Family Finances

Planning Your Holiday Season

Getting your finances ready for the upcoming holiday season. With two months left to the year and all the news reports to shop now, what can you do?

First let’s start with your list. Who are you planning on making purchases for?

Next, let’s take a look at your budget. How much do you have saved? How much can you afford to spend? Remember that the season typically includes more than gifts. You may have opportunities to attend gatherings, participate in events, and more. Don’t forget to include this in your budget too.

How is it looking? Are you all set and ready to shop? Or do you need to tweak your plan?

Some of the things we have done to reduce our spending is to cut back on gift giving, give one family gift as opposed to individual gifts and have get togethers instead of gifts. Take your list and think outside the box for what is right for you.

This is not the time to open a new credit card account, because you can get a discount. This is will lower your credit score with a new inquiry and new credit line. Probably not in your best interest. Plus, you don’t want to start off 2022 with holiday debt added to your budget.

Make a plan and decide what is right for you and enjoy the holidays.

Which Budgeting App Is Right For You?

Ever wonder what budgeting app is best for you and your family? Not sure where to start? I am asked this all the time and I don’t have a recommendation for you. I still use a manual method and am happy with that for us.

For those of you that do want to use an app, how do you make the right choice? Here is a great article from The Hartford comparing several apps to help you make the right choice.

Let me know what one you use and why. I would love to hear from you.

Married Finances: Should Two Become One?

Weddings are an emotional celebration. We love the idea of a bride and groom starting a new life together. We use words like “two becoming one” or “sharing your lives as one,” meaning that everything will be shared as though the couple are no longer individuals. I believe this puts a lot of unnecessary sentimental pressure on a couple to share all their finances even though it’s not always necessary, or even wise, to do so for every single account or property.

So, how do you merge two separate financial lives? There are many successful ways to do this. Some couples keep their individual incomes and expenses separate by having separate bank accounts, credit cards etc. Then, they have a joint expense account for their household bills that they each put money into. Sharing the joint account can be as simple as having each person responsible for different bills, or figuring out the bill totals and having each put in their half. Some people base the joint account total on a salary percentage (this works great when one spouse earns more money that the other). And, of course, some people merge everything and all accounts are joint.

You need to think about what type of financial people you are. Here are 3 questions to think about that will help you decide (and could possibly save some financial squabbles):

Are you a saver and your spouse a spender? Having one person be the fall back for financial emergencies can be challenging financially and to the marriage.
Are you both spenders? What will happen when there are no reserves for emergencies?
How do you each handle bill payment? Are all your bills paid on time? Do you have bills that have slipped through the cracks?

Answers to these questions can be tricky, but worth the discomfort. Proactive thought can be a financial life saver for your future. Double check your answers by looking at your account statements and credit reports. You may not be as good at finances as you think you are, or you might be better than you thought. Discuss your habits with each other, as well as any outstanding issues that could affect you both.

I am a firm believer that you both should participle in your finances. You have joint goals in your future, so you should do the financial planning for this together as well. Don’t let the responsibility fall to one person. If something were to happen to the “responsible” one, then the other party would be left completely in the dark, not knowing anything about the accounts or how to deal with them. I have seen many situations like this. It may seem kind, or convenient, to handle the money if your partner doesn’t know how, but it’s not.

Whichever way you choose to handle your finances as a married couple, make sure it’s a mutual decision based on real knowledge of your habits and goals.

Spring is here!

I can’t believe how fast this year is going! Here in Connecticut, we had lots of snow over 25” in February alone (that’s a lot considering last year, we had one storm with about 3” for the entire winter). March has been a roller coaster spring cleaning , we’ve had some warm days and some bitter cold days. But spring is coming!

With spring, it makes me think of two things – cleaning and planning projects. Cleaning is just a deeper cleaning – moving furniture to clean behind, washing windows, etc. As for the planning projects, that’s more complicated. As a homeowner, there is the annual maintenance you have do to – clean the yard, gutters and see what winter has done to your home that needs fixing. For us, we take on a project or two each year. Last year, was replacing the backyard fencing. The year before, was replacing the roof. Doing things proactively is easier for us and helps with the budget too. What will this year’s project be? We are still deciding.

What does spring mean to you?

Goodbye 2020, hello 2021!

2020 was a year for the record books. This past year has brought many issues for many people, from job losses, reduced wages, not to mention healthcare issues. If this past year didn’t convince you that you need an emergency fund, I am not sure what will.

For us personally, we have had job furloughs and reduced hours – therefore less income. Luckily, we have an emergency savings to help us out. In addition, we took on part time weekend jobs for additional income. What about you, how are you surviving?

