My own money resolutions this year include cutting out even more conventional items for green items which can cost more but not if you plan well. Also, I need to set aside more cash in savings. I’d like to have a total emergency fund set up, and don’t quite yet, so I need to work on it.

If you need help choosing some money resolutions for 2010 check out these resources…

• Setting Financial Goals for the New Year
• Money Goals 101 – setting priorities
• Tips for money goals from Dave Ramsey
• Some cool money goals to consider
• Got a goal to buy less stuff in 2010 – try these tips
• Practical Goals Toward House Buying
• Money goals for kiddos

What are your 2010 financial goals?

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Post from: Thrifty Mommy

In good news a recent study shows that a larger majority of women, not men, control the family budget – but only by a little bit and other research shows that while women do take over the family budget they’re leaving the investing issues i.e. decisions related to mutual fund, stocks and bonds up to men, which is not smart.

All women need to practice smart money management by doing the following…

Practice trust but not at your own risk. Trust in a marriage or partnership is swell, but believe it or not, even if you think your relationship is on solid ground, bad things can happen. Assuming you’ll always be in a two income family and not planning for survival as a one income family is a serious money trap that people fall into. Trust your partner sure, but make sure you have a backup plan in place.

Learn about all aspects of money. If you’re already one of those 62% of women who handle the family day-to-day budget, great. If not you need to learn how to manage and balance the household budget. If you’re investing, keeping up on your retirement fund issues, and your name is signed on as owner of a major item (say a house) then you also need to know how to manage all of those budget issues.Read Your Money or Your Life to get a general overview of money and how it affects your life and also read Make Money, Not Excuses: Wake Up, Take Charge, and Overcome Your Financial Fears Forever which offers easy tips about managing your finances.

Keep tabs on your credit report.

Put yourself first: In this day and age people gasp when women put themselves before their kids, but guess what; there are hundreds of ways to score cash for college and zero retirement loans out there. Your retirement funds comes before your child’s college fund. If you can afford to sock away for both super, but it’s more beneficial for your kids in the long run if you can take care of yourself when you’re old.

Have some money goals: Whether your goal is to make money like a man, save more, buy a house, or pay off your debt it’s healthy to always have a money goal or two going on. Money goals, even small ones allow you to stay focused on finances frequently and keeps you sharp.

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Get Rich Slowly has two suggestions that should work for everyone…

“Choose one specific, tangible goal to “catch” all extra income.” If you choose goals ahead of time you’ll be less liekly to waste the surprise money you get. This obviously works better if you choose a goal you’re invested in such as paying off your home or building a family vacation fund. Don’t be vague such as, “Extra money will go to bills” which yeah it might, but normal money goes there too. Make a plan so that if your bills are paid when surprise cash flows in you still save most of it.

“Allocate a pre-determined percentage to “blow” money.” This helps you feel more satisfied without blowing a lot of cash. If you get a large bonus you may want to allocate about 30% to blow and the rest to save. For a smaller windfall, you might want to break it up more evenly – say 50/50. Everyone, even thrifty people need to blow some cash once in a while and this is a smarter way to do so.

What do you do with unexpected money?

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It can be hard at times to make smart money decisions but the rules you should follow are basic, not crazy weird or tricky. If you follow some bare basics you’ll be able to live thrifty, save money, and not build up a bunch of debt. For example…

Buy less stuff - I guarantee that most people in America buy more stuff than they need. I’ve bought stuff I don’t need, my thrifty pals have, and some people I know buy WAY more than they need then complain about their budget. People do not need four TV, 15 pairs of shoes, a home with three bathrooms, and countless books. People don’t need soda pop, fast food, or to go to the movies once a week. The first step in living thrifty is to be honest and realistic about the items you actually need and buy vs. the items you don’t need and buy anyhow. SOME extras are nice, but too many is a major downfall of most budgets.

Limit waste – like buying too much or buying too many unnecessary items, wasting is another great way to cramp your budget. Use items until you really can’t. Don’t upgrade to a newer more expensive phone or car or home unless it’s actually necessary. Fix items before buying new and use reusable items (like cloth napkins and containers) over disposables (like paper towels and plastic wrap).

Make more money – this tip seems silly for the economy but if you don’t have enough money you one, need to make more, or find a way to save more. Honestly, it’s usually easier to save more. Consider how much a second job costs your two parent family. Think about the costs of working longer vs. shorter hours when you’ll need to pay for day care. Sometimes the best way to have more money is to let a second job in the family go – obviously not a realistic answer for one parent homes, but something to think about in a two parent family.

