Tuesday, November 29, 2011

Five-Minute, Short-Term Cash Shortage Solutions

Many of the personal financial advice "gurus" get it wrong. They think that the reason people are dealing with debt or an inability to pay bills is due to over-consumption – buying more than income allows. The real statistics tell a more nuanced tale, one which can be broken into different types of financial dilemmas.

1. Sudden reduction in household income before the cost structure can be changed - For example, if your hours are cut due to the recession, or if there formerly were two wage earners in a house but now there is only one, the simple answer is "cut your costs!" But that's overly simplistic. If you rent an apartment, it's difficult to suddenly move to a cheaper place if you are in a 12-month lease. You might have car payments – selling the car might make it harder to change jobs or keep the job you have. Some items (entertainment, expensive foods) can be cut back, but not some of the bigger ones.

2. Complexity and time requirements overwhelm the busy working person – Bill paying has gotten more complicated in the digital era. You might pay everything online, but there are times when deposits and debits do not post in real time. You still need to keep offline records if you want to be completely accurate. But in a busy time period, it’s easy to make errors or forget to check your balances.

3. "Pig in a python" expense accumulations – You can budget for all the predictable expenses and allow for $200 or $500 of "surprise" expenses some months. But a quarterly insurance payment, a medical emergency and a car repair in one month can add up to a lot of trouble in paying bills.

The important thing to understand is each of these comes with a different solution. One solution that covers several of these dilemmas, however, is online payday loans. Particularly when you face a "pig in a python" scenario, it can be hard to pay for it all at once. But with fast cash advances – loans based on your employment status, not a collateral or credit score – you can flatten out that snake, so to speak.

Paycheck loans need to be paid back in one, sometimes two pay periods. They must be thought only of as short-term loans. Otherwise, that snake stretches out and follows you around!

Friday, November 25, 2011

Trying To Become Debt Free

Hi, I am presently working full-time and do house and petsitting on the side for extra income. I have been doing this for over a year now and find that I am paying rent for an apartment I am hardly ever at.

I have an upcoming job for two months at two places. I am thinking about leaving my apartment when my lease is up and maybe rent a room for cheaper rent. I feel like I am throwing away rent when I am never there anyway.

So for the two months I am living in other people's homes I will be rent free and can put my stuff in storage. During those two months I will save over $1000.

I am guessing you probably want me to go through my financial past a little bit.

I am 27 years old and have been discharged from bankruptcy for 2+ years. I am slowly rebuilding my credit and have made some poor choices during this process and as a result I have a car loan to pay for and a high interest personal loan.

I really want to be as debt free as possible. I am into month two of the envelope system and this month is a bit more of a struggle than the previous month.
Any other questions - just ask. I just want to know if anyone has any advice for me.

Read the discussion here

Monday, November 21, 2011

Some Saving Advice Wanted

Hey, just looking for some advice.

I'm 21 years old, just graduating from college luckily with $0 debt....thank you scholarships.

Current value:

Mutual funds: 12k
Savings: 5k
Debt: 0

I'm looking at expanding into roth IRA, but being self-employed no 401k will be available. Is there anything else I should look at investing in?

Thanks a lot...

See the discussion

Friday, November 18, 2011

Housing Budget Dilemma

I'm in a dilemma. My husband has just received a raise and we have put an offer on the house. We have exactly £9,000 saved up.

We put an offer on a house which is £160,000 and needs a 16,000 down payment. We are hoping to borrow the rest of the down payment from my mother in law.

However the house is not in a very good school area. Actually the worst in the whole northeast.. Schools are a huge issue here in England because of bullying and low class uneducated families. (they are not as open minded as families on lesser incomes in America).

So my daughter would have to go to private school. The payment would be £815 a month. and on the tightest budget where you couldn't even crack my ass cheeks open with a walnut cracker cost of living that we could possibly have is £1000.

We could possibly have a rental income of £300 a month.. however we need to fix up our rental property to the cost of at least £2,000.

And most importantly I need a car. We can buy one for about £4,000.. a good quality car that we needn't fear would break down as soon as be bought it.

My priorities are

Education for me as well as my daughter
another car for my husband because his is breaking down

Now as you may have noticed.. there is no way my budget would be able to handle all my expenses and take care of the priorities that we have in one shot. I have put an offer on the house (that I would just have to move out in a year and half anyway) and I am thinking of backing out of the purchase.

If I back out of the purchase.. then I can save about £24k by next august plus keep my £9,000 in the bank. My mother in law has promised to give me a bit of help in fixing up the house I live in at the moment. I will also secure a car for myself, my husband, and have money for education and keeping my sanity (i.e. daycare, exercise,) and my daughters education.

