budgeting

Why I Use Budgeting Apps

Have you ever had someone tell you all about how much they love spreadsheets? Maybe they’ve told you what a great tool they are when comparison shopping. Or maybe they love to use them to track their spending and budgeting. Perhaps you’ve listened to someone tell you how much spreadsheets have simplified this person’s life and how organized they are because of of this very precise type-A hobby of theirs.

If you’re like most people, you’ve probably rolled your eyes and wondered how someone could actually enjoy that level of structure in their life. I have personally tried to enjoy creating budget spreadsheets, but to no avail.

I created my budget for the month, went on spending as normal, then added all of the numbers together from my online banking statement at the end of the month and plugged them into my spreadsheet. That was not only time-consuming, but because I couldn’t see my spending in real time it didn’t help me spend any less.

Then I tried keeping track of my spending by taking the numbers every few days and adding them into my spreadsheet. That was just plain confusing, since I couldn’t remember which transactions I’d already added and which I hadn’t.

Then I discovered the wonderful world of budgeting apps.

Apps that budget for me

I have three budgeting apps that I use every day to track my spending. Personal Capital, Clarity Money, and Mint. The best thing about these apps is that they are ridiculously easy to use, and make budgeting a breeze. They are all free to download, which is a great perk. All of my online banking accounts are connected to these apps: checking accounts, savings accounts, credit cards, and investment accounts. I can sign in to any of these apps during the day and track my overall spending or my spending in a certain category.

Clarity Money keeps track of my credit score, which is extremely helpful to know. It also keeps track of any recurring payments it finds in my account and makes me aware of them, in case I’ve forgotten and want to cancel old accounts. Additionally, it tells me when it finds credit cards that would be better suited to my needs than the one I’m using.

Personal Capital is helpful because it tracks my net worth. I have my mortgage and student loan accounts, plus my home’s worth according to Zillow attached, so it really does show me the whole picture of my financial well-being. Not to mention the fact that I enjoy watching my net worth slowly increase each month as my debts get paid down, I beef up my savings, and the value of my house rises. It’s also quite easy to compare my spending this month on this date to my spending last month on this date, so it really helps to keep me in check and figure out where I can cut corners.

Mint is unique in all of the resources that it offers to its users. It has a robust collection of articles to browse on various money topics. It shows me credit card or loan offers that better suit me and my situation, and it also tracks my spending in all categories quite easily.

Apps that save for me

The other type of app that I’m obsessed with saves money for me. Yes, you heard me right. These apps connect to my bank account and save money little-by-little for me so that I don’t have to think about doing it myself. I have two that I use daily: Digit and Acorns.

Digit connects to my checking account and analyzes my spending. It somehow knows how much money I will have coming in at any certain point in the month and how much will be going out. Then it skims a few dollars here and there that it knows I won’t really miss and deposits it into a separate savings account for me. I can also set up recurring payments or make extra payments at any time.

One of my favorite ways to use Digit is to deposit money into my Digit account whenever I’ve saved anything. For example, whenever I go to a grocery store the receipt always tells me how much I saved by using coupons or by getting the club member discount. Before throwing the receipt away I always deposit that amount into my Digit account. So if my receipt tells me I saved $7.38 during my shopping trip, I add $7.38 to my Digit account. Or if I really practice my self control and brew my own coffee at home instead of buying a mocha on my way to work, I deposit $5 into my Digit account. I never really miss the money because I would have spent it anyway.

The other savings app that I absolutely adore is called Acorns. It also connects to my checking account, but rather than skimming a little money here and there, it rounds all of my transactions up to the nearest dollar and invests the difference. Let’s say I had a transaction that cost $10.45. Acorns would round that up to $11 and deposit the 55 cents into my Acorns account. Once I get $5 in that account, it invests it into ETF’s. I can also set up recurring payments to give myself a little boost. I definitely won’t be able to retire off of this account, but in the last 13 months I’ve invested $997.78, which definitely isn’t bad.

What’s the point?

