It’s that time of year again and we’re in the mindset where we begin to think about the things we’d like to do better next year.   Financial resolutions are often high on the list with much “spend less, save more” promises that never seem to quite make it past Valentines Day.

Plan For The Future

Create A Financial Plan:  Getting started with improving your finances requires first developing a plan for success.  A financial plan is the foundation upon which all your plans exist.  Without this plan, it’s impossible to have goal directed success as it relates to your finances.  This helps you decide whether that purchase you’re about to make coincides with your values and goals.  So in essence, it becomes the compass that helps you get to your wealthy destination.

Action:  Use this financial plan template to get started.  Fill it out as directed and then use it to guide your plans for the new year and beyond.

Budgeting

Develop a budget or spending plan that actually works for you based on where you are right now.  Don’t go cold turkey if you know that won’t work for you.  Instead, try reducing your spending in critical areas slowly until it “feels right”.  One mistake we often make us cutting these out cold turkey which actually backfires down the road.  Unless you have really good discipline, slowly but surely wins this race.

Action:  Get started here!  Need a budget template?  Check these awesome budgeting templates from Budgets Are Sexy.

• Take a look at your spending over the last 3-6 months by aggregating your accounts into Yodlee
• Check where you’ve fallen short, for example spending $500 on happy hours and eating out which leads to your account being overdrawn, well you might want to start there.
• Decide how much you need to cut back in each category.  Start off with $250 for the above-mentioned example.
• Create a new budget based on the template you select here.
• Use the next 2 weeks to test drive your budget.  Review your spending weekly to determine where you need to tweak things a bit.  This is an ongoing process, but as you go along, it gets easier.

Get Your Credit In Check

Check your Credit for errors, collections, judgements, late payments and possible liens.  If necessary, start the credit repair process in order to remove derogatory items.  Sign up for a credit monitoring service that will allow you to consistently and actively manage your credit so that you aren’t blindsided when applying for new credit down the road.

Develop a plan to begin the credit repair process

Decide which debts you will pay off and what other accounts need negotiation around a new payment plan for settlement or removing late payments in exchange for paying off the whole balance.  Tip:  If the account has already reported on your credit report, call when you have enough to pay half, more than half or the whole balance.  This way you have leverage and better able to negotiate removal of the derogatory information.  This agreement must be given to you in writing.

Action:

• Check your credit report.  There’s always a section which lists your creditor’s contact information.  Call them to discuss the account and what possible remedies are available to you.
• For the accounts that you have decided to pay off.  Check out these debt reduction strategies and see which one works for you.  The debt snowball method tends to be the most popular but it may not work or be appropriate for every situation.

Schedule Time With Your Money

Set up a time to review the above-mentioned tasks every week.  Staying on top of these issues develops a habit that you’ll need in order to cultivate financial discipline.

What are your financial resolutions for next year?  How have you fallen short this year and how to you plan to change things next year?

With the threat of a double dip recession on the horizon I’ve had many friends ask how to function in a financially efficient manner due to the recent loss of a job.  I often refer to this as “Safe Mode”.  The Windows PC types probably know this as the moment your computer may crash so it operate using only the essentials.

This should be your goal if you recently lost or are about to lose a job with nary an emergency fund in site.

First you should have a family meeting to get on the same page about the following cuts that will need to be made.  Don’t come up with a plan and put it in place without helping each member of your family understand the rationale.  This helps to ease the shock while engendering a team spirit about how you will get through this together.  If you’re single, skip this part.

Downsizing:  Different Strokes for Different Folks

What you do in this area depends on if you’re single, married and if married, how many children you have.  If you’re single and currently renting an apartment then downsize to renting a room, getting a roommate or even a studio.  This may also work if you’re a couple with no children.

If you have young children then you may want to downsize to where the children share a room in a 2BR or they share a space in a 1BR.

If you have older children then they may need to share a bedroom with you, the parent or share a space in the living room/dining room areas.