Our goal for 2021 is to get our finances back on track – replenishing our emergency savings and eliminating debt. Fortunately, we are back at work and earning income (and we have kept the additional part time work). So here is our plan:

We continue to automatically save a portion of each paycheck.
We have made a plan to pay down some debt we accumulated.

Notice that we are doing both at the same time. Personally, I don’t believe that all your money should go to paying down your debt while not saving anything. If you have an unexpected expense, then what will happen? You will go into more debt. That’s why I believe in doing both at the same time.

For us, we are using the snowball method to payoff the debt we have accumulated. What is your plan to get back in track in 2021?

Your Financial Health

Do you ever wonder how your financial pictures stacks up? Are you on track to meet your goals? What do you need to still do? These and other questions are always on the many people’s minds.

I have discussed the importance of having an emergency savings, a budget to know where your money is going, great credit /score to have the best interest rates when you need to borrow and minimal high interest debt. Check out some of my past emails for more information on these topics.

This is a great article Six Numbers Reveal the State of Your Financial Health. How well do your finances compare to these six areas? All are important areas that should be goals for you to accomplish with your finances.

Decluttering Your Financial Records

Since we have all been at home for months and doing things around the home, I thought I would rerun this appropriate newsletter about what you need to keep and toss for your financial records.

Here is what you can get rid of:

Paystubs – Do you have a stack of them? You can get rid of last year’s because you have a W-2 that summarizes what you’ve earned. Keep the W-2. Make sure they match before shredding.

Bank Statements – If your bank gives you an annual summary or statement, then you can get rid of all the monthly or quarterly statements, but keep the annual summary / statement.

Tax Returns – Generally, you can get rid of tax returns that are seven years old or more (2013 and older) along with the supporting documentation. However, you will want to check with your tax preparer if you:

bought, sold, and/or own a home
hold certain investments
received certain gifts
have any other special circumstance that requires you to keep related paperwork indefinitely.

In other words, check with your tax preparer before shredding your returns.

An alternative to paper files

Keeping your records on your computer is a great alternative to paper files. We had a lot of paper clutter hanging around, so I started the process of scanning my records as pdfs. If you need a piece of documentation, it’s much easier to locate and open a single pdf than it is to search through a big, cluttered file full of paper. The best part is, that you don’t have to refile the pdf after you’re done looking at it. It’s also easier to fax or email a pdf if needed. Think of all the times you’ve needed to share information about insurances, taxes or rebates. Computer files are great to work with. Remember to keep a back up of your files. You wouldn’t want to lose them if your computer crashes.

Make sure to shred

Remember when I say “get rid of”, I mean for you to shred each and every document that has your personal information on it before throwing it away. You don’t want to offer dumpster divers an opportunity to steal your identity.

Call your tax preparer to see what you need to keep and start to go through your paperwork to eliminate what you don’t need. Happy Shredding!

Simplifying By Making Choices

This stay at home time, we have made changes to our routine. Bills are still coming in and some are higher, but income stayed the same or was even reduced. Something had to change.

For our electric bill that went up (even more now with summer air conditioning), we unplugged. Think shutting the strips on the TV ‘s when not in use, unplugging the computers and printers when not is use, unplugging the kitchen appliances, and more. By doing this we have reduce our bill by about $15 a month. AARP has an article on lowering your electric bill during summer.

Previously, we have reduced our cable bill, by reducing it to basic TV service and internet. Now we add whatever paid service that works for us – and only one at a time. We have smart TV’s and can access programming through the internet apps that are free. We use our local library’s digital collection for free. Right now, we are using Sling TV for other channels. In total, we spend about $110 a month total, by reducing the cord. Hopefully, one day we can totally cut the cord!

We have also not renewed most magazine subscriptions and cancelled memberships. For our warehouse club, I had to go into our profile and uncheck automatic renewal. If you do this, remember to check that you are not being automatically being changed when you shouldn’t be.

Simplifying Buying When Not Needed

How many times have you gone out and made a purchase only to come home to find out that you already had the item? This used to be us.

Simplifying the kitchen is good thing makes what we need easier to locate when needed. Simplifying and organizing has been our mission. Now our kitchen cabinets and grouped together – one shelf for condiments, one for soups and other canned goods, one for pastas, etc. Kitchen cabinets a mess. Items put on any shelf and not grouped together.

Now it’s so much easier to see what is needed before going shopping and not may unnecessary purchases (all while saving money).

Simplifying One Times Use Items

Next, we are simplifying by getting iod of items the are one-time use items.

What items are in our kitchen that we only use for one purpose. These are taking up space and we can do without these. Think apple slicer, we can cut the apple with a knife. Think popsicle molds, how many times have I used them. I can only think of one time. We are working our way through the cabinets and drawers in our home. How many of these items do you have in your home?

Items are piling up and will be ready to donate soon.