If I don't back out of the house we will only save at most 14,000 by Jan of next year. Without being able to afford childcare for my son.. and therefore stalling my own education efforts. However, we would have more of a social life with friends as their will be room for entertainment and a garden for the children to play in. In selling the house we would prob. break even to have our 16k down payment back..

I just think it makes sense to take care of my priorities first. The housing market isn't going to go so drastically up that it will be unaffordable .. Will it??? And a better area would mean I would not have to pay for private school for my daughter.

Any words of reason out there??

You can comment or to see what others have to say about this here

Monday, November 14, 2011

Balance Sheet Ruined By Clothes

I'm 17 and I have a problem with my spending habit, it's nothing compare to my friends and they see me as a cheap person that's always finding ways to save my money. It may seems true but I have a very big spending problem, for the past 7 months, I have spent 923.10$ on clothes alone, that's way over the limit and I really regret buying a 200$ jeans because my friend encouraged me to buy it, since it looks really good on me... Later, I found jeans that are 30$-50$.

I keep my spending on track with my notebook, and I review it at the end of the month to see what area I need improve, so far, I stopped eating out and start buying groceries and cooking meals at home. I don't know how much I save so far, I stopped eating out for two weeks already except today, I bought Mcdo because I was very very hungry and I lost my appetite at lunch time when a fly touched my meal, I also killed it with my spoon... I hate eating at my dad work place, so much flies flying around.

I don't go out often to hang out with my friends, the activities they ask are very expensive and I don't work anymore, so I have to watch my money, more importantly my savings that I have saved for the last six months, so far, I had around 700$, plus my change that make 420$ (I saved it separately for my future around the world trip that I'll talk about it later), that makes 1120$ in my saving account. I recently went shopping for clothes for my interview today, I applied for H&M, a very trendy store and I refused to work 20 hours/week starting in September, so I got refused to do the interview... I don't care anymore, their clothes are not really my taste anyways, and the hours they asked me to do will take away my study.

Anyways, the point is, when I went shopping, I was only thinking about buying a shirt or two from the H&M store, and I end up buying a shirt, a sweater and some weird looking gloves that I found pretty and cheap, that makes 52.07$. After that, I wanted to leave right away, but the mall was having a BIG sale... I told myself, what the heck I still have 147.93$ on me, I'll only spend 100$ today. I've found some lucky find, like a shirt for 5$ at American Eagle, 4$ tank top from the kids section (I can actually fit them... I was surprise. o.O)... But at the end of the day, I've spent 190.83$, then I realized I have a big problem in this area... I look at my spending this month, the total is 368.77$ in July. I shouldn't have step into the American Eagle store or the other stores as well... Or even go shopping at all.

I am happy with my purchase though, I have a very colourful wardrobe now. I just want to avoid spending too much money at the same time and later, regret about it... So I decide to spend 100$ every three months, to avoid frustration at the end, but I'm not completely sure if I can follow it. I go to the other forum where there's people that are the same age as me, I remembered seeing their wardrobe where they have full of clothes, they said that they have a lot of clothes that they don't wear, but I want to have a full wardrobe too... When I look at mine, it looks empty, and I want to load my wardrobe slowly, I try choosing my clothes wisely when I go shopping, to avoid wasting my money for nothing. If I take my own advice, I'll spend about 400$/ year. I won't shop at thrift store or garage sale... Sorry, I'm not use to the used clothing from other people other than my own family, although, I can't ask clothes from anybody in my family since I am VERY picky in clothes and my mom tried the hand me down, out of ten clothes she gave me, I only accepted one, her other clothes are broken or really not my taste... I feel like I'm a garbage to my mom when I found one or two holes in some of her shirts that she gave me. Honestly, my mom don't know my taste or don't really know me, so she always assume things about me and tell everyone else, when they see me, they claimed things that my mom said and half of it it's not even true or she don't know why I did that. I want to sew my own clothes, but I hardly have any time and money now, #1 : I'm going to college soon, I need to study a lot for the first two terms to get good grades. #2 : I'm going to find a part-time job to earn money for my long-term saving in three years and I don't want to ask for my parents money too often because I feel really guilty always asking them to pay me stuff. #3 I don't have the money for the sewing machine, lessons and any other things... It's going to cost me a lot in the end, but it'll save a heap of money later on because I'll be making my own clothes in my taste, but I'm going to think about later, when I have enough money for my goal.