And, before you write and tell me how your kids need space to run and play, don’t.  We’re discussing the need to stay above the recession tide and your kids having a space to run and play in the house isn’t  priority at this stage in the game.  This especially applies if you have very young children.  They do not need their own bedroom. This isn’t about keeping up appearances to your children or family.  This is about saving money and being able to literally keep food on the table.This is often a very uncomfortable reality for many but the sooner you embrace it the sooner you will move past it and understand that this is only temporary.

Finding Work

If you don’t have a FT job, you can get a job at a supermarket, library, fast food place etc.  I often get the screw face when I tell folks this as if the money isn’t just as green.  Get over it.  While in grad school I walked dogs for a living and went on several mystery shopping trips during the week because I wanted to have my own money coming into our household.  Right now, no job is beneath you unless it is just morally unacceptable.

Until you get back on your feet, get in where you fit in.  Walk dogs, pick up trash, do someone’s laundry, babysit, start a business – there are endless options for bringing in money.  Many people are out of work and your perfect job may not be there right now.  Until then, take what you can get and rebuild little by little.

What Should I Cut From My Budget?

This will largely depend on your streams of income.  How much, how often etc etc

• Eating out-You should under no circumstances be eating out if you’ve lost your job and have no income coming into your hands.  Eating out would be a no no as you should be sticking to eating at home on a low budget.  Try Aldi as a great alternative to high priced supermarket brands:
• Food budget basics include:
• Water
• Lemons/Lime (flavor the water or lemonade)
• Rice
• Canned food: soups, beans, peas, veggies etc
• Pasta: Ramen Noodles, regular pasta
• Bread
• Chicken
• Ground turkey (very versatile)
• No red meat, too expensive
• Hair salon-Do I really need to explain this?  Get a hair dryer and your favorite shampoo/conditioner and make it work!  Youtube gurus offer up a lot of advice around how to style your hair sans salon visit.
• Cell phone-This is tricky.  My advice here is if you have a laptop and regular access to WIFI (local library, Panera Bread, McDonalds) then you don’t need a cell phone.  With the advent of Google Voice and Skype, you can easily make phone calls to prospective employers.  If you have to have a cell phone then Safe Link may be an option as this is available to those who are already in Food Stamps or Medicaid.
• Car-I would give this up if you live in a fairly “metro-friendly” area.  If you have access to buses and subways then give up the car.  There’s expenses like gas, insurance, repairs and/or a car note that you don’t absolutely need right now.  Sell it and relieve yourself of the monthly expense.  Opt for a bike share or using a service like ZipCar when necessary.
• Makeup/Hair Supplies-You’d be surprised what you can go without when you’re dead broke.  I know some of you must have your make up and hair but I won’t tell you yes on this one.  Mascara, eyeliner and lip gloss sure.  But a full run at the Mac counter?  Nope.
• Health care-If you need to go to the doctor and can’t afford health insurance, a federally funded health center is a great option.  This is often missed when discussing alternatives to health insurance so take a look here:
• You pay what you can afford, based on your income. Health centers provide
  1. checkups when you’re well
  2. treatment when you’re sick
  3. complete care when you’re pregnant
  4. immunizations and checkups for your children
  5. dental care and prescription drugs for your family
  6. mental health and substance abuse care if you need it

Cut Everything, But Need Help Making Ends Meet?

Check with your local social service agency and related nonprofits in your area.  There’s a program called TANF-Temporary (cash) Assistance for Needy Families which gives cash assistance to families with children based on income. Check your state for income guidelines.

There are other food banks like ShareDC.org which gives families 2 bags of groceries for $23 or free if you volunteer for 2-4 hours with their organization.

Check with local clergy for cash and food assistance.  They can also be a good source for referrals in the area around social service needs.

Check your budget to determine what you may be hiding.  Often times we gloss over things we would never dare cut but when we’re operating in emergency mode, those budget items need a 2nd look.

Credit?  Should I Pay Creditors

If you can afford to do so, yes, pay the very minimums to save your credit.  Call your creditors and explain your situation and they may be able to work out a plan with you.  If you can get on the disability payments which pay your premium if you lose your job then do so. Ask your creditor if this is available before you tell them you can’t pay.  Get on that plan, usually pennies ($1.67?) per month which they add to your balance.