There’s also the option of looking for a new job for more money or to cut costs – for example a job that pays the same as your current but is closer to home and doesn’t require dressy clothing is a money saver. Right now people feel they don’t have may employment options, I know, but if your job is truly the reason why you never have any extra money something does need to change. You can even consider learning a new skill or going back to school.It’s very hard to make significant changes when it comes to your career, but unless you want to live as you are now, you have to consider other options – plenty of people make these changes and it can work in your favor.

Buy less, limit waste, and find a way to get more cash in your pocket. Good rules to follow if you want to live thrifty and save more.

What are some other good money saving rules you use?

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• Capital adequacy.
• Asset quality.
• Profitability.
• Liquidity.

Of course you shouldn’t rely on one system when choosing a bank. You should actually head into the nearest branch, look around, talk to some folks, and so on, but getting a basic overview of a bank’s financial health is a good kick-off point.

The site is easy to use and when I filled in the name of a bank it didn’t do anything lame like say, “After you give us your email you can see the rating” I saw it right away. Nice. Plus they make the ratings easy to understand, using a basic star system (shown above).

According to Bankrate, the ratings, “Are comparisons to both industry peer norms and standards. In a very small number of instances, operating strategies that differ from industry norms may lead to ratings that are not truly reflective of an institutions’ financial condition. A Safe & Sound rating of one or two stars does not suggest that we believe direct regulatory action is imminent or even likely but rather only indicates that certain below-average performance factors have been found during the applicable rating cycle. Quarterly updates of Safe & Sound ratings allow us to monitor changes that may occur, and ratings may fluctuate on a quarterly basis.”

So if your bank has lost one too many checks or the tellers have zapped the last of your strength and you’re looking for a new bank, head to the Safe & Sound rating service to see how other banks stack up.

[image via Bankrate]

Post from: Thrifty Mommy

Having been with a gambler in the past I can honestly say that it’s JUST like cheating, only your partner’s not dating another woman they’re dating the casino or slots or what have you.

Karen’s list has some points that may mean your partner is cheating OR it could mean he’s gambling, such as…

• An unusual increase of ATM withdrawals and/or credit card cash advances.
• Failure to mention overtime, bonuses, or an increase in pay.
• A liquidation of assets such as IRAs, saving accounts, money market accounts, etc.
• Avoidance of discussing money issues, the family budget, and spending habits.
• A decrease in the amount deposited from his paycheck.
• Running out of money before the next payday.

What else points to gambling?

Honestly, after having such a bad experience with another person who gambled, I HATE any gambling, but technically, you can gamble and not be addicted to gambling. Gambling, real honest to goodness addictive gambling is considered to be gambling  that disrupts your normal life or someone else’s life – i.e. your finances, your relationships, your emotions, your health, and more. Basically if gambling causes problems it’s a problem.

Following are some more signs that your partner may have a gambling problem…

• They blame you for their money problems.
• They are extremely defensive about their gambling.
• They get angry when you ask them to stop gambling or even to cut down.
• They’re gone for long unexplained periods and don’t call – many gamblers who hang at casinos loose total track of time. I’ve personally seen someone lose literally days at a casino.
• They skip work to get to the casino.
• They steal money from you, their friends, the family budget, and even from their kids.
• They may have major personality changes that vary from depressed to angry to violent.
• You feel the need to hide money from your partner.

If you notice the signs above the best thing to do in my opinion is to try and talk to your partner and if they won’t get help willingly then you need to think about you and your kids and make plans to leave. Not one person I know who have been involved with a gambler has one of those happy ending stories. It usually ends badly and will leave you financially vulnerable.

Resources:

• More signs that your partner may be a problem gambler.
• Gam-Anon for the spouse, family or close friends of compulsive gamblers.
• Support for the gambler.

Also, because I’ve often seen relationships where gambling and domestic violence go hand in hand you may be interested in basic facts of domestic violence, what intimate partner violence is, how you can assess if your relationship is abusive, plus find resource for support if you need help.

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Assuming you’ll always be a two income family and not planning for survival as a one income family:

SO many things can happen to a two income family. Couples break up – yes even when you don’t see it coming, people get sick and can’t work, people get pregnant and make a decision not to work, layoffs occur, and sadly sometimes the worst happens and one of a couple dies. The problem is that too few people plan for one income living, when they should be planning now.

You should ALWAYS have a good emergency plan in place that includes many months of expenses saved up, life insurance in place for both mothers and fathers, and a general idea of what you could do to make more money or cut expenses should the worst happen. It’s not fun to think about this stuff, but if something does happen you’ll be glad you did.

