A personal budget, part of your New Years resolution?

It’s almost that time again. The time when millions of Americans make New Years resolutions. Unfortunately, most resolutions never get completed. From losing weight, working harder, going to the gym, eating healthier, being more environmentally conscious and managing your money. Everyone starts with good intentions, but keeping those resolutions is often a bigger task than expected. Most resolutions are things we really want to accomplish but sometimes our goals are somewhat unrealistic.

For those of you who plan to make the resolution this year to manage your money better, start with the most simple tool of personal money management, a budget. Start by making your budget realistic and simple. Creating realistic a realistic budget will help keep you motivated and accomplish your financial goals.

First, examine your current financial situation. Make a list of all your financial debts including credit cards, personal loans, medical bills, auto payments, mortgages, etc. Be sure to also include their balances, interest rates and minimum payments. Total up the balance and you might be amazed at just how much debt you have. Maybe this will be enough to make you realize how important it is to create a budget and stick to it.

Next, analyze your current income situation. How much cash does your total household bring in each month to spend on living expenses, bills and entertainment. You may realize here that you don’t have enough cash coming in to live the lifestyle you have.

The next part is going to take some effort. You need to analyze your spending for one month. Write down every penny you spend for one full month. This includes all your utility bills, entertainment, vending machine visits, bad habits, EVERYTHING.

After you have completed these steps you will have enough information to create a simple budget and spending plan. You need to divide all your spending into several different categories. There are many places to find sample budgets with specific examples of these categories. Distribute your household income into each of the categories. Start with all the mandatory expenses such as mortgage, car payments, groceries, gas, etc. Once you have these categories filled the remaining money should be divided into categories such as clothing, entertainment, eating out, etc.

Some of you may realize you have run out of money before you get to the enertainment and eating out categories. If this is the case you have the option of finding free entertainment, not eating our or getting a part time job to fund these categories.

Make your personal budget experience fun and easy. Don’t get frustrated if it doesn’t work the first month. Adjust categories to suite your needs and if necessary find other income sources. Don’t let this New Years resolution be one that is forgotten!

Reality of the difficulty of getting a loan

It’s pretty obvious to me that the financial banking system is in the process of a major overhaul. Just a year ago it was very simple to get a loan, especially with a credit score over 750. Today we basically had a loan fall through from our bank we do everyday banking with. What happened?

About 2 months ago my wife and I stumbled on some land where we would love to build a future home. It’s a one acre lot in a very nice neighborhood. Right now because of the price we weren’t really in a financial situation where we could comfortably afford a payment on this particular piece of land. We however called the listing realtor just to check into the situation. After talking to the realtor we decided to pass on the land even though the price was a pretty good deal.

We were disappointed but forgot about the land for about two weeks, when the realtor called us back. He informed us that the price had dropped about $10,000 on the property and the land owners were eager to get rid of the land. It was a foreclosed property owned by the bank and they needed to liquidate it for cash ASAP. He suggested we make an offer that we thought we could afford.

We got our hopes up again that we could buy the land and build our dream home. We talked to our bank about financing the lot, but realized we had to have 20% cash to pay down on the land. This was basically a new rule as a result of the current state of the economy. A year ago and we could finance 100% of the loan, but that’s probably why the land was foreclosed on in the first place. Anyway we had to find a way to come up with the money.

After several hours of discussion we both agreed that we didn’t want to drain our savings and crunch our budget so tight with the current state of the economy. I came up with the idea of refinancing our home to get cash out and pay down on the land. Great idea and our bank agreed. We made an offer on the land, it was accepted and the paperwork started. Until a week ago we were ready to buy the land and start planning our dream home. But the breaks were pushed hard when we found out our home didn’t appraise for enough to get the cash out we needed to pay down on the land. We tried several options but none seemed to work for us.

Again, we gave up hope on the land until a friend at work suggested we try a local hometown bank. Long story short it ended up working because this bank allowed a refinance with a 95% LTV instead of a 90% LTV. We are now in the process of doing more paperwork and hopefully closing the loan in less than 3 weeks.