However, if you have to choose between eating/shelter and paying a bank, then I choose eating and shelter.  The bank will be fine until you get back on your feet.

This is a scary time for many people due to the sputtering economy.  It’s time to buckle down and spend only what is absolutely necessary.  Take a look at your budget and determine what is critically essential to your well being.  That would be food, shelter and access to health care should you need it.

How do you/would you function when in safe mode?  What would you cut?  What would you keep?

Jennifer Williams is a writer, turner traveler, turned blogger. She’s trying her hand at blogging on various topics, so you can find her stepping into tech, business and finance. Follow her on twitter- @JtotheWilliams or check out her blog-allovertech.wordpress.com

Are you interested in finding simple ways to save money? If your answer is no, you’re probably lying.  After all, everyone wants to save money, even it they DIY or “Do It Yourself” living- meaning, taking care of things that you would generally pay someone else to do.

Here are five great ways to live the DIY lifestyle and get deeper discounts while you are at it.

DIY Discount Number One: Swear Off Lattes

That’s right, swear off all coffee that you don’t make at home or get for free in your company’s break room. This does not mean that you can’t enjoy espressos, cappuccinos, and every other lovely coffee creation that you can imagine. Instead of paying the extra $5 to have a barista serve these up for you on a daily basis, invest in a machine for your home kitchen that can be used to make all of your favorite caffeinated delights. Save even more money by searching for hot deals from stores that specialize in kitchen equipment.  You may find that your coffee tastes better when you made it yourself and saved the extra money.

Savings $100/month
DIY Discount Number Two: Fire Your Lawn Boy

Paying someone to mow the lawn is a luxury. The truth is, most yard work that is contracted out to professionals can be taken care of with a few simple lawn tools. Here is a good rule of thumb: If you have the tools, the abilities, and the strength to do the work, then do it yourself. There’s really no need to pay someone money to mow unless you have 80 billion acres of land… or at least 2.

Savings: $50/month

DIY Discount Number Three: Cancel Your Gym Membership

Once you get into a rhythm of taking care of your own land, you can cancel your gym membership. After all, you’ll probably get a better workout cutting grass, raking leaves, and performing general garden maintenance than you will on the tread mill. They say sweating is one of the keys to losing weight and toxins- you’ll be well on your way. Not to mention you can run outside as well as use the wall to do squats. Get some weights, balance ball, resistance bands and your favorite workout DVD and you’ll never need a gym again. There’s plenty of home exercises you can do to take care of your body.

Savings: $40-$125/month

DIY Discount Numbers Four and Five: Enjoy Your Home and Become a Better Cook

Many people spend hundreds if not thousands of dollars every year on dining and entertainment. If just two evenings a month were spent at home instead of out on the town, the savings over the course of a year would be substantial. One of the best ways to start enjoying time at home to make sure you can entertain yourself there.  Great cookbooks and a low cost $10/month subscription to Netflix might be a good alternative to start.  Furthermore, why spend money at a gourmet restaurant when you can make the same recipes at home? Search for good discounts on entertainment electronics, kitchen equipment, and even a few cooking lessons that will make your nights at home feel just as luxurious as your nights out.

Savings: $150-$900/month

What’s the last step? Become a Better DIY Budgeter

The next step is to take a few minutes and look at your budget and spending habits. For each item, just think to yourself “Do I really need to pay someone else to do that for me?” Ask this question everytime you need to do a task and you’ll soon see the savings start to roll in.

Question:  What are your tips for DIY Discounts and Budgeting?

If you recently graduated from college then you’ve been hit with the task of managing your own finances.  You may now have a job with a decent paycheck and along with that comes bills, unplanned expenses and learning to balance your checking account.  During this time you may also be experiencing some confusion, doubt and you can’t shake the feeling that nothing is wrong, but something just doesn’t feel quite right.

Welcome to your Quarter Life Crisis.

It is often around this time that Quarter Lifers can let their finances lapse leaving a trail of bad credit and unpaid bills due to overwhelming feelings around student loans and disillusionment around maintaining a desired lifestyle.