The point I’m trying to make here is that budgeting (or saving) doesn’t have to be as hard as some people make it out to be. Sure you can tediously pore over your monthly transactions and add them into a spreadsheet. Or you can do it the lazy way and have your phone track it all for you in real time. The choice is up to you. But if it were my choice, I’d rather use that extra time to watch some Forensic Files or catch up on my sleep.

budgeting

Let’s Talk About the B Word: 4 Common Budgeting Methods

Let’s take a minute to talk about the “B word.” A word that makes grown women and men alike cringe. A word with an undoubtedly negative connotation. A word most people never want hurled at them. I’m, of course, talking about the word “budget”. I suspect most people would prefer the other B word, to be honest.

I’m not so sure why budgets get such a bad rap. I suppose most people think of budgets as restricting and a surefire way to sit at home on a Friday night with nothing to do. But in all actuality, budgets are a vessel designed to carry you where you want to be and allow you to do more of what you want to do.

Essentially, a budget is just you telling your money where to go. Many people earn their monthly paychecks, spend their money, then wonder where the heck all of their money went. But simply by paying attention to where your money goes and directing it to the right places, you can give yourself freedom that you probably never imagined was possible.

The most important piece of budgeting is obviously sticking to it month after month. But the only way to do that is to find the budget that works best for you. Below are the four most common budgeting methods.

The Zero Sum Budget

With the zero sum budgeting system you take the total amount of money that you will earn during a month and simply subtract your expenses until you end up at zero. The easiest way to do this is to start by subtracting all of your fixed monthly expenses. By fixed expenses, I mean monthly bills that cost the same each month. Your rent or mortgage, car payment, car insurance, phone bill, and minimum payments on credit cards are all fixed expenses. Then you subtract all of your variable expenses (expenses that change every month) until you get to zero, which leaves no wiggle room for those “Where did all my money go?” moments.

Cash Envelope Budget

With the cash envelope budget, you hide your credit and debit cards away and pay for everything in cash. Obviously you can pay your fixed expenses with your debit card or by automatic withdrawal, but you will only spend cash for your variable expenses. Create separate envelopes for each of those variable expenses (groceries, eating out, entertainment, clothing, etc.). Figure out your budget for each of the categories, then put that amount in your envelope (in cash, of course). If you mess up and go over in one category, you’ll have to take that money out of another envelope, thus forcing you to spend less in whichever category you’ve taken it from. If there’s any cash left in your envelopes at the end of the month, that means you’ll have a little extra for the next month to really treat yourself, or to give your savings account a little boost.

50-30-20 Budgeting

The 50-30-20 budgeting system suggests that 50% of your income should be spent on needs, 30% on wants, and 20% on savings or repaying debt. This isn’t necessarily a system I agree with, as I think 30% on wants is too high, but it could be a great jumping point if you aren’t ready to totally scale back or you don’t have very much debt to repay.

The Snowball Method

The snowball debt repayment method, which was made popular by personal finance expert Dave Ramsey, means paying the minimum on all of your debts, then throwing anything extra into the debt with the lowest balance. Once you pay that off, that minimum payment plus anything extra goes towards the next lowest debt, and so on and so forth. It’s a highly effective method and is an excellent way to gain momentum and confidence as you see the balances on your debts decrease each month.

You can take the same theory and use it for budgeting. Create your monthly budget with all of your fixed expenses, do your best at minimizing your variable expenses, then take everything that’s left over or any extra earnings and put it towards savings or debt repayment. Pretty simple.

Tips to Get Started

Before even putting a budget into place, I think the easiest way to start is by tracking your current spending habits. It is also imperative that you continue to do the same after you’ve started budgeting. For a long time I kept a spreadsheet which indicated every dollar I earned and every dollar I spent, but that was just too difficult and time consuming. Now I use budgeting apps. Personal Capital, Mint, and Clarity Money are my favorites. I have all of my spending accounts (including my credit card) linked, and at the beginning of every month I go in and check on my spending in each category. Before I began budgeting, I thought I had everything under control until I realized I was spending $300 on going out to eat, $300 on clothes, plus all sorts of other frivolous expenditures every month.