Throughout the whole process I was so frustrated because I’ve never had a problem borrowing money. My wife and I both have excellent credit and never missed a payment, but for some reason we couldn’t find a solution to this loan. Our debt to income is really good but it still didn’t seem to matter. TImes have changed especially in the financial and banking industry. We can only hope things will be fixed soon!

Get to the bottom of overspending

For years I have heard the phrase the more money you make the more money you will spend. Sadly enough a large portion of people believe this myth and follow down the path of brokenness. If you ever plan to be financially successful you have to stop spending every penny you earn each month. It’s an easy concept to tell people, but a very hard concept to follow. Let’s get to the bottom of why we overspend and what we can do to solve the problem.

For most people the problem starts with the easy access to credit. Everyday I check the mail there is at least one and sometimes up to 5 new credit card offer from a different bank or financial institutions. Most of them offering 0% balance transfers for 12 months or a very low fixed rate for the life of the loan. They also offer no interest on purchases for up to one year, this is the worst. You can buy anything you want (up to your credit limit) and not pay any interest on the borrowed money. Sound like a great until the one year is up and you have racked up thousands of dollars in credit card charges that you no longer have to money to pay for. What do you do, open up one of the 0% interest balance transfers for one year credit cards and start the process over.

The next problem for overspending is temptations from friends, family and coworkers. Brother Jim just got a new HD television to hang on the wall over the fireplace. You start thinking about how hard you work everyday and don’t have a new HD television set, so what do you do? You get in your head that you can afford to go buy yourself a new tv, but you need a bigger one than Jim because you work harder. You do need to enjoy your life, but enjoy your life as much as you can afford, debt is not fun!

Finally, overspending is very similar to overeating. Some people buy a new pair of shoes just to feel better about themselves. If you’ve had a bad at work or had a fight with your spouse what can make you feel better than spending some money? We sometimes spend money and buy something that will please us to take our minds off something that is bothering us.

Don’t get caught up in these financial traps. Be sensible about spending your money. Think before you jump into any financial transaction. Ask yourself is this really what I need to do or am I doing this for a dumb reason? Stop overspending your hard earned money and get to the bottom of overspending!

Financial communities and forums

Wanting someone to keep you in check with your finances? An online financial community or forum is a great place to start. There are thousands of financial communities online that can help you control your finances as well as answer any financial questions you might have. There are actually professional financial advisors that are more concerned about helping people rather than money.

An online community or forum is such a great place to talk about your finances because you can pretty much remain anonymous and keep your personal finances personal. Sometimes when it comes to money people want to keep it a private matter and discussing financial situations with friends isn’t an option. With an online community you can talk about anything you want and still remain completely anonymous.

If you have questions about mortgages, budgets, debt management, or anything related to finances, more than likely there is a place for you. Just do a quick search online for financial forums and you’re bound to find somewhere that can help. However be careful when searching, make sure the advice you are getting is better advice than you could give yourself. Even though the Internet is a great resource for information, it’s not always factual. Soon I hope to have a forum here at lexchoice to help with financial advice.

Selling something for more than it’s listed

Every sold something for more then it was originally listed for? Once I saw a practical joke show about a guy going into a car dealership and trying to negotiate with the car dealer. The funny twist was that they guy was trying to tell the car salesman that he had so much money to spend on a car for his wife and the car he wanted to buy was priced too cheap.

The buyer wanted the car salesman to mark up the care. The guy kept trying to negotiate with the salesman but the opposite way. He kept telling him that if he sold the car to him for the listed price then his wife wouldn’t be happy with him because he bought a piece of junk. He needed to pay more for this car. It was so funny because the salesman was at a loss of what to do, he was caught totally off guard.