So how does a Quarter Lifer get through this extremely confusing period of life without letting their finances lapse?

1.   Get Organized

This is indeed a difficult time but it is no reason to let you finances lapse in the midst of it all.  Take inventory of your financial obligations and set them on auto pay through your bank or other online bill pay systems.  This way you can let the bills take care of themselves so long as you keep the funds in your bank account.  This includes saving at least 10% of your take home pay as well.  Remember, above all, pay yourself first!

2.  Create a Budget

You may be asking how do I do that?  It’s pretty simple, For the next month, track your expenses down to the penny.  You can do this by using all cash, only your debit card or just tallying up all purchases, bill payments and receipts at the end of the month.   After reviewing your information, decide which areas need improvement and go on a trial run for the next 30-60 days.  This way you gain a better understanding around which areas need closer oversight.

In my case, when I first moved to DC after college, I really needed to watch how much I ate out each week.  Of course I wasn’t the Martha Stewart wannabe I am today and ate out for breakfast, lunch and dinner, which got really expensive after a while.  So take stock of what areas need closer watch then tally up the totals.  Once you have an idea, you set the limits and voila, you now have a monthly budget!

Here’s a copy of a budget spreadsheet you may find useful:

• Personal Budget Spreadsheet

3.  Communicate With Your Student Loan Lender

If you haven’t already done so, call your student loan lender and find out when you first payment is due.  Get information around due dates, grace periods, payment terms, forbearance and in school status.  Depending on your personal/financial sitution you may be eligible to ask your lender for a forbearance just in case you aren’t able to manage payments at this point in time.  Some of you (like yours truly) may owe over 100k in student loans which is like a mortgage payment for most.  Still, Sallie, Citi, AES, KeyBank etc etc want their money.  It is in your best interest to make sure you are on track with this debt.  Like death and taxes, student loan repayment is another certainty in life.

4.  Curb The Shopping!

This includes lattes, the cute empire dress you could get for the after work party on Friday, the heels you don’t need and anything else not deemed a necessity right now.  If you must, give yourself a monthly shopping allowance and make it your duty not to go above it.  This way you’re able to shop and not feel guitly about it.

5.  Talk to Mom and Dad About Your Finances

Quarter Lifers are often caught up in wanting to seem responsible that they forget that it is still OK to ask for help even if they are on their own.  I can admit to calling my mom 8 months after moving here and telling her that my CC debt was unmanageable and I needed help.  She promptly called the credit card company and paid the balance for me and made me promise not to run it back up again.  Sometimes we need help and mom and/or dad are more than willing to help us out.  Of course, not without a stern talking to but it may be the help you need to get you back on the right path and giving you a fresh start.

Of course I do not advocate parents enabling their adult children, however, I am of the mindset that if they can still help out while you’re still getting your feet wet in adulthood, why not?

This is just one aspect of learning how to manage a quarter life crisis, keep in mind that issues around career, identity and relationships  are best handled by a life coach or therapist depending on the severity of the issues.  Your first step is realizing there’s a problem but that it’s totally OK to feel the way you do.  Just try to maintain control in the area of your personal finance so that you’re not paying for it years down the line when you’ve moved past this period in your life.

It’s my fault, I totally didn’t budget for any off these expenses. I knew that my hair appointment was coming up but didnt factor that in, didnt think the cat would get sick again so soon, and decided on a whim that we needed to get the carpet cleaned in the whole house. *sigh* But I’m learning the important lesson of thinking/budgeting ahead, so read on.

Scotch, the Alpha Cat our beloved kitty

Scotch is quite the rambunctious cat, always has been.