Once you’ve started tracking your spending and have a general idea of what you have coming in each month vs. your output each month, you can start to sift through what your wants and your needs are. Your wants are those things that you don’t need in order to survive. Once you’ve identified your wants, challenge yourself to spend half of what you normally spend, or even less than that if you’re feeling super motivated. If you only glean one piece of advice from this entire article, it should be to treat your savings and your retirement savings (yes, those should be separate) as a fixed monthly expense. This is what is meant every time you hear someone say “pay yourself first.”

Extra expenses, whether unexpected or planned, are a fact of life. Incorporate those into your budget as well. If you know your 6-month car insurance premium is due this month, write that into your budget and tighten the belt in other areas. If you know you’re going to attend a fancy dinner for your best friend’s birthday, by all means include that in your restaurant budget. Just make sure you take that out of your vacation or clothing budget that month.

Budgeting isn’t a way of making you needlessly suffer, as so many people seem to think. Rather, it’s a way for you to learn to prioritize areas of your life so that you have more resources for you to do or own the things you love most. If you resolve to give it a shot and stick with it for even just a few months, I can guarantee you won’t look back and regret it.

 

 

Managing Money

Mayday Mayday: My Spending Habits Need Saving

Ahh, the first of May. A day to celebrate the impending arrival of spring. A day filled with top ramen haired memes of Justin Timberlake. A day of chaos and anarchy in most large U.S. cites. And for me, a day to reflect on my spending habits during the month of April.

I use an app called Personal Capital to track my spending, and I have a love-hate relationship with it. I love it because it serves a great purpose in showing me how much money I spent in various categories. And I hate it because it shows me how much money I spent in various categories.

I mentioned earlier in the month that I was participating in a Pantry Challenge and was planning on limiting myself to $100 for groceries this month. Drumroll please…. I went $127.51 OVER budget, for a grand total of $227.51. If I break it down, I actually only went about $35 over budget. I spent about $40 in cat food and kitty litter, which I now realize should be in its own separate category. I also spent $53 on liquor and mixers to bring to a party, which I could put into the entertainment category. But regardless of what lame excuse I try to come up with, I still failed at this challenge. I also spent $113 on eating out this month, which I consider to be a high number for me.

Overall, I did have around $400 in unexpected medical and car expenses for the month, which did make my spending higher than anticipated. Even so, I still spent $367 less in April than I did in March! Definitely not something to sneeze at, if I do say so myself.

Based on all of the numbers, I’m going to give myself two challenges for the month of May:

  1. Only spend $75 on restaurants (I’m going out of town for two days, so I’m making that a little higher than I normally would).
  2. $125 grocery budget for the month

If you have any savings challenges for the month of May, I’d love to hear about them, so let me know! Happy saving!

Earn Money

The Art of the Side Hustle: Make Extra Money in Your Spare Time

I’m a natural-born hustler. I pretty much came out of the womb scheming ways to make extra money, and not a whole lot has changed in the last 29 years. I have a regular full-time job working in the senior living industry, and I make decent money with that. I also work at a coffee stand a few days a month on the weekends (I only fill in when someone needs a day off), and I just recently started working as an usher at Cirque du Soleil while they’re in town for 7 weeks. On top of all that, I had an appointment this morning to sign paperwork for another part-time job that I’ll be working during the month of June. I’ll be staying up all night on my weekends, feeding and hydrating high school seniors during their all-night graduation parties.

My friends and family all think I’m crazy, but the truth is that I really do think of side hustling as my hobby, and I really do enjoy it! More than the enjoyment of experiencing new things and meeting new people though, I enjoy the extra money and the freedom that gives me. I enjoy traveling, and all of this extra money usually goes right into my vacation checking account. I have never paid anything other than cash for a vacation, and that’s something to be proud of. Plus, sunbathing by the pool with a mai tai in hand is much more relaxing without the dark cloud of debt looming overhead.