I thought something like this was impossible, but my wife recently proved me wrong. We’ve been clearing out some unneeded furniture from our house recently and we listed a kitchen table on craigslist. We listed it as well as a desk for $75 each. I ended up selling the computer desk for $65, but my wife topped me by selling the kitchen table for $80!

That’s right we had it listed for $75 and she sold it for $80. When the man arrived to look at the table he told her it was exactly what he was looking for. He was staging an apartment and it would fit perfect into the kitchen of the apartment. She told him it was listed for $75. I guess the man wasn’t interested in negotiating so he immediately took out his wallet and handed her $80. My wife and I are bad about keeping cash and she didn’t have any change. He told her not to worry about it and to keep the change. I guess she made up for my lack of negotiation skills with the computer desk.

Household bills and Finance in Marriage

Who takes care of the bill payment center at your house? Does it really matter who the financial guru is at home? With the continued development and improvement of Internet security paying the bills is a much easier process than it was a few years ago. With services such as online auto or automatic bill payment, electronic bill payment, and online payment reminders. paying a bill online is a breeze.

The question remains of who takes care of the household finances, the husband or the wife? The obvious answer to the question is whoever is more organized and better with money, but it goes beyond this simple answer. The household finances should be a shared responsibility between both husband and wife. It’s ok to have one person, usually the more organized person, take care of paying bills and budgeting but both should be involved with the overall process.

Since 50% of all marriages end in divorce and the number one cause of divorce is money this should be an important job in the family. If the husband takes care of the majority of the finances the wife should always be well informed of how much money they have to spend on what debt the family currently possesses. A husband can’t expect a wife to control her spending if she doesn’t know they are broke. The same goes for the wife, if she takes care of the majority of the finances, she should update the husband on the current financial situation often. Men tend to enjoy “toys” which usually carry a big price tag, if you can’t afford to purchase big ticket items they need to know.

Taking care of the household bills and personal finances is a big burden and responsibility. The workload should be shared by the couple. Keep each other well informed of your current financial situation and always talk before making any major purchases. Maybe you can be one of the 50% that stays together!

Importance of Financial Goal Setting

Financial goal setting can be a difficult task, but well worth the rewards you will reap if you are successful. It is important to set and achieve personal financial goals in order to achieve long term financial success. Let your money work for you each month instead of working so hard for your money.

When setting goals identify and write down your goals. Keep in mind you need to make specific, realistic goals that are attainable. Everyone’s financial situations  are different thus financial goals will also be very different. For some people goals may be focused on getting out of debt, others may be debt free and want to focus on saving for a home or car, others may be ready to focus on retirement goals. No matter what stage you are in life determine your goals and write them down.

Next, break down your goals into three different categories. The first category should include several easy short-term goals which can be attained in 1 year or less. For example, pay off a small credit card balance. The second category should include medium-term goals which can be accomplished in 1 to 3 years. An example might include paying off a car loan or saving to pay cash for a car. Finally, include a few long-term goals that can be accomplished in longer than 5 years. For example saving 10,000 toward retirement.

Next, educate yourself and do some major planning. Since you have your goals written down and sorted into categories, figure out how you are going to go about accomplishing these goals. If you first goal is to pay off a credit card you will have to come up with some extra money each month to pay down the balance. This might include searching for a part time job or finding extra money in your monthly budget. Research other financial websites, magazines and publications to get ideas of how to accomplish your goals.

It is now important to evaluate yourself and your progress while continuing the process of setting and achieving goals. GIve yourself a financial checkup every week, month and year. If you find yourself falling short of your original goals, develop a different plan to accomplish them.  You won’t be able to acheive your goals overnight, setting and achieving goals is a difficult task that even professionals struggle with. Stay motivated and focused and you will be successful!

Dollar Store items, junk or treasures

Dollar stores and popping up everywhere these days. Most of them advertise that everything in the store is $1 or less. It seems like a great deal, but is the stuff you find at these stores really worth $1 or are they just selling junk?