[Exhibit A: , yes that would be Scotch on top of the closet door trying to get to the high shelf in the closet , mmhmmm yes ma'am ]

You can guarantee that he will get into something at least every 3-4 months. Well this time was no different. Since getting a new kitten, Max, we’ve been keeping Scotch and Max separate because Scotch is rather aggressive and often tries to hump Max when he thinks we aren’t looking. After a few solo nights in the cat room, Scotch in his infinite cat wisdom started digging up the carpet in an effort to dig under the door. All that is left are the exposed nails, and you guessed it, while digging for freedom he got a nasty little cut on his front paw. By the time we noticed, it was already swollen, smelly and crusted with blood and pus. We took him to our trusted vet, Capitol Hill Veterinary Clinic and they patched him up. [Sidebar: They are the absolute BEST vet in the DC area IMHO] My mom and best friend scoffed at the cost just to have him seen and given a few meds but after the scare we had in October I think the cost is well worth it. I wasn’t blogging back in October 2007 (well about personal finance) but we spent over $1000 on his vet bills in 6-8 weeks. No insurance because we just didnt think we would ever need it. But I am happy that we didnt resort to using the credit cards, all cash baby! However, its now February 2008 and we’ve already spent $237.50 on his new litter, meds, vet bill and shots. I want to rip my hair out for not getting the vet insurance sooner but we will sign up on our follow up visit on Monday.

Damage: $237.50

Lesson: Plan ahead for vet expenses, and sign up for pet insurance. We didn’t have pet (medical) care as a line item on our budget this year as we only factored in their food and toys. I think this will call for $40/month in an ING sub account for things like this but I want to see how much the vet insurance will cost us and what it covers. At this point we need it to cover routine visits and “I’m being a bad ass kitty and need help” visits. *sigh* While administering Scotch’s meds last night and treating Max for pink eye, my husband said “Baby, we’re parents now, LOL!”. He has a point, they are like our kids, never quite saw it like that, but hey I wouldn’t have it any other way.

Carpet Cleaning

We moved in here last June and we had the carpet cleaned with the Rug Doctor and another cheapie carpet cleaning service. At $8 a room, we got what we paid for and the Rug Doctor was garbage. I don’t think it made a significant difference in the overall carpet appearance. So I called up the company, Superior Fabric Cleaners, made the appointment and they came out yesterday. FABULOUS! They cleaned, sanitized, deodorized and treated the carpet, top to bottom! I came home and screamed! I can now say that we have a home and not a house. There’s something about having a CLEAN carpet that made everything else in here POP! So it was well worth it for me. Why is it a budget buster? It cost $450 not including tip But the house is rather large at 3000 square feet and the technicians had to factor that in.

Here are some pictures of the living room and basement:

Very pleased!

Damage: $550 including tip

Lesson Learned: PLAN PLAN PLAN for things like this. Could the carpet cleaning have waited? I’m sure, but with 2 animals and a broken vacuum cleaner it needed to be done.

Hair Salon

So I’ve had this appointment for months, LOL! This is one of the things I struggle with on my budget because it costs $150-$200 plus tip every 8 weeks. Sure, I could just do my own hair but yea not so much and I definitely wouldn’t change hairdressers because she does awesome work. If you’re a black woman reading this, then you know that we don’t switch hairdressers often and when you find someone you like, you stick with them. Nuff Said. BUT—>I should have factored this expense into the budget because with everything else it just hit me that this is way too much going on for one weekend.

Damage: $230 including tip

Lesson Learned: Budget hair appointments into monthly budget.

Total damage: $1017.50

As you can see my overall lesson here was to plan for things that I don’t normally think about with regards to our budget. They aren’t emergencies so it didn’t warrant dipping into the emergency fund but situations which sorta kinda warranted immediate action, well except for the carpet ad hair salon appointment. I’ve been bad I know, but February will be better. Wait, this all happened in February. Well, I’ll do better for the rest of the month, how’s that?

We still have to go to Lowes or Home Dept to get some stuff in order to increase our energy efficiency because Washington Gas and Pepco are getting out of control, more on that in another post. We’re going to seal all the windows and *gasp* turn down the thermostat to see how much of a difference it makes in next month’s bill. We do have friends staying with us so we are accounting for 4 people living here and not just 2. We also have random, somewhat planned trips to go down to the wharf and get crabs for the game later. SSHHH!!! This is soo not a good way to start February.
January spending coming up soon!