Entertainment should be no problem for me, I only spend less than 300$ these past 7 months, but I'm planning to do only 200$/year if possible and stop listening to my cousin who's constantly asking me to join her in her expensive activities like seeing a movie every Friday at 10$ at night (Tuesday and Wednesday are only 6$, my local video store have pretty recent movies, it costs 3$ for 3 movies), going to the amusement park for only a few hours that cost 34$ for the entry (I went there 10 times in my life, and all I remember is waiting in line for more than 40 min to get on a ride, I hate that and I don't plan on going back anytime soon, maybe for a special friend , I'll consider it.), going swimming in the Olympic stadium (cost 4,50$ to go in and at my school, it costs 1,50$ for the entry.) and going out to eat two meals in the same day. Her parents give her the money like 20$ every time she goes out. She respects some of my frugal ways like taking the bus, while she's free (Her uncle sell bus card) and I have to pay 1.80$ to take, last time, I suggested going on roller, and she agreed.

Food so far is 379.17 included going out to eat, buying my own food for cooking and... Buying drink once or twice so far in seven months. I've decided to buy my own groceries when school start, my mom usually give me 80$ for my lunch card (cost 76$) for a month, and I think I'm going to stretch my money and make my own lunch from now on... The rest of the money, I'll put it on my long-term goal. yay! If I can survive 22$ in groceries for 2 weeks, I think I can survive 44$ for a month for lunch and breakfast, there's even enough to make two lunches a day for my brother or sister and I. . yay!. I don't know about eating out... It'll be my own expense though. For the past 7 months, I eat out like 3 times/ month...I think it's okay, since I don't go out often, so I don't eat out often either. About 10$ eating out and that makes 30$/ month.... That makes 360$/year. I think it's okay. I'll see if I can follow it.

I don't think I need money for emergency. I still live with my parents. I can't think of anything that's considering emergency for a teen... All the superficial things. Do I need it in case? For what exactly?

Charity money... I don't know what organisation I want to donate my money to. I believe in many things that have to be solve, but the people in Africa always touch me, when I think about it, I need to help things that's more near me like the Aid and other sickness. I remember reading something in a book, to donate 10% of my paycheck or something. It's okay with me.. Any suggestions?

Saving my money... I called it saving money for nothing, since I already save my 50$ off my paycheck weekly to go directly to my savings, I don't know what to do with it, and I'm satisfied with it because I know I have money that I don't need.

Saving for long-term goal ; I want to travel around the world in three years. That's one of my main dream. I'm thinking before I enter University, I take a year or two off and go travel the world with only a backpack with me and traveling cheaply... It's going to cost me a lot, but I really really want to do it, it been my dream to travel when I was six years old and still is. I know it's not possible with my busy scheduled, I'm going to college soon and I can't work more than 15 hours a week... I'm thinking of investing somewhere to watch my money grow, but I don't want to lose my money in the process either, so any suggestions on where I should invest in ?

I think that's all for now...I hope you guys can give me suggestions on my budget or comment on it ._." or even criticize it hehe... I need help with my spending money on clothes the most, I can't seem to tone it down a bit.

If you want to comment or see how others have responded, you can do so here

Friday, November 11, 2011

Negative Numbers Each Month

I will be posting the finances of a variety of people on this blog who are seeking help in getting their balance sheets in order:

Even though I read a lot of money saving tips and try to be good with my money I end up being in the negative every month.

I don't have a too serious problem yet. I have a credit card but don't use it in case of emergencies.

I just spend a lot of money. When I go somewhere I buy anything I want without even thinking. I always think I have the money for it because when I look at my checking account I see $900, not $800 for rent, $100 for insurance, $30 for gas. I just see the money and think oh, I'll be fine when the bill comes. I end up having to go into my savings every month and pay rent. I never been able to save more then $2000 in my life.

I was wondering if you could help me out? I really need someone to teach me how to manage my money.

To comment and see suggestions from others

Tuesday, November 08, 2011

What Is A Balance Sheet?

A balance sheet is usually used for businesses and is basically a financial "snapshot" of the business at any specific date in time. It includes the business's assets and liabilities which are added together to calculate the business's net worth.

For individuals, the balance sheet is often referred to as net worth which also lists a person's assets and liabilities. The entire concept isn't too difficult although many people don't take the time to calculate their assets and liabilities. Having a clear view of your balance sheet can go a long way to helping you budget and it is highly recommended that everyone take the time to gather this information and do the calculations to see where they stand. This allows you to track your finances and see how you are doing toward your stated goals.

Tuesday, November 01, 2011

Balance Sheet Beginning

One of the most important aspects of personal finance is knowing where your money is going. Having a balance sheet of all your debts and assets is a great way to track where your money is going and how financially healthy your are.

I will be looking at our balance sheet and also those of others to help highlight areas that may be of concern for the average person and how using and knowing the numbers of a balance sheet can help.