In my opinion dollar discount stores are just like every other type of store, there are great deals to be found but you have to really watch what you purchase. Even popular bulk wholesale stores may seem cheaper than regular retail stores when in reality just because you are buying bulk doesn’t mean you are saving money. Also, you have to consider what you are purchasing and the quality of the items.

Many of the items you find in a dollar store are more expensive than you could find at a regular retail store. For example candy items are often $1 and can be purchased at a supermarket for much less than $1. They however sell many of these overpriced items because you think it’s a great deal.

There are are however many great deals to be found in these dollar discount stores. Here is a list of our familys top 5 favorite items to purchase at dollar stores:

• Cleaning Supplies - You usually won’t find name brand cleaning supplies at dollar stores unless it is a discontinued item, but you will find their cousin counterparts. Most basic cleaning supplies have similar ingredients and they get the job done for most everyday chores.
• Bathroom Supplies - Many common smaller bathroom items such as mats, caddies and shower curtains can be found at dollar stores for a fraction of the price.
• Gardening Tools and supplies - You won’t find top quality gardening tools at a dollar store but for those of us who only do gardening as a hobby you will find your needs met. Gardening gloves, decorations, pots and much more can be found at dollar stores and they still get the job done.
• Household Tools - These tools aren’t for the serious carpenter but for the occassional picture hanger, nail puller, screwdriver you’ll find a great deal on these handy tools.
• Gift Cards, Thank You Cards, Notecards and stationary - Most paper products are a great deal at dollar stores. Especially look for out of season cards and stationary to use for next year. You can get a lot of bang for your buck.

Overall, dollar stores are a great way to find treasures. Don’t get carried away when you shop at them, there are deals to be found but there are also overpriced itmes waiting to make them money!

The Importance of Financial Awareness in Your Children

Not only is it very important for you to understand the importance of money management and personal finances but your children’s financial awareness is very important as well. It is vital to teach our children sound money management skills early in life. If they don’t learn these valuable money lessons when they are young they will grow up without the ability to handle money and finances.

You may realize the importance of financial awareness in your children, but you may struggle with how to instill these important pricipals. Here are four basic principals to help you teach your children about money.

• Start early, very early - I’m not sure of an exact age but I do know my two year old daughter started learning the very basic concept of money at around the age of 2 years. She is now 3 and 1/2 years old and has started her own piggy bank saving account, which she saves money to take shopping with her mother.
• Lead by example - If you want your children to have sound financial awareness then you will have to show them you really mean what you say. The old saying “do what I say, not what I do” just doesn’t work. Children are led by example so practice what you preach.
• Let them earn money - Gifts are nice but if you are always giving your children money for no reason they will continue to expect that. Give them chores to do around the house to earn money. Right now we let our daughter help fold laundry and put away the silverware out of the dishwasher. We give her a quarter for her efforts and she is estatic.
• Let them spend it or save it - It’s their money so let them decide what they want to do with the money. You can always make suggestions but if they want to spend their hard earned money on a pack of stickers or a toy cell phone, let them. If they want to save their money and horde it away, again that’s their decision.

It’s very important that you take an active role in teaching them these principals. There is very little positive outside help teaching financial principals. The American public schools has very little to do with the teaching of finances and depending on the parent this is good or bad. The television would be the next source of learning and there’s not much positive financial learning coming from the TV.

Teaching your children sound money management skills during childhoood will prepare them for the future. From todler to their teenage years continue to guide them down the right paths. Educate them of all the opportunities avaliable and the consequences of their financial decisions. They will thank you years from now!

Great deal on cheap headphones

I just found a great deal on some cheap headphones. I was looking through TigerDirect’s Liquidation Sale! and found a pair of Coby CV-H42 Ultra Lightweight Stereo Headphones for $2.97. Sounds like a great deal to me, but I can’t confirm the quality of the headphones. I did read on the site that they do come with a warrenty from the factory for 12 months that covers parts and labor. So if you are looking for a great deal on some headphones you may want to check it out!