Not being prepared for a medical emergency or crisis:

In general, most families are luckily healthy and doctor visits involve basic care only. However, if someone in your family did get seriously sick or injured could you afford it? Research out of Harvard found that 62% of all personal bankruptcies in the U.S. in 2007 were caused by health problems—and 78% of those filers had insurance. This partially plays into the trap above, not planning for one income, but there are other issues at stake as well.

If you want to manage medical emergencies you should splurge on health insurance above almost all else. Yes it can cost more on an on-going basis, but should something happen you’ll be super glad you did buy lots of insurance. However, it’s not enough to simply buy more health insurance, you also need to really read the fine print and choose plans that are right for your family.  You also should consider disability insurance so you’re protected ongoing should you be hurt and unable to work. Additionally prevention is one of the cheapest solution here. Stay healthy, exercise, eat well, and be smart – i.e. don’t drive drunk.

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Post from: Thrifty Mommy

• An unusual increase of ATM withdrawals and/or credit card cash advances.
• Failure to mention overtime, bonuses, or an increase in pay.
• Unusual purchases to places such as flower shops, jewelry stores, women’s clothing stores, etc.
• An increase in cell phone minutes used, possibly going over the monthly limit.
• A liquidation of assets such as IRAs, saving accounts, money market accounts, etc.
• Avoidance of discussing money issues, the family budget, and spending habits.
• An increase in spending for things such as gasoline, eating out, clothing, and hygiene products.
• A decrease in the amount deposited from his paycheck.
• Running out of money before the next payday.
• Salary discrepencies on the W-2.  This goes along with the issue of money earned versus the overtime he claimed he was working.  Also, look for unexplained business travel expenses.

Other helpful resources:
Infidelity Advice
Women’s Divorce: Signs of Cheating
Divorce Hq:  How to Tell if Your Spouse is Cheating

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Post from: Thrifty Mommy

They say opposites attract and I guess that can be true of friendships as well.  I have had three close friendships.  I’m talking tight, share all secrets with girlfriends.  All three of these ladies had issues with spending.  After being friends with them for a while, I noticed that all of them began to tone down their spending, their impulsive shopping, their wild credit card spending, and they began to look for bargains on the things they purchased. 

Of course when you are close friends with someone, you talk about life.  You talk about the things you buy, the reasons you buy them, what your long term goals are, what you’re saving for, and if money is tight you talk about that too.  Here are some things I have mentioned to my friends that I feel has caused them to be more aware of their spending:

• My objection to car payments – Try to save for a vehicle, pay cash if possible, finance as little as possible, don’t go for a high dollar car, and also the crazy depreciation rates.
• Don’t charge it – Basically, if you can’t afford to pay cash for it, you don’t need it.
• Impulse shopping – Avoid making impulse purchases. Think about it.  Plan for it.  Decide if you can afford it.
• Comparison shop – Look around for the best bargain.  Shop the sales.
• Use coupons – Try to use coupons on groceries, dining out, and entertainment.
• Plan for the future – Leave within your means and save for the future.  Save for a rainy day so that you don’t have to use credit for emergencies.

Have your finances affected your friends?

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His comment really got me to thinking.  Would someone really be a renter forever?  Here are some reasons why I don’t believe you should rent for life.

1)  You will always, always have a payment.  When you are 65 years old, you’ll still be paying rent.  This is a time in your life when your income will be limited and you won’t need extra payments.  Will you be able to afford your medication, rent, groceries, and utilities?

2)  The cost of rent will continue to increase.  Just as inflation goes up, so will cost of your rent.

3)  You get nothing for your money.  Figure it out.  If on average you pay $1200 per month for rent for 40 years, that’s $576,000.  Yes, I said $576,000!  And the $1200 per month I figured is a generously low estimate.

4)  There is no return on your money.  Not only do you get nothing but temporary housing, but your money is not being invested.  Think of all the older folks you know that paid $22,000 for their homes.  They’re paid off and their homes are now worth 10 times more than they paid for them.  If they get into a financial bind, they can always sell their homes.

5)  You’ll have something to leave your spouse and children.  When I was a teen, my friend’s dad died.  I was shocked to find out that her dad had made some very poor financial decisions, one of which was renting the same house for about 20 years.  This house was only worth about $50,000 at the time.  After he passed away, he left his wife with little to no insurance and his wife had to figure out how to make it on her own, which included the extra burden of rent.  Thankfully, she was able to get a low-income loan, but it was not easy for her.  That $50,000 house that he rented for so long could have been hers to keep if he had purchased it rather than renting.

The purchase of a home is not for everyone and I’m certainly against buying a home if you cannot afford it.  In the long time scheme of things, I believe that buying a home is the best option. 

What are your feelings on renting versus buying?

image (c) Karen Weideman

Post from: Thrifty Mommy