I realize that working three jobs isn’t plausible or enjoyable for most people, but there’s still plenty of side hustles you can do in your spare time to create a little more cash flow.

Run away and join the circus

OK, I know that sounds ridiculous, but hear me out. I mentioned that I’m working as an usher at Cirque du Soleil for 7 weeks while they’re in town. It honestly sucks working from 7pm-11pm three night a week when I have to get up at 6:30 in the morning and work until 6 at night, but it’s only for 7 weeks! Plus, I LOVE Cirque du Soleil! I fell in love with Cirque du Soleil several years ago after watching a show in Vegas. I make it a point to see another show every time I go back. I’m so excited to be able to watch it day after day…and get paid to watch it! If the circus isn’t your thing, find another type of show or event that you love, and figure out a way to get a job working there. Love baseball? Get a job selling beer and hot dogs at the stadium. Love the ballet? Work as an usher at your local ballet venue. If you’re looking for something even shorter-term than that, major cities constantly have trade shows, seminars, and other one or two day events. Find one relating to a topic you enjoy, and get a job working the registration table.

Find a part time job in the evenings or on the weekends

If you’re looking for consistent and stable extra income, you can deliver pizzas after work or mix a few drinks on the weekends. You could drive for Uber or Lyft in your spare time. I used to know a woman that worked at Starbucks every weekday morning from 4am to 8am, then went to her office job. The opportunities are endless

If you’re worried about getting burnt out, try to find something seasonal or per diem. The coffee stand gig I work is per diem, and it works great because I have the flexibility of saying either yes or no when they call. As for seasonal jobs, they’re everywhere if you actually look for them. There are more than enough retail jobs available from Thanksgiving thru Christmas, most will work around your regular work schedule. Work at a costume store during the month of October. Sell elephant ears at the county fair or pick berries at a farm during the Summer. Every season has its own unique seasonal jobs to choose from.

Participate in market research

Many companies want to know why people do what they do or think what they think so that they can figure out how to get you to buy their product or use their service. Some companies have their own employees that conduct this research, and many hire independent market research firms to gain this information for them. Either way, participants can earn a nice chunk of change just for sharing their opinions.

I’ve participated in more market research studies than I can remember. I’ve tested apps, played video games, and given feedback on website designs. I’ve taste-tested lunch meats, almond milk, and cereal. I’ve rated songs from 0-100, listened to morning radio show segments, and talked about my favorite books. I’ve also listened to actual court cases, planned vacations, and did some virtual reality driving. Most studies range from 1-2 hours and pay $50-$200 for that time. Many are offered in the evenings so you don’t have to miss any work, and some will actually feed you dinner or lunch.

Don’t forget about the flip side of market research

What I mean by this is there are plenty of opportunities to be the person administering the market research, so to speak. For example, my mom and brother go to a local movie theater every Friday night and ask movie-goers if they have heard of or plan on seeing any upcoming movies. They get paid $3 for every survey they fill out, plus $10 bonuses for every 10, and they average 40-45 surveys for the night. Product demonstrators could also be classified as market research (although technically it’s advertising). You can work for companies that send you to different stores to give out samples of all types of products, or you can work for a particular store. Costco, Whole Foods, and many pet stores have their own in-house demonstrators. Many wine and beer distributors also employ demonstrators to conduct tastings in different stores.

Do some housesitting or pet sitting

Pet sitting was my go-to side hustle in middle school and high school. I had a neighbor with three cats that worked long hours, and I would stop by every day on my way home from the bus stop to feed the cats and play with them. I think I made something like $20 a week, but that was a lot of money to a 12 year old! When I was older I got into housesitting. I was more excited about getting to live alone for a week or two, since I lived with my parents until I was 24, but I also made $100 a week. Plus, one couple in particular would buy me a huge bottle of Grey Goose and tell me I wasn’t allowed to come back if it wasn’t gone by the time they got home, and I thought that was a nice perk.

