that is the direction we are headed with your finances.

The first lesson I had to REALLY be open to was to entirely CHANGE the way I thought about money! Managing money, once in BALANCE, becomes automatic- I promise! Balancing your money isn't about making money your life true obsession. Money isn't really the goal at all. Chasing lots of money isn't a substitute for a real life. Not having a financial goal, though, CAN and will take over your life in the form of WORRY, worry, worry….top that with most of our negative money ways of thinking: 

“I am a single mom, so I will never be rich.”

Really?  Says who?  

“My family doesn't come from money, so I don’t expect to live any differently than they do.”

Do you see a problem with this kind of thinking? If you tell yourself you are living without means, then that is EXACTLY how you will live. If you change your mindset to “I can and I will," then with a little hard work, you will do it. It’s your choice!

One BIG POINT here: If you hit yourself against a cement wall – it hurts, right? If you keep hitting your head against that wall, will it still hurt? My guess is- YES! So, if you keep hitting your head, do you expect a different outcome? You should expect what you get out of your actions- pain with hitting your head, right? If you are spending and planning, and spending and budgeting and it’s not working, that is the equivalent of hitting your head repeatedly- and expecting a different outcome!  It’s time to readjust your thinking, and be open to a new plan. If you are here because you are doing “ok,” but want to be financially sounder, it’s VERY likely you are still addressing your finances in the “Cement pounding” way. We will revisit mindset later in the 2nd part of our 6 part series.

SO! Let’s GO! Today we start the first half of Part 1 {of 6}: Evaluate Where I Am!

  **TIP: DO not skip any one of these steps. Portions of them will be needed later on! 

Let’s start with your probable reality: “I can think all I want how abundant my money is, but the bills are piling up!”  ~My cup does not runneth over!

We can not discount this. The bottom line is, you can’t start onto a path of financial success until you know where you are presently. To do this, you MUST have a budget. Not  “Let’s pay the bills then see what’s left” plan either- that is NOT a budget!!!!  You need a reality check as step ONE. Let’s figure out your income and your spending!

Step 1:  Write down every single  penny that comes in as your income. This means your family paycheck, side family job, 2^nd job income, your child support, your monthly stipend from source X,  disability- you name it.

     -IF you do not have a normal, set monthly income, and get a varied check each month, take  your last 6-12 month total and divide it by 6 to 12 months, depending on how many months you have worked in the last year. That’s your monthly income.

     -Now take out your taxes. This is your AFTER tax income, and the number that we will be working with. So again, figure your income up, look at how much is being taken out in taxes, and set this as your AFTER TAX INCOME. Add onto this the deductions from your salary- that is, your 401k, your insurance deductions, disability deductions, etc). This is your TOTAL After Tax Income. 

Step 2: Make a list of every single current BILL that you have. This means everything you MUST pay. This list should include anything at all that you write a check for each month, is taken out of your check automatically (401k, etc), yearly home taxes (divide by 12 to see where it fits into your budget). Also include such things as daycare, mortgage/rent, utilities, your credit card payment, tuition, loan payments, phone, cable, cell phone, church donations, groceries, clothing, eating out, savings account deposits,  ANYTHING you have been spending routinely every month. You may have to look back at 30 days of checks, or your bank account ATM/Debit/Credit card spending. NOW is the time to put it all onto paper!

We are going to stop here this week. Grab all your bills, your check book, your bank account, and get these written down. Write down your TOTAL Income, your AFTER TAX Income, and then all of your "Bills"/spending/saving/payments. Bring this with you next week! 

Oh and I know what you are thinking: EEEK! Well, don’t look at it as depressing to see your finances on paper- look at it as the first step to financial BALANCE! 

Until next week,

Karen