Housesitting doesn’t make sense for me anymore, since I live alone and have two cats that need me. But my brother’s girlfriend, who doesn’t have any pets of her own, housesits constantly and charges $40 per day. Not a bad deal for something that could essentially be considered a stay-cation.

Babysitting

I’ll be honest, this was never my favorite job. I’m not someone that’s ever spent much time around kids, so they kind of make me uncomfortable. But if that’s not the case for you, then more power to you. You can go the traditional route and let friends and neighbors know, but they’re more likely to employee a teenager they know. However, there are plenty of websites out there that connect you with parents eager for a night out that want the comfort and security of knowing they’re hiring someone with credentials that have passed an extensive background check.

Side hustling opportunities are endless. For me, the key is finding something that will work around my schedule that I don’t have to commit to for longer than a few weeks (this prevents me from getting too burnt out). I’ve found several side hustles just from word of mouth, talking to friends , coworkers, and even my hair stylist. The majority I find on Craigslist, though. I know there are a lot of people out there that think Craigslist is full of scams and people trying to lure you to their homes so they can chop you up and keep you in their freezer, but I’ve never had any problems (knock on wood). I check the “etc. jobs” and the “gigs” sections every day, and they are absolute gold mines for me. I will offer this Craigslist disclaimer to you, though: If anything just doesn’t sound right or makes you feel even remotely uncomfortable, please listen to your intuition and don’t do it! With that said, happy hustling!

Managing Money · money challenge

April Money Challenge: Pantry Challenge

I’ve got a bad habit. Well, to be real I have several. But for the purpose of this story, we’ll just go with the one. I have a bad habit of going grocery shopping, buying stuff on sale that I would likely only eat during a national crisis when grocery shopping isn’t an option, then hoarding it all in my pantry and freezer. My freezer is filled with tilapia and frozen vegetables that probably haven’t seen the light of day in at least 4 years. And who even knows what strange nonperishables I have stacked up in my pantry. Probably the worst thing about this strange, awful habit of mine is that I will open the doors to the freezer, spin the lazy susan in the cupboards around, then decide I have no food in my house and go buy more groceries.

I’m always looking for ways to cut corners when it comes to my monthly budget. So when I looked through my spending for last month and saw that I spent a whopping $358.36 on groceries (keep in mind, I’m ONE PERSON), I decided to challenge myself to spend less this month.

I recently listened to a podcast that had to do with money challenges, and one person shared their experience with a pantry challenge. First of all, what a breath of fresh air to find out I’m not the only food hoarder out there. Second, I realized a pantry challenge was just what I needed this month.

The woman on the podcast had a goal to not spend anything on groceries, but that just didn’t sound feasible to me. I recently joined Weight Watchers, so produce is pretty essential to me right now. Plus, I don’t think my two cats would appreciate eating nothing but stale spaghetti noodles and 8 cans of garbanzo beans for the next month. I modified the rules to fit my lifestyle, and I decided that I can only spend $100 on groceries this month. Plus, I’m challenging myself to create recipes that are still reflective of my Weight Watchers goals.

We’re now a third of the way through the month of April, and I’ve only spent a third of my budget ($29.58 to be exact)! I’m not the greatest cook, but just yesterday I meal prepped for the week and made cilantro lime chicken with cilantro lime rice and beans (I only spent $1.50 for the cilantro and lime!) and Thai peanut butter chicken with rice, and I have to admit that I gave myself a nice pat on the back after. The Mexican stuffed shells I made last week weren’t the greatest, but at least they were edible. Oh, and just in case you were curious, I’m still holding up the Weight Watchers end of the bargain and lost 2 pounds in the last 2 weeks!

Managing Money

4 Common Money Mistakes Made By Women

Let’s face it, we all make mistakes. Overly plucked eyebrows. Cringe-worthy haircuts from years past. Blurry, tequila-fueled hook ups with men that haven’t quite figured out they’re gay yet. There’s always something we, as women, can look back on with regret. Thankfully, the pain of these awkward memories usually fade, just as sperm-shaped eyebrows always grow back. But sometimes women make terrible mistakes that stick around for decades (just like that shamrock-shaped tattoo you got in a tent outside of a bar on St. Patrick’s Day — yes, that really did happen). Money mistakes can take many shapes (fortunately, most aren’t in the shape of a lucky plant). Here are 4 of the most common mistakes I see women make with their money.

Trying to keep up with Ms. Jones

Your favorite celeb posts an Instagram picture wearing her new waist trainer, so now you have to have one too. You can’t make your car payment this month, but you definitely can’t miss your bestie’s bachelorette weekend in Vegas either. You can’t be caught dead in a car that doesn’t have heated seats and built-in GPS. Whether or not we like to admit it, women care about how other people perceive them. We want to be the prettiest, the smartest, the most talented, or the wealthiest, just so we can impress other people that probably don’t even care about those things to begin with. Unfortunately, this usually comes with a price tag (both literally and figuratively). We buy things to make us appear more like the person we want to be. It’s fine to buy things that make us feel good about ourselves, take ourselves on a relaxing vacation, or even reward ourselves for a job well done. It’s not OK, though, to buy ridiculously expensive designer sunglasses then not have enough left over to pay the rent or buy your baby’s formula. It’s all about balance. Make sure you pay for the essentials first (including putting something into savings), then by all means spring for those hot new shoes if you have extra cash leftover.

Assuming he’ll take care of you forever

“My husband has a retirement account, plus a pension from the military, so I don’t need to save for retirement.” But what happens if you get divorced? “That will NEVER happen.” What if he dies young? “He’s perfectly healthy.”

This was a conversation that I had several times with a friend, and it absolutely kills me to think about all of the what ifs. No one ever plans to get divorced or expects their seemingly healthy husband to pass before you’re both old and gray, but guess what? It happens! It happens ALL THE FREAKING TIME! My dad was 71 when he passed away, which is still relatively young. My 63 year old mom suddenly found herself solely responsible for the mortgage and day-to-day expenses, despite my dad’s pension and social security income being slashed in half upon his death. Thankfully, my parents were always very smart with their money. Plus they had ample time to get the finances in order prior to his death. Unfortunately, I’ve seen too many widows lose their homes, have to live with their children, or just simply not even know how much money they have or where to access it.

Long story short, never rely solely on your significant other to manage your finances and your financial future.

Rushing into things

Along those same lines, I’ve seen women totally screwed when they moved too fast in a relationship. One friend purchased a home with her fiancé, only to divorce him less than a year after marrying him. She kicked him out, he didn’t have a job, so he quit paying his portion of the mortgage. I don’t know the specifics on how much of a struggle it was for her, but I know she moved in a few roommates and a new boyfriend soon after, which I assume helped her make the payments.

Similarly, I have a cousin that signed an apartment lease with a guy she’d only been dating a few weeks. Sure enough, her crazy started showing through and he bailed. She tried to sue him for his portion of the rent that he’d promised to pay when they signed the lease. That failed miserably when she saw him across the courtroom and fell for him all over again. Oddly enough, he bailed once again, just as soon as she dropped the lawsuit. Go figure.

Not asking for more money

It’s no secret that men make more money than women. Just last week people were posting all over Instagram in support of Equal Pay Day, which highlights the wage gap between men and women in the United States. Part of this is a broken system. But part of it is that most women are afraid to negotiate their pay. I have hired a few employees in my day, all of them women, and not a single one has ever tried negotiating with me for higher pay. I’ve also spoken to several friends who tell me they’ve never tried negotiating their pay either upon hire or after a performance review, out of fear of rejection or fear of coming across as greedy. I don’t know how greedy I’ve come across, but in all of my negotiations, I’ve never had anyone flat out refuse. Maybe they didn’t give me as much as I’ve asked for, but they’ve always increased the offered amount. In my opinion, it’s better to ask and be turned down than to risk not asking and losing out. If you don’t ask, you